Trafficking In Counterfeit Goods Or Services 18 USC Section 2320

Trafficking In Counterfeit Goods Or Services 18 USC Section 2320

Counterfeit goods are everywhere these days. You can find fake designer handbags, watches, shoes – you name it. Heck, even fake olive oil and prescription drugs. As consumers, we’re often drawn to knock-offs because of the low prices. But buying counterfeit goods can have serious consequences that you may not realize.

Let’s break down the law against trafficking in counterfeit goods and why it exists.

What is Counterfeiting?

Counterfeiting means making a product that infringes on a registered trademark with the intent to deceive buyers. So those fake Oakley sunglasses, Louis Vuitton purses, or Beats headphones are considered counterfeit goods.

The counterfeiter uses the registered trademark without authorization from the owner. And they try to make the product look as similar as possible to the real deal. The goal is to trick consumers into thinking they’re buying a genuine product.

Counterfeiting also applies to pirated music, movies, software, and other copyrighted works.

Trafficking in Counterfeit Goods is Illegal

Trafficking in counterfeit goods is illegal under 18 U.S. Code § 2320. This law prohibits intentionally trafficking or attempting to traffic in goods or services while knowingly using a counterfeit mark.

A counterfeit mark includes any unauthorized use of a registered trademark that is identical to or substantially indistinguishable from the real trademark.

The penalties for trafficking in counterfeit goods are no joke:

• For individuals, up to $2 million in fines and up to 10 years in prison.
• For organizations, up to $5 million in fines.

The penalties increase substantially for second and subsequent offenses.

Why are Harsh Penalties Needed?

You may be wondering – why such harsh penalties for trafficking in knock-off purses and watches? Here’s the deal:

Counterfeiting causes major harm to businesses, consumers, and the economy:

• Lost profits for businesses – Counterfeits undermine legitimate businesses who own the trademarks. This costs companies billions in lost revenue each year.
• Health and safety risks – Counterfeits are often made with inferior materials and standards. Fake prescription drugs can lack active ingredients. Knock-off toys or electronics can be safety hazards.
• Funding criminal activity – The profits from counterfeits may support child labor, gangs, or terrorist organizations.
• Loss of tax revenue – No taxes are paid on illegal counterfeit sales, resulting in lost government revenue.

So counterfeiting has real victims beyond just the company whose trademark was infringed. And the penalties aim to deter this harmful activity.

What Constitutes Trafficking?

Merely buying a counterfeit watch or purse for yourself generally won’t get you prosecuted under Section 2320. Trafficking means dealing in counterfeits as part of commercial activity.

Here are some examples of trafficking that could lead to prosecution:

• Importing large quantities of counterfeit goods to sell.
• Selling counterfeit products in a retail store, online marketplace, or website.
• Distributing or transporting counterfeit items for commercial gain.
• Laundering money earned from counterfeit sales.
• Assisting with manufacturing, storage, or distribution of counterfeits.

Simply possessing a counterfeit product is not enough. The government must prove intent to traffic or commercial scale.

Defenses Against Trafficking Charges

Those charged with trafficking in counterfeits may raise several defenses:

• Lack of knowledge – The defendant can claim they were unaware the goods were counterfeit. But this defense rarely succeeds if the counterfeiting was obvious.
• No willful intent – The defendant argues they did not act willfully or intentionally based on a good faith misunderstanding.
• Authorized use – Asserting the trademark owner authorized the defendant’s use of the mark.
• Fair use – Arguing the alleged infringement constitutes fair use under copyright law.
• First sale doctrine – Contending the resale of a lawfully purchased genuine product is legal under the first sale doctrine.

But these defenses are limited. The best defense is having solid evidence you did not knowingly traffic in counterfeit goods.

How to Avoid Trafficking Charges

The best way to steer clear of counterfeit trafficking charges is to avoid dealing in knock-off goods altogether. Here are some tips:

• Only buy luxury goods from authorized retailers, not random websites or flea markets. If the price seems too good to be true, it probably is.
• Inspect goods carefully for signs of low quality. Misspellings, flimsy materials, or sloppy craftsmanship are red flags.
• Research sellers thoroughly before purchasing large quantities for resale.
• Never take possession of goods you suspect could be counterfeit.
• Consult an attorney before reselling used products if authenticity is questionable.
• Ask rightsholders, like manufacturers, for permission before using trademarks.

Exercising caution helps avoid accidentally trafficking in counterfeits. But for those dealing in knock-offs intentionally, steep penalties await. So think twice before peddling fake goods!