Counterfeiting Law in the United States
Counterfeiting has been a developing topic in the last few years for many reasons. While it use to be that finding counterfeit products meant going through black markets and unsavory characters to reach such tainted goods, today, one need only look to the internet. Whether through eBay, Amazon, or any other website, counterfeit products are now readily available in otherwise legitimate channels of commerce. Typically, the websites themselves are not aware of the nature of the goods being sold through their virtual venue. Often, sellers of counterfeited products use these quasi-anonymous channels to sell their merchandise throughout the world.
According to the International Anti-Counterfeiting Coalition (IACC), the economic impact of counterfeiting has skyrocketed in recent years. According to the IACC the International Chamber of Commerce estimates that seven percent of the world trade is in counterfeit goods and that the counterfeit market is worth $ 350 billion. The IACC cites an example from the Business Software Alliance, which estimates the cost of software piracy alone at about $12 billion a year. These statistics and cited sources from the IACC can be found at the IACC website.
American law, such as the Trademark Counterfeiting Act of 1984, the Lanham Act, enacted in 1946 and now codified at 15. U.S.C. §§ 1051 – 1141, the 2008 Pro-IP Act, and various state anti-counterfeiting penal statutes, including California’s Criminal Penal Code § 350, provide civil remedies and criminal penalties to deter and punish counterfeiters.
Under American law, a counterfeit trademark is defined as a spurious mark or designation that is identical with, or substantially indistinguishable from, a trademark that is registered in the U.S. Patent and Trademark Office, and is used on goods without the consent of the trademark owner. This means that, generally, the criminal provisions and civil remedies are limited to counterfeits of registered marks that are actually being used, although unfair competition laws provide some limited relief to owners of unregistered trademarks. A counterfeit certification mark is considered a counterfeit trademark, and thus the same law also applies to these. As in willful trademark infringement cases, where the statutory damages include treble damages, and possible punitive damages, similar damages are available for counterfeiting, including criminal liability and destruction of the counterfeited products. Criminal liability requires that the seller had actual knowledge, or constructive knowledge. Knowledge, in turn, is attributed to the defendant that wither had actual knowledge of the counterfeiting, or reasonably should have known, under the circumstances, that the items being sold where counterfeited goods or that the product or its labeling or packaging contained a counterfeit trademark or certification mark.
Today, counterfeiting is not limited to Louis Vuitton bags and Rolex watches. More frequently today, we see everyday products from fabrics to electronics, being manufactured in cheap overseas locations, and brought into the country either directly via the internet, or to distributors that resell these items in the United States. Similarly, however, we are also beginning to see a rise in suits for counterfeiting, as owners of trademarks and certification marks are beginning to implement updated procedures to identify and go after counterfeiters.
Saul Acherman
Attorney at
JAFARI LAW GROUP®, INC.