Patents and trademarks are exclusively federal matters. Thus, most cases involving piracy of intellectual property or counterfeit goods are investigated and prosecuted by the federal government. One of the most significant parts of the federal counterfeiting statute at 18 U.S.C. § 2320 is the power of the government to seize the assets of counterfeiting businesses. Since the crime is economic, the belief is that this is the strongest deterrent to prevent future recurrence. You can find these provisions under the federal Asset Forfeiture section. 18 U.S.C. § 2318 addresses the instances where counterfeit labels are placed on intellectual property.
Trafficking in counterfeit goods or services
Whoever intentionally traffics or attempts to traffic in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services, or intentionally traffics or attempts to traffic in labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature, knowing that a counterfeit mark has been applied thereto, the use of which is likely to cause confusion, to cause mistake, or to deceive, shall, if an individual, be fined not more than $2,000,000 or imprisoned not more than 10 years, or both, and, if a person other than an individual, be fined not more than $5,000,000. In the case of an offense by a person under this section that occurs after that person is convicted of another offense under this section, the person convicted, if an individual, shall be fined not more than $5,000,000 or imprisoned not more than 20 years, or both, and if other than an individual, shall be fined not more than $15,000,000.
The term “counterfeit mark” means—
(A) a spurious mark—
(i) that is used in connection with trafficking in any goods, services, labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature;
(ii) that is identical with, or substantially indistinguishable from, a mark registered on the principal register in the United States Patent and Trademark Office and in use, whether or not the defendant knew such mark was so registered;
(iii) that is applied to or used in connection with the goods or services for which the mark is registered with the United States Patent and Trademark Office, or is applied to or consists of a label, patch, sticker, wrapper, badge, emblem, medallion, charm, box, container, can, case, hangtag, documentation, or packaging of any type or nature that is designed, marketed, or otherwise intended to be used on or in connection with the goods or services for which the mark is registered in the United States Patent and Trademark Office; and
(iv) the use of which is likely to cause confusion, to cause mistake, or to deceive; or
(B) a spurious designation that is identical with, or substantially indistinguishable from, a designation as to which the remedies of the Lanham Act are made available by reason of section 220506 of title 36; but such term does not include any mark or designation used in connection with goods or services, or a mark or designation applied to labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature used in connection with such goods or services, of which the manufacturer or producer was, at the time of the manufacture or production in question, authorized to use the mark or designation for the type of goods or services so manufactured or produced, by the holder of the right to use such mark or designation.
The term “traffic” means to transport, transfer, or otherwise dispose of, to another, for purposes of commercial advantage or private financial gain, or to make, import, export, obtain control of, or possess, with intent to so transport, transfer, or otherwise dispose of.
In addition to any other sentence imposed, the remainder of the statute sets forth asset forfeiture provisions, rules governing who is considered a victim and the procedure for the federal pre-sentence investigation report, and directives by Congress to study the fines and punishments assessed.
Trafficking in counterfeit labels, illicit labels, or counterfeit documentation or packaging
Whoever, in any of the circumstances described in subsection (c), knowingly traffics in—
(1) a counterfeit label or illicit label affixed to, enclosing, or accompanying, or designed to be affixed to, enclose, or accompany—
(A) a phonorecord;
(B) a copy of a computer program;
(C) a copy of a motion picture or other audiovisual work;
(D) a copy of a literary work;
(E) a copy of a pictorial, graphic, or sculptural work;
(F) a work of visual art; or
(G) documentation or packaging; or
(2) counterfeit documentation or packaging, shall be fined under this title or imprisoned for not more than 5 years, or both.
(c) The circumstances referred to in subsection (a) of this section are—
(1) the offense is committed within the special maritime and territorial jurisdiction of the United States; or within the special aircraft jurisdiction of the United States (as defined in section 46501 of title 49);
(2) the mail or a facility of interstate or foreign commerce is used or intended to be used in the commission of the offense;
(3) the counterfeit label or illicit label is affixed to, encloses, or accompanies, or is designed to be affixed to, enclose, or accompany—
(A) a phonorecord of a copyrighted sound recording or copyrighted musical work;
(B) a copy of a copyrighted computer program;
(C) a copy of a copyrighted motion picture or other audiovisual work;
(D) a copy of a literary work;
(E) a copy of a pictorial, graphic, or sculptural work;
(F) a work of visual art; or
(G) copyrighted documentation or packaging; or
(4) the counterfeited documentation or packaging is copyrighted.
Note 1: In addition to any other sentence imposed, the remainder of the statute sets forth asset forfeiture provisions and civil remedies for actual damages and lost profits.
Note 2: In our humble opinion, 18 U.S.C. § 2318 c(3) is confusing because it is needlessly self-referential. However, the important thing to note is that unless the instruments of interstate commerce were involved in the counterfeiting, federal jurisdiction only attaches to copyrighted works.
Sometimes the goods or services counterfeited are not protected by federal trademarks, but the business has registered with the secretary of state. Also the amount of goods possessed is too small to justify a the resources of a federal investigation and prosecution. For these reasons, Texas has a duplicative statute under Section 32.23 of the Texas Penal Code:
TRADEMARK COUNTERFEITING
A person commits an offense if the person intentionally manufactures, displays, advertises, distributes, offers for sale, sells, or possesses with intent to sell or distribute a counterfeit mark or an item or service that:
(1) bears or is identified by a counterfeit mark; or
(2) the person knows or should have known bears or is identified by a counterfeit mark.
(c) A state or federal certificate of registration of intellectual property is prima facie evidence of the facts stated in the certificate.
"Counterfeit mark" means a mark that is identical to or substantially indistinguishable from a protected mark the use or production of which is not authorized by the owner of the protected mark.
"Protected mark" means a trademark or service mark or an identification mark that is:
(A) registered with the secretary of state;
(B) registered on the principal register of the United States Patent and Trademark Office;
(C) registered under the laws of another state; or
(D) protected by Section 16.30, Business & Commerce Code, or by 36 U.S.C. Section 371 et seq.
The punishment range is according to Standard Value Ladder of the retail value for a counterfeit item."
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