A tort is a legal concept which describes a violation where one individual causes harm, injury, or damage to another individual. This violation may be the result of:
- An intentional act;
- A breach of duty, such as negligence; and
- A violation of statutes.
The party who commits a tort is known as the tortfeasor. Tortfeasors incur tort liability, which means that they will be required to reimburse the victim for the harm which they caused.
If a tortfeasor is found liable or responsible for another individual’s injuries, they will likely be required to pay damages. Pursuant to the majority of tort laws, injuries which are suffered by plaintiffs are not required to be physical.
What are Counterfeit Goods?
A counterfeit good is a good which has been altered in order to make it appear as though it is from an authentic source. Although a counterfeit good is typically associated with a cheap or low-quality item, that is not always accurate.
In some cases, a counterfeit good may be produced from decent materials which make it appear very similar to the original product, although the individual or company selling the product is not legally permitted to do so.
The practice of making counterfeiting goods involves the unauthorized use of:
The labels are attached to generic goods, which are then passed off and sold as if they are an authentic product. Common examples of counterfeit goods include:
Counterfeit goods may also be known as rip-offs, fakes, or knock-offs. Some types of counterfeit goods, such as CDs, DVDs, and video games are often referred to as pirated goods.
The main distinction between counterfeit goods and pirated goods is that counterfeit goods are an attempt to deceive a purchaser, whereas a purchaser of pirated items is typically aware that the item is not from a legitimate source.
What is an Individual’s Liability for Selling Counterfeit Goods?
The sale of counterfeit goods is illegal, and may result in substantial monetary fines. There may, however, be methods available to limit an individual’s liability.
It may be difficult to hold an individual liable for purchasing counterfeit goods, especially if that individual purchased the item without knowing or being able to tell whether it was a fake. It is important to note, however, that every state has its own policies regarding the purchase of counterfeit goods and, therefore, the rules may vary by jurisdiction.
It is, however, against the law to manufacture, sell, and/or distribute counterfeit goods. There are numerous state and federal laws which make it illegal to engage in the trade of counterfeit goods.
The following examples are laws which prohibit the sale of counterfeit goods, including:
- The Stop Counterfeiting in Manufactured Goods Act: This act focuses on the prohibition of the practice of attaching brand name labels or logos to generic items, as well as prohibiting presenting low quality items as brand name products;
- The Trademark Counterfeiting Act of 1984: This law makes it illegal to sell goods which use the trademark of another company without permission from that company; and
- The Anticounterfeiting Consumer Protection Act: This act imposes criminal liability for the trafficking of counterfeit goods and services. In addition, this act targets the counterfeiting of merchandise which is copyrighted, including motion pictures and computer programs.
It is important to note that the industry of counterfeiting is a highly organized and complex effort. It typically involves transporting illegal goods across state and/or international borders. Because of this, individuals who are arrested for selling counterfeit goods are often charged with numerous crimes in connection to the sales, including conspiracy and the smuggling of goods.
What Does a Plaintiff Need to Prove to Win Their Case?
In order for a plaintiff to win their case, they are only required to prove that the defendant infringed upon their intellectual property rights, or copied the plaintiff’s goods. With merchandise, this can be fairly simple to prove, as goods may be simple to duplicate.
What is Intellectual Property Law?
Intellectual property, often referred to as IP, refers to property rights which are vested in the intangible. IP laws protect entities that have no physical form. This may include:
- Names and logos attached to products;
- Inventions; and
- Original works of authorship.
Because no individual can physically possess these items, intellectual property law generally protects an individual’s exclusive rights to use or reproduce the intellectual property. In addition, international property laws may, in some cases, protect secrecy.
Typically, the individual who first invented or created something is considered the owner of the intellectual property. However, employers may contract to own what their employees create while on the job.
In addition, the rights to intellectual property may be temporarily given away by a licensing agreement.
What is the Liability for Counterfeit Goods?
An individual who is caught manufacturing, selling, or distributing counterfeit goods may face serious legal penalties, including:
- A prison sentence between 5 to 20 years; and
- Criminal fines of up to $500,000 or more, depending on the facts of the case.
As previously noted, each state may have its own separate penalties for individuals who violate counterfeiting laws. Despite these variations, the statute of limitations for bringing this type of claim is typically 5 years, but may be extended to up to 8 years if there are terrorism connections. If the counterfeited goods are related to terrorism, a defendant who is convicted may expect to receive a harsher punishment.
Additionally, anti-counterfeiting laws give law enforcement the authority to seize:
- The counterfeit goods;
- Any money from sales of the goods; and
- Any property or equipment which was used in connection with the distribution of the counterfeit items.
This means that law enforcement has the authority to seize any vehicles which were used to transport the counterfeit goods as well as any machinery which was used to make them. Manufacturers and distributors of counterfeit merchandise may also face a civil lawsuit from the company whose design patent or trademark was infringed.
Pursuant to the Lanham Act, a defendant may be liable for the plaintiff’s lost profits and may be required to pay damages.
What if I Get a Cease and Desist Letter?
If an individual receives a cease and desist letter, they have two options:
- To stop the counterfeiting; or
- To prove that they were not copying the accuser.
In most cases, individuals who receive these letters hire attorneys to respond and to assess the possible ways to respond or actions to take.
What if I Formed a Corporation?
If an individual formed a corporation to counterfeit goods, it may reduce some of their liability. The corporation, however, will not protect the individual from loans which were personally guaranteed, back taxes, or any negligent acts.
Do I Need a Lawyer?
It is essential to have the assistance of a criminal defense lawyer to reduce your liability. It is especially important to contact a lawyer if you wish to continue producing a product after you receive a cease and desist letter.
If you are facing criminal charges related to counterfeit goods, it is important to contact your lawyer as soon as possible. Your lawyer can review your case, advise you regarding the laws in your state, and represent you in court.
If you believe that another individual or entity has been manufacturing, selling, or distributing a counterfeit of your product, it is important to contact a lawyer regarding the possibility of a private infringement lawsuit.
