Counterfeit Goods: Legal Remedies and Prevention

Counterfeiting is a major problem for trademark owners. Estimates put the total value of counterfeit goods sold each year somewhere in the range of $1.7 trillion and $4.5 trillion. These are staggering figures, and even when counterfeiting costs an individual business far less, it can still have a major impact on the business’s bottom line.

Along with causing commercial losses, counterfeiting can also devalue companies’ trademarks—and, if left unchecked, it can lead to the loss of companies’ exclusive rights. As a result, businesses not only need to take a proactive approach to preventing counterfeiting, but they must work with a Florida trademark attorney to proactively enforce their exclusive rights as well.

When is a Product Considered “Counterfeit?”

The term counterfeit is defined in Section 45 of the Lanham Act (15 U.S.C. Section 1127). Under Section 45, an item is considered counterfeit if it contains “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.”

Sellers of counterfeit goods seek to pass off their goods as products of the registered trademark owner. A “fake Rolex” is a classic example. Beyond simply creating a likelihood of confusion in the marketplace (which is the standard for establishing a claim for trademark infringement), counterfeiting goes further by seeking to trick consumers into unknowingly purchasing inauthentic items.

A key element of the Lanham Act’s definition of counterfeiting is its reference to “a registered mark.” In order to pursue a claim for counterfeiting, a trademark owner must have registered the mark at issue with the U.S. Patent and Trademark Office (USPTO). While owners of unregistered marks may still be able to enforce their exclusive rights through infringement litigation, the ability to pursue a counterfeiting claim provides access to additional legal remedies—as we discuss below.

Strategies for Preventing the Sale of Counterfeit Goods

While counterfeiting provides registered trademark owners with clear access to legal remedies, it is best to avoid the need to seek these remedies if possible. With this in mind, here are some strategies that companies can use to help prevent the sale of counterfeit goods:

Register Trademarks with the USPTO As Early As Possible

Registering a company’s trademarks as early as possible can both help prevent counterfeiting and ensure that the company will be able to pursue a counterfeiting claim in federal court if necessary. Companies can file for registration with the USPTO on an “intent to use” basis before they start using new trademarks in commerce.  

Record USPTO Registrations with U.S. Customs and Border Protection (CPB)

U.S. Customs and Border Protection (CPB) allows trademark owners to record their USPTO registrations with the agency, and the USPTO describes CPB recording as, “a critical tool in CBP’s efforts to protect intellectual property rights at the border.” CPB examines imported goods to determine if they include recorded marks; and, if they do, CPB can detain them to prevent them from entering the U.S. market.

Take a Proactive Approach to Monitoring and Enforcement

While CPB can help prevent imported counterfeit goods from entering the U.S. market, it is still ultimately up to trademark owners to protect their exclusive rights. With this in mind, a proactive approach to monitoring and enforcement is essential. Trademark owners should work with their counsel to implement monitoring programs and take legal action as necessary.

Work with Internet Service Providers (ISPs) As Warranted

In many cases, trademark owners can work with internet service providers (ISPs) to remove advertisements and listings for counterfeit products. In this context, the term ISP refers to any company that provides an online platform for dissemination of information, including social media companies, search engines, and e-commerce sites. Most major ISPs have policies and procedures for trademark owners to report instances of counterfeiting and infringement, and they will usually take down unauthorized content upon receiving a valid request from a trademark owner.  

Work with Federal Authorities As Warranted

Not only does counterfeiting provide grounds for civil enforcement under the Lanham Act, but it is also a felony under federal law. As a result, in addition to working with CPB, trademark owners can also work with the U.S. Department of Justice (DOJ) to hold counterfeiters accountable in some cases. Other federal agencies, such as the U.S. Food and Drug Administration (FDA), may share an interest in getting counterfeit goods off of the market as well.  

Seek Appropriate Legal Remedies in Federal Court

Seeking appropriate legal remedies in federal court can not only stop counterfeiters from selling their illegal goods, but it can also serve as a deterrent for other would-be counterfeiters. As with other forms of IP enforcement litigation, it is generally in trademark owners’ best interests to take legal action as soon as possible upon discovering counterfeit uses of their marks.

Legal Remedies for Counterfeiting in the U.S.

Trademark owners can seek multiple remedies when they take legal action against counterfeiting in federal court. The remedies that are available in federal trademark counterfeiting cases include:

• Injunctive Relief – Trademark owners can seek immediate injunctive relief prohibiting the further sale of counterfeit goods.
• Actual Damages – Trademark owners who can prove the actual damages resulting from the sale of counterfeit goods can seek to recover these damages in court.
• Statutory Damages – As an alternative to seeking actual damages, trademark owners can opt to seek statutory damages instead. Statutory damages can range from $1,000 to $2 million “per counterfeit mark per type of good[s] . . . sold.”
• Seizure and Destruction of Counterfeit Goods – The Lanham Act’s anti-counterfeiting provisions allow trademark owners to seek seizure and destruction of counterfeit goods in appropriate cases.
• Attorneys’ Fees – The Lanham Act allows trademark owners to seek recovery of their attorneys’ fees in appropriate cases as well.

Schedule an Appointment with a Florida Trademark Attorney Experienced in Counterfeiting Matters

Our attorneys have extensive experience representing trademark owners in counterfeiting matters. If you have questions about how your company can combat counterfeiting, or if you need to take immediate action against counterfeiting in federal court, we can help. Call 305-448-7089 or contact us online to speak with an experienced Florida trademark attorney at Lott & Fischer in confidence.