08 Nov Seller Beware: Selling Counterfeit Goods is Trademark Infringement (and a Crime) **Attorney Advertising **
What do bazaars, the internet, and small shops in every major city have in common? They all sell counterfeit items including merchandise, pharmaceuticals, and other goods. And they are all subject to legal prosecution. Big outlets aren’t immune to this, either. According to The Counterfeit Report: Walmart has association with counterfeit goods; both Walmart, and third-party sellers allowed to sell through Walmart.com, are selling counterfeit products.
The production, distribution, and selling of counterfeit goods is trademark infringement. The trademark owner has the right to sue the counterfeiter and the counterfeit distributor or seller in federal court. It’s also criminal to sell counterfeit goods. This means that a counterfeiter, or counterfeit distributor or seller, could also face federal charges in criminal court. It may seem that everyone’s doing it. However, that doesn’t make it any less unlawful or illegal.
Civil consequences for working with counterfeit goods
A rightful trademark owner can sue somebody who infringes on their trademark. The rightful owner could receive compensation for every single instance of infringement. It’s not unusual for awards to be in the millions of dollars, especially for counterfeit luxury goods.
Criminal consequences for working with counterfeit goods
It’s not only a civil wrong but a crime to create or sell counterfeit goods. The Trademark Counterfeiting Act of 1984 makes it a federal crime to intentionally use somebody’s trademark without their authorization or to counterfeit a trademark. The penalty for violating the act is up to five years in federal prison for an individual and/or a $250,000 fine, and for corporation or business, there is a $1 million fine for each instance. Being found guilty of violating the Trademark Counterfeiting Act doesn’t keep someone from being sued in civil court, either. The rightful trademark owner can also seize any of the counterfeit goods, any of the machines or equipment used to make the counterfeit goods, and any business documents pertaining to the creation and selling of the counterfeit goods.
Big corporations have lots of money, so why should I care?
Counterfeit goods are not only worth less than the real thing because they lack the prestige of the trademark, but they also usually lack the quality. It’s disappointing to buy counterfeit purses and engagement rings, but accidentally buying counterfeit pharmaceuticals, food, fire alarms, electronics, etc. can be dangerous. Some people know that they’re buying counterfeits; part of the allure is getting something that could be expensive but for less, but often the consumer does not even realize they’re being cheated and are buying counterfeits at all.
I think I bought a counterfeit good. What should I do?
If you think you bought a counterfeit, see if you can return it. Also, contact the legal department of the company that owns the trademark. Give them as much information as you have.
I think I may be selling counterfeit goods. What should I do?
If you suspect that you’re selling counterfeit goods, the first thing you should do is stop selling them and stop buying them from your supplier. Next, contact a qualified Intellectual Property (“IP”) attorney. He or she can help you to limit or eliminate your legal liability and work with the trademark owner for a favorable outcome.
If you fall into any of these categories and would like to speak to one of our IP attorneys about your options and/or any consequences you may be facing, simply call 888-666-0062 to schedule a consultation.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.
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