Selling, distributing or wholesaling counterfeit goods is a federal offense. This is because the merchandise is moved across state lines and were most likely bought from a foreign country. Therefore, if you have bought counterfeit goods this way and decide to sell them on the black market, you can be charged with a federal offense.
Definition of Counterfeit Goods
Counterfeit goods are manufactured products that are usually inferior to the original products with the intent to sell them under the brand name. This is done without the owner’s consent to defraud and deceive consumers. Generally, the counterfeit goods are sold under the identical trademark of the original products.
Many popular brands across a broad spectrum of industries have fallen victim to counterfeiting tactics. Most of these products are manufactured in developing countries where they can be produced inexpensively.
Selling Counterfeit Goods is a Federal Offense
It is a federal offense to knowingly sell fake goods and/or services. Federal prosecutors will enforce the laws to the counterfeiter and the individual or company that sells the products.
Laws against counterfeiting are designed to protect the buyer and the maker of the original product. Owning fake products, brands or company logos to sell is cheating the buyer and manufacturer who invested money and time to develop the products.
The Trademark Counterfeiting Act of 1984 applies equal force to any person trafficking in counterfeit goods and any individual or company that knowingly sells the goods. A conviction carries substantial monetary fines and prison time.
Within the law, the term “traffic” is defined broadly to include selling products that bears a counterfeit trademark. The definition also applies to transporting, transferring or disposing of a product for anything of value, including money.
Penalties for Selling Counterfeit Goods
Penalties for knowingly selling, distributing or wholesaling counterfeit goods can lead to the following penalties:
• Up to 10 years imprisonment for the first offense; up to 20 years for repeat offenders. When an offender recklessly or knowingly cause the death of a person because they were unlawfully selling goods or services, they can receive a life sentence.
• Up to a $5 million fine for individuals who are repeat offenders; up to $15 million for corporations.
• Authorities will seize and destroy counterfeit goods that are in the offender’s possession, usually the wholesaler or distributor.
Exposure to Product Liability Claims
Counterfeiters could also face civil lawsuits brought by owners of the trademark products being sold. Under the federal trademark law, owners can recover:
• Damages to the trademark, brand, etc.
• Profit losses from knock-off products being sold instead of the originals
• Attorney’s fees
• Other injunctive relief
Owners have a right to this legal action even when the individual or company selling the merchandise was not aware that it was counterfeit. Legal action is possible if the product is defective and results in someone’s death.
Personal injury, interruption of business operations, property damage and other losses also apply. Most likely, the wholesaler will be the one held liable for the damages. Typically, the manufacturer of the counterfeit product cannot be found to face prosecution. If the manufacturer is in a foreign country, it is unlikely that the manufacturer is not subject to U.S. court jurisdiction.
When wholesalers or distributors knew, or should have reasonably known, that the products they sold were counterfeit, punitive damages claims may also be filed against them. This type of exposure is usually not covered by the wholesaler or distributor’s product liability insurance policy.
Get Expert Advice from a Black Market/Counterfeit Goods Lawyer
Charges of selling counterfeit goods can lead to serious fines and penalties. This is one of those federal crimes where ignorance of the law is no excuse for breaking the law. If found guilty, you will receive the same punishment as someone who fully and knowingly participated in committing the same crime.
Therefore, it is in your best interest to contact a law firm like Raiser & Kenniff, PC to receive expert advice on what these criminal charges can mean for your future. Arrange a consultation with one of our attorneys if you have been charged with trafficking counterfeit goods. We can begin discussing the best defense for your case.
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