Why Trademark Counterfeiting Is A Crime: Basic Concepts

Trademark counterfeiting refers to the act of knowingly selling, using, manufacturing, distributing, advertising and patronizing services and items that bear counterfeit logos or marks. Simply put, if you are sporting a Chanel bag, for instance, which you bought at a rock-bottom price from a traveling “salesman” with the knowledge of its nature as an imitation/counterfeit good, you are guilty of trademark counterfeiting. In fact, in some states, any person who has 25 or more counterfeit goods in possession, he or she will be automatically held guilty of intent to sell or distribute fake items.

Major brands like Disney, Coca-cola, Armani, Chanel, Microsoft, and Nokia are some of the most counterfeited brands worldwide, most of which are manufactured in China, Taiwan, and Korea. China’s own Development Research Center admits this to be a gargantuan problem, with trademark counterfeiting responsible for the existence of a $16bn industry. And while the U.S. Customs Department is very active in tracking the entry of counterfeit goods into the country, it is a sad fact that only a small percentage of these are actually found out and documented.

What Does Trademark Counterfeiting Cover?

Most people know only of trademark counterfeiting affecting clothing brands and software. However, the problem is far wider in scope. It can also affect prescription drugs, videos, music, and other possible item or service that can be imitated for a profit. Person to person and store transactions involving trademark counterfeits are rare in the United States because of the law’s vigilance on the issue. On the Internet, however, this is a different story.

Since the world wide web is the ultimate free trade zone and is highly unregulated, it’s easy for trademark counterfeiters to find willing clients and do business undetected. Patrons can simply wire their payments to sellers and receive their counterfeit goods in just a few days. And because majority of consumers can hardly even tell a fake from the original, trademark counterfeiting poses a huge source of profit for many underground sellers.

Any person or company in violation of state trademark counterfeiting laws will be fined and charged with misdemeanor in the first degree. Trademark counterfeiting is a crime.

Penalties For Trademark Counterfeiters

Punishment for trademark counterfeiting varies from state to state, although, generally, violators are asked to pay a fine that is thrice the value of the counterfeit goods found in their possession.

First time violations are classified as first degree misdemeanors. If it is a second offense and the violator has more than 100 but less than 1000 counterfeit items in possession (or worth over US$2000 but under US$10,000), it is classified as a third degree misdemeanor. Second degree misdemeanors are constituted by over 1000 fake items in possession, or over US$10,000 in value.  Major breaches of the law could result in imprisonment.

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