People covet the stuff of dreams every day. Stuff like designer handbags, watches, shoes, and clothes with high priced name tags on them. Enterprising entrepreneurs worldwide anxiously rush to fulfill those dreams with counterfeit merchandise, almost indistinguishable by the untrained eye from the originals.
While you might think it’s harmless to buy a fake Gucci purse for your favorite girlfriend or wife, or grab that great $150 deal for a fake Rolex watch to impress your friends and co-workers, counterfeit merchandise sold by a large network of criminals competing in the marketplace with the real thing is a federal offense.
Definition of Counterfeit Merchandise
Counterfeit merchandise involves manufacturing goods, usually inferior to the original, and selling them using the brand name without the owner’s permission to defraud and deceive. Generally they are sold under an identical trademark that’s indistinguishable from the true brand owner’s trademark, and without either the approval or oversight of the owner.
Many popular brands in various industries have been, and currently are, victims of merchandise counterfeiting. Counterfeit merchandise involves using a similar yet confusing trademark or service mark associated with similar services or products. Most counterfeit merchandise is manufactured in developing countries that can inexpensively produce them, such as China, Taiwan, and other Asian countries. Counterfeit merchandise is not manufactured as much in developed countries.
The Federal Offense of Counterfeit Merchandise
The selling of counterfeit merchandise goods and/or services is a federal offense, and the laws apply to both the counterfeiter and the company or individual who knowingly sells any counterfeit merchandise, product, or service.
Trademark Counterfeiting Act of 1984
The Trademark Counterfeiting Act of 1984, 18 U.S. Code Section 2320, imposes substantial monetary fines as well as prison time for companies and individuals who violate it.
The generic term describing all forms of illicit trade is “trafficking in illicit goods,” and includes piracy (copyright infringements), counterfeiting (trademark infringements), smuggling of legitimate products, and tax evasion.
Although most people think of fake merchandise when talking about counterfeit merchandise, this also involves selling the real thing on the black market in an effort to avoid paying taxes. These counterfeit merchandise criminals avoid normal regulatory controls and peddle merchandise that is often dangerous without regard for the health or safety of consumers who purchase their illicit goods and services, as well as the damage and risks it poses to society and the global economy.
Penalties for Counterfeit Merchandise
Under federal law, any individual who knowingly distributes, wholesales, or sells counterfeit merchandise faces substantial penalties:
- Imprisonment for the first offense up to 10 years and up to 20 years for repeat offenders. If an offender knowingly or recklessly causes death due to the unlawful sale of goods or merchandise they can face life inprisonment.
- Fines up to $15.0 million for corporations and $5.0 million for individuals who are repeat offenders.
- Seizure and destruction of counterfeit merchandise the wholesaler or distributor has in their possession.
- Civil lawsuits brought by the owner of the trademark under federal trademark law to recovery damages, profit loses, attorneys’ fees, and other injunctive relief.
If you have been charged with trafficking in illicit goods (i.e., counterfeit merchandise), you need the expert advice of a criminal defense attorney knowledgeable with federal crimes such as Sevens Legal, APC. Contact Sevens Legal, APC, today for a free consultation.
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San Diego, CA 92103
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