‘Illicit Association’ in Ecuador: A Legal Tool Against IP Crimes

In July 2025, a criminal court in Loja handed down Ecuador’s first conviction for asociación ilícita – or “illicit association” – in an intellectual property case. The investigation revealed that a coordinated group manufactured sneakers and affixed counterfeit labels of brands such as Nike, Puma and Adidas before selling them through a network of local distributors. Three defendants accepted responsibility through an abbreviated procedure; the court found them guilty of the crime of illicit association under Article 370 of the Comprehensive Organic Criminal Code and imposed 12-month prison terms and financial penalties.

The judgment emphasized that the defendants formed a structured organization with defined roles (manufacturing, labeling and selling) and stressed that applying the illicit association offense was essential for dismantling the network. This precedent underscores the judiciary’s commitment to tackling organized IP.

The first criminal conviction for “illicit association” in the context of intellectual property (IP) in Ecuador has become a significant legal precedent in the fight against trademark counterfeiting. This article examines how the criminal offense of illicit association helps us to understand the role of organized structures in executing complex criminal schemes such as the counterfeiting of products protected by IP rights. The analysis focuses on the legal foundations for configuring this offense and its applicability for dismantling criminal networks dedicated to violating these rights.

Theoretical and Normative Foundations

In criminal law doctrine, illicit association is regarded as an abstract endangerment crime. German jurist Claus Roxin affirms that “the punishability in this type of offense does not depend specifically on the consummation of the crime, but on the prevention of the existence of criminal structures.” In this sense, it protects collective legal interests such as public security and economic order.

In Ecuador, illicit association is codified in Article 370 of the Comprehensive Organic Criminal Code (COIP), which defines it as the act of “two or more persons associating for the purpose of committing crimes punishable by prison sentences of less than five years.” The constitutive elements include: (i) the participation of at least two people, extending its applicability to organized structures; (ii) the existence of a structured—though not necessarily formal—organization, which implies ongoing collaboration among its members; and (iii) a common criminal purpose, i.e., the intent to commit specific crimes such as IP rights violations.

Enforcement Tools and Complementary Offenses

Classifying illicit association as a crime enables authorities to target entire criminal structures rather than isolated events. It is a legal tool that facilitates the dismantling of criminal networks, which would otherwise operate in a fragmented manner, making identification and prosecution difficult.

Separately, Article 208A of the COIP addresses “Harmful Acts Against Intellectual Property,” imposing penalties on those who, for profit and at a commercial scale, perform actions that infringe IP rights. The law outlines prohibited behaviors such as storing, manufacturing, using, offering for sale, importing or exporting products protected by registered distinctive signs. By criminalizing these behaviors, the law aims to safeguard market integrity and the rights of IP holders while preventing the distribution of counterfeit goods and the erosion of consumer trust.

International and Regional Context

The criminal structures behind trademark counterfeiting are a global challenge that transcends borders and often interlinks with other transnational criminal activities. The rapid expansion of international trade has facilitated the growth of these illegal networks, significantly impacting multiple industries and the global economy. Counterfeiting not only harms rights holders but also demands effective mechanisms of international cooperation from states.

In this context, the Center for Anti-Counterfeiting and Product Protection (A-CAPP) at Michigan State University, in its report A Whole New World: Latin America Conference Report, analyses counterfeiting from a global perspective and highlights how the prevalence of counterfeit goods undermines legitimate trade, damages market trust and affects international business competitiveness. Likewise, Homeland Security Investigations (HSI), a division of the U.S. Immigration and Customs Enforcement (ICE), warns in Counterfeit Goods: A Threat to Public Safety that counterfeit trade poses a direct threat to consumer health and safety and may fund transnational criminal organizations.

Structural Criminality and Joint Offences

The connection between IP crimes and illicit association becomes particularly relevant because trademark counterfeiting is rarely an isolated act. Instead, it often results from organized criminal structures. Recognizing these crimes as part of a shared purpose among multiple actors helps expose criminal networks operating across the production, distribution and commercialization chain. In this regard, the classification of both offences under the COIP provides an effective legal framework for disrupting the operational core of illicit IP activities.

Institutional Coordination and Investigative Results

Another crucial aspect of the case is the role of the Office of the Prosecutor, which proved essential in prosecuting both offences. In Ecuador, this responsibility falls under the Specialized Prosecutor’s Office for Transnational and International Organized Crime (FEDOTI), whose involvement was instrumental in securing the conviction. According to the judicial decision, FEDOTI coordinated joint actions with trademark owners and specialized officers from the National Police’s Customs and Development Regime Crimes Unit, enabling the collection of conclusive evidence that demonstrated the existence of a structured criminal network.

Once the structure of the criminal organization was established, financial and technological analysis helped trace money flows and communications among its members. This revealed not only the operation’s magnitude but also its internal hierarchy and distribution of roles. This approach enabled prosecutors to target both the direct offenders and those who orchestrated and financed the illicit activities.

The application of the illicit association offense during the investigation phase proved essential, allowing authorities to file charges against all members of the network responsible for producing and marketing counterfeit products in Ecuador. This reinforces the importance of a coordinated strategy in the fight against IP crimes, ensuring that criminal liability encompasses the full scope of the structure, not just isolated actors.

Judicial Impact and Legal Evolution

The July 4, 2025, ruling by the Loja Criminal Court represents a milestone in Ecuador’s criminal law and, more broadly, in the regional enforcement of intellectual property. Historically, trademark counterfeiting was addressed mainly through administrative or civil avenues, such as fines and product seizures. This case, however, introduces a broader penal approach by recognizing counterfeiting as a form of organized crime. By establishing that these crimes are part of coordinated structures with specific roles, Ecuador takes a significant step forward in treating them as serious economic offenses.

The fight against trademark counterfeiting in Ecuador has long challenged professionals defending IP rights. Yet, institutional and legal efforts have yielded tangible results when effective strategies are implemented. In this case, traditional approaches were broken and criminal law was reaffirmed as a key tool in protecting IP. This precedent not only confirms the feasibility of penal enforcement in such cases but also sends a deterrent message to those involved in counterfeiting networks.

Closing Reflections and Future Action

This case shows that fighting counterfeiting requires more than isolated actions. Coordination among prosecutors, police and trademark holders was essential to identifying, dismantling and prosecuting the involved network. The resulting conviction is more than a legal victory—it is a clear sign that appropriate legal tools allow real progress in protecting intellectual property and defending a fair marketplace.

Beyond the courtroom win, this ruling marks a turning point in how these crimes are addressed in Ecuador. It underscores the need to strengthen institutional capabilities, promote effective legal frameworks and encourage public-private cooperation. The fight against counterfeiting doesn’t end with a ruling—it requires constant vigilance, legislative updates and the implementation of strong public policies. Only through a comprehensive and sustained approach can a secure, fair and IP-respecting commercial environment be guaranteed.

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Author: alexlmx