Fake rolexes? Gucci sunglasses? Fendi purses? Pirated DVDS? The manufacturers of these high-end items lose millions of dollars in sales, and aggressively pursue counterfeiting by hiring undercover investigators nationally. The investigators in turn chronicle what they observe in a gray-market storefronts and turn over the product of their investigations to local police agencies. An example of someone who may be investigated is an individual selling Gucci sunglasses for $20 in Downtown L.A., or Venice Beach. If the glasses were not produced by Gucci, they are considered counterfeit, even if their quality is the same or better. Even if the seller is honest with the potential buyers that the item is a fake, California law states that it is criminal to sell an item with a counterfeit label such as Gucci or Fendi on an article, without the manufacturer's consent. This is known as a trademark violation, and the criminal consequences for such conduct include large fines, jail, and prison.The Law Blog's attention has recently been turned to criminal counterfeiting cases, which are appearing more often in Southern California Courts. Manufacturers and distributors of counterfeit items are being arrested more frequently. Los Angeles criminal lawyers are now facing the prospect of defending criminal charges brought pursuant to Penal Code Section 350. The biggest criminal defense challenge in these cases is to keep clients out of custody. The clients usually have clean prior records and often do not realize, before being arrested, that their entrepreneurial activity was illegal. Mistake of law is not a defense in California courts. Penal Code Section 350 states in part:"(a) Any person who willfully manufactures, intentionally sells, or knowingly possesses for sale any counterfeit of a mark registered with the Secretary of State or registered on the Principal Register of the United States Patent and Trademark Office, shall, upon conviction, be punishable as follows:(1) When the offense involves less than 1,000 of the articles described in this subdivision, with a total retail or fair market value less than that required for grand theft as defined in Section 487, and if the person is an individual, he or she shall be punished by a fine of not more than five thousand dollars ($5,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment; or, if the person is a corporation, by a fine of not more than one hundred thousand dollars ($100,000).(2) When the offense involves 1,000 or more of the articles described in this subdivision, or has a total retail or fair market value equal to or greater than that required for grand theft as defined in Section 487, and if the person is an individual, he or she shall be punished by imprisonment in a county jail not to exceed one year, or in the state prison for 16 months, or two or three years, or by a fine not to exceed two hundred fifty thousand dollars ($250,000), or by both that imprisonment and fine; or, if the person is a corporation, by a fine not to exceed five hundred thousand dollars ($500,000).(b) Any person who has been convicted of a violation of either paragraph (1) or (2) of subdivision (a) shall, upon a subsequent conviction of paragraph (1) of subdivision (a), if the person is an individual, be punished by a fine of not more than fifty thousand dollars ($50,000), or by imprisonment in a county jail for not more than one year, or in the state prison for 16 months, or two or three years, or by both that fine and imprisonment; or, if the person is a corporation, by a fine of not more than two hundred thousand dollars ($200,000).(c) Any person who has been convicted of a violation of subdivision (a) and who, by virtue of the conduct that was the basis of the conviction, has directly and foreseeably caused death or great bodily injury to another through reliance on the counterfeited item for its intended purpose shall, if the person is an individual, be punished by a fine of not more than fifty thousand dollars ($50,000), or by imprisonment in the state prison for two, three, or four years, or by both that fine and imprisonment; or, if the person is a corporation, by a fine of not more than two hundred thousand dollars ($200,000).In a recent LAPD sting in the Los Angeles Downtown shopping district, known as the Santee Alley, 26 people were arrested and $8 million of counterfeit goods were confiscated. It was reported in the press that more than 140 law enforcement officers descended on Santee Alley Police and seized more than 50,000 items, including pirated CDs and DVDs as well as near-perfect reproductions of designer merchandise. The street value of the goods seized by officials with the Los Angeles Anti-Piracy Task Force was estimated at more than $8 million. "It sends a strong message going into the holiday shopping season that this kind of activity is not going to be tolerated," said LAPD Capt. Jodi Wakefield. "If they are going to be doing it, we are going to be arresting them." But some shoppers in the alley said they felt sympathy for merchants. "It's a Catch-22," said Ron Brown, 39. "It's trademarked merchandise. It kind of hurts the manufacturer. [But] especially this time of year, you kind of feel bad -- people are just trying to make money, survive and feed their families. People are out there trying to make a living. Unfortunately it's illegal." Officers with the Los Angeles Police Department and the Los Angeles County Sheriffs Department cordoned off a blocklong section of 11th Street on either side of Santee Alley. Aided by investigators for design companies, the officers examined merchandise such as watches, purses and perfume. They found copycats that carried designer labels, including Prada, Rolex, Fendi and Gucci, officials said. "I'm a librarian by trade, so I know about copyright laws," said Becky McIntosh, 60, of Idaho, wandering the fashion district after returning from a Southern California cruise. "I can't in good conscience do it -- I know it's taking away the profit of the original designers." But shopper Jackie Williams, 41, a part-time nurse from Corona, toted a few handbags she had just picked up and saw the issue in simpler terms. "If people choose to buy the real Coach, they can go to Nordstrom," she said. "For me," she said of Santee deals, "it's something I like."Despite the debate about whether such investigations help society, counterfeiting will continue especially with the inflow of counterfeit goods from China. As a result, Los Angleles criminal lawyers will stay busy defending Penal Code Section 350 violations in court. Tagged as: federal law and defense

Comments:

avi converter on June 16, 2010 at 10:20 a.m. wrote: I have to say that www.keglawyers.com is really a good website WP on December 31, 2009 at 12:37 a.m. wrote: Again a good post. Thank your also pen-friend M. Hall on June 20, 2009 at 10:39 a.m. wrote: Interesting article. I want to share that last month we attended the Strawberry Festival in Garden Grove, CA. and I was very surprised to see a fair booth selling replica/counterfeit purses. Openly, in front of many passing cops. The line to pay was very long and the purses were not $10, they were averaging $100. I want to also say these were not 'Goach' or 'Luis Button' purses, these carried the same authentic logo, the same print, and came with 'authentic' tags. Customers would ask 'are these real?', 'can other people tell they are not?'. The seller'd explain to the customers these were a knock off and that some people might be able to tell they were not real. I wrote to the organizing commity for this fair because I was under the impression that selling these was illegal. They had no comment, responded saying this matter will be revised. I'm surprised this seller got an OK to place her booth legally at the fair. Go figure! Tulsi Patel on June 4, 2009 at 2:16 a.m. wrote: Upon reading this article, I remember being in downtown NYC on Canal Street where hundreds of bags are sold everyday. As part of a 'crackdown' on counterfeit bags, the NYPD raided Canal Street and arrested a few people. Although selling counterfeit merchandise is wrong, we cannot be so naive as to believe it will completely stop. 20 minutes after the cops left, people came out with big suitcases filled with fake bags and sold them in underground cafes and basements. There must be a compromise where the counterfeit manufacturer pays fees and royalties to the original manufacturer. This seems like a plausible solution and would allow law enforcement to focus on issues regarding safety. ucla student on December 16, 2007 at 3:13 p.m. wrote: Although our current trade mark laws are frequently seen as harsh, I believe that they should be upheld. In regards to the fashion industry, counterfeiting unarguably hurts the original designer. Some will make less of this problem by arguing that these designers and or corporations they belong to make immense amounts of money regardless of counterfeited items. However, the fact of the matter is that these items belong to them---they are the one's who created them. It was the designer/company who spent time designing, creating, and subsequently advertising these items. Furthermore, I think it is also important to take into consideration the tremendous amount of competition found in the fashion industry. These companies cant just sit back and relax and expect to make revenue based on their reputation alone. Instead, they have to be constantly on their toes, working hard in order to keep their status so that consumers will continue to buy their products. Thus, I see the practice of selling knock-offs as very unfair and I believe that the punishment for those who are found to be selling counterfeit items is both fair and just. Amanda Hester on December 14, 2007 at 9:59 p.m. wrote: While I understand that conterfeiting is wrong and is a crime, most imitations are clearly imitations and do not directly copy the design that the expensive designer used. It is quite clear to all when a girl is carrying a fake Luis Vuitton purse compared to a real one, same with Gucci and all the others. These market shops are just trying to meet supply and demand. There is a demand for products that look expensive but are cheap and they are supplying us with the products. I myself own a pair ofsunglasses that have D & G on the side..they were $10. If I had not bought those, I would not have bought real Dolce and Gabanas, so they are not losing any money. Look in the grocery store: you can buy brand name products or you can buy generic..like equaline medicine or Ralph's brand. They use the same designs and have similar names as the original but they are cheaper and taste the same. Shops are not marketing these products as real, if they did no one would believe that they really found Gucci's for $10, so they are not decieving anyone and--as stated earlier--are meeting supply and demand. Elizabeth Lumpkin on December 14, 2007 at 8:47 p.m. wrote: While I agree that trademark violations should have consequences, this is just one example of the common problem of excessive punishments for somewhat menial crimes. This law is not nearly as ridiculous as the variable punishment for whether a drug is in a solid or powder form of a drug. This pattern of excessive punishments, often initiated by politicians' wanting an image of being tough on 'crime' or fulfilling the wishes of major corporate campaign contributors, has contributed to the increase of over-crowded jails and then plea bargaining. Lawyers, agreeing that a crime is not deemed deviant enough for jail time, often resort to plea bargaining. Not being aware of a law is not necessarily a justified reason to avoid jail time in any instance, but the lack of awareness of the law and the excessive punishment will also compound with already negative opinions of our justice system. unknown on December 14, 2007 at 5:39 p.m. wrote: Although our current trade mark laws are frequently seen as harsh, I believe that they should be upheld. In regards to the fashion industry, counterfeiting unarguably hurts the original designer. Some will make less of this problem by arguing that these designers and or corporations they belong to make immense amounts of money regardless of counterfeited items. However, the fact of the matter is that these items belong to them---they are the one's who created them. It was the designer/company who spent time designing, creating, and subsequently advertising these items. Furthermore, I think it is also important to take into consideration the tremendous amount of competition found in the fashion industry. These companies cant just sit back and relax and expect to make revenue based on their reputation alone. Instead, they have to be constantly on their toes, working hard in order to keep their status so that consumers will continue to buy their products. Thus, I see the practice of selling knock-offs as very unfair and I believe that the punishment for those who are found to be selling counterfeit items is both fair and just. Rya Meyers on December 14, 2007 at 1:24 p.m. wrote: I thought it was very interesting that the blog said that these imitation materials are considered counterfeit 'even if their quality is the same or better.' This shows that, when you purchase name-brand items, you really are paying for the name. I admit that in some cases, this involves rich individuals buying expensive things because they can. However, I think that this is primarily a testament to how valuable the intellectual property - the particular design - is. When we pay for these designer items, we are paying for the privilege of owning a piece of the artistic vision of its creator. They are high-priced because they can be - if no one bought them at that price, their value would go down. As unfair as it seems to the people who are trying to make money off counterfeit items, it is more unfair to the artists who created these designs to have other people profit off of them. Jade Machado on December 14, 2007 at 12:38 p.m. wrote: I believe that these counterfeiting laws are necessary to protect people's creative ideas. When vendors sell counterfeit items at lower costs they are in a sense 'stealing' from the original producer. However, I also believe that counterfeit items help to bring costs of expensive luxury items down a little bit. How is it possible for vendors to sell the same product for hundreds of dollars less? The original producer is exploiting the consumer. Counterfeit vendors should therefore have the right to sell similar but not identical products at cheaper costs. They should also be forced to explain to consumers that their counterfeit products are fake. ay 505 on December 13, 2007 at 6:34 p.m. wrote: In dealing with crimes such as the sale of counterfeit goods and the sale of pirated DVDS there are distinctions to be made. For example, in the case of counterfeit goods, many times the buyers of knockoffs are never potential buyers of Rolex watches, Gucci sunglasses, or Fendi purses, so these sales were never potential sales anyway. Sure, there are thrifty consumers who can afford the real product and choose the buy the imitation, but I think it would be safe to say that former greatly outnumber the later. Furthermore, you get what you pay for. When you buy one of these high-end products, you buy the name, the satisfaction that you are getting the real thing, and quality. In the case of pirated DVDS and music the authentic product and the imitation are virtually indistinguishable. Music and movies that are illegally obtained constitute for M. Carmen Lopez on December 12, 2007 at 2:19 a.m. wrote: Most people agree that counterfeiting is wrong, and buying such fake products (or selling them) harms the manufacturers of the original product. Still, I agree with Ron Brown who is quoted while expressing how bad he feels for the sellers who are trying to bring bread to their homes. Yes, unfortunately it is a crime and an illegal way of making money. But at the same time it is not murdering someone or selling drugs. Also, as it has been stated before, some of these sellers do not realize how big of a crime they are committing until they are arrested. Yes, consumers should not buy these products, but at the same time getting a pirated DVD for half the price of the original might be the only way that a low income individual or even a family can enjoy watching a relatively recent film. I believe that as long as these products continue circulating on the streets, the problem will persist. Therefore, I believe that the authorities should track down the products whenever these are entering the American territory or whenever they are being produced (in the case of pirated DVD Kristen Fischer on December 9, 2007 at 12:30 p.m. wrote: I think an important issue not addressed with counterfeiting is the consumers who purchase these items. These imitation purses, sunglasses and watches make these expensive accessories available to everyone not just the wealthy. With so many products flooding the market it blurs the line between classes, which used to be noticeable by these expensive accessories. I think it Mai Hong on December 8, 2007 at 3:27 a.m. wrote: Even though the original designers are already very wealthy, I don't think that you can use a designer's wealth as justification for others making money off of their ideas. It doesn't matter what the money is for because the fact of the matter is that it isn't theirs to sell. I think it can be argued that if they have a similar product with a similar name, they are entitled to any profits they make off of that because people have a right to choose a lesser, but similar brand. However, the reason why people buy these lesser products in the first place is because of its similarity to the original product, so perhaps that money is entitled to the original designer as well. athar Mikhail on December 7, 2007 at 5:51 a.m. wrote: Honestly, I believe that the LAPD and our criminal justice system should be out fighting real crime. We must look at the source of this issue. People sell counterfeit items because other people are willing to buy the items. People buy the items because the real prices are outrageous. Most of the time, people are selling counterfeit items to help raise their family. The owners of big corporations are sitting on millions of dollars. I think its ok for the wealth to be spread. The question here is Steven (Matt) Gibson on December 5, 2007 at 10:56 p.m. wrote: There is a tough conflict at play here that is similar to pirating music online. Is it simply wrong because it is illegal and you don't have the creator's permission, or is more accepted since these people are already making millions and the people who are stealing it are those who either couldn't afford it legally or would probably just not buy it. Of course it is different when you are not only stealing the product or label, but selling it off and profiting from it. Its really hard to feel for these big corporations like Rolex and Prada because only huge prosperous companies that charge far too much for their product are being counter fitted, and the people buying them want the status of the accessory but can't afford it. However, this is blatantly illegal activity that we can't ignore lest we set a dangerous precedent. Something these vendors need to realize is that there are loopholes in the law. There are legitimate store front owners in Venice that sell products that look just like knockoffs, but they have subtle enough differences to avoid prosecution. Ultimately there are other legal and legitimate ways to make money, and the customers of these counterfeit luxury items have no actual need for the products. Therefore, its good to discourage that kind of activity and encourage people to pursue more legitimate options, but it shouldn't be priority number one for the police. The police presence in this article seems a ridiculous waste of taxpayers funds. Gideon Goei on December 4, 2007 at 7:24 p.m. wrote: Counterfeiting has been a problem in the Untied States for a long time. I understand how many are more willing to buy the almost the same product for a cheaper price; however, this is clearly against patent law. I believe such laws are justifiable for such crimes; however, the only problem is that a plethora of people buy counterfeit merchandise. Especially in the Asian community, many people buy counterfeit objects in foreign countries and sell it over here for a cheaper price or as gifts. The only way to be able to get a message to these crime offenders would be to increase the penalty and make people fearful of committing such crimes. Kara Edwardson on December 4, 2007 at 6:43 p.m. wrote: While I can sympathize with the need to crack down on illegal distribution of copywrited material (such as music, and apparel)and I know that it hurts industries from loss of revenue, I am not that sympathetic to their cause. First of all, I think the punishments for piracy are way too high - it's obsurd that someone convicted for piracy could go to jail for years while dangerous criminals still get out of jail early. Also, I believe the fines are excessive as well. I'm not surprised that the government is going out of it's way to protect corporate interests, while ignoring the financial problems of the people who are struggling to survive. I'd personally like to see the government crack down on sweat-shop labor in LosAngeles (and other parts of the U.S.)and then maybe I'll sympathize more with corporate interests. Corporations violate all kinds of laws - labor, environmental, etc. It's hard to feel bad for their revenue loss from copywrited material being sold illegaly, when it's clear that corporations will break laws whenever they can get away with it. I believe corporations have too much power in this country (as well as internationally), it doesn't seem to me that they ever have the public's best interest in mind when they do business unless they are forced too, so personally I hope the people who were selling illegaly get off easy. I doubt they will, unless the general public can see things the way I do. I would suggest to the attorney's who are representing these people to show the jury all the ways in which corporations violate laws. Show them proof of sweat-shop labor connections, show proof that they close factories here to make people in foreign countries work for 3$ a day in 24hr factories. There are lot's of ways to turn this on the corporations, they most likely have skelletons in their closet - and I think the average citizen (unless they're white collar-upper management) would sympathize with the defense - I would. Andy Blair on December 4, 2007 at 3:30 p.m. wrote: I think that it is very important to protect trade mark laws. Despite that the main violators tend to be poor, it is the law. And the way we have a capitalistic economy requires protection of certain items and names. This protects those who want to be competitive in the market, otherwise what is the point of trying to come up with a new idea to sell if it can be stolen. The big problem globally that is really hurting businesses is in Asia and their Grey-market. I think it is great that the LAPD has a task-force dedicated to this crime, but we also need a greater international force to prevent copyright and trademark laws from being broken in the Asian country's. Kamyar Amiri-Davani on December 4, 2007 at 11:54 a.m. wrote: While contemplating feasible proposals for the reform of the American judicial system, I had difficulty creating a plan that would not increase the financial burden of our taxpayers. Therefore, I find the recent events in response to counterfeit merchandise to be a gross expenditure of state funds and resources, though I do see it necessary to protect the original manufacturers. It would be more appropriate to require the manufacturers to privately fund law enforcer's efforts in pursuit of counterfeiters, for they have the most profit at stake, especially during the holidays as the article indicates. On the other hand, it is the responsibility of not only the state, but the federal government to implement legislation, and contribute public funds, that ensures manufacturers' financial security and peace of mind, and thus facilitates commercial growth. Ultimately, if the corporations and manufacturers were required to pay a specific additional tax contributing to state counterfeit opposition, more funds could be relegated to other discontents in the criminal justice, such as providing more financial incentives for district attorneys. Whitney Sloan on December 4, 2007 at 3:06 a.m. wrote: I am typically very pro-law enforcement, but this feels slightly over the top. I understand that counterfeit products can sometimes harm the original brand name's revenue, and I'm certainly against fake items being marketed as the 'real thing'. However, I think it's completely uneccessary to throw some street vendor in jail because he's openly selling 'folex' watches. When products are MARKETED as knock offs, the authentic label probably isn't going to be losing a ton of money. Most of the people who buy knock offs can't afford the originals. Therefore, Gucci most likely isn't going to be making any money off of them...period. So I don't see a huge problem with openly - key word, openly - selling fakes. It seems like everyone wins: shopkeepers take home some extra money for their families, fashion-obsessed college kids with no money can enjoy their folexes and fake designer purses, and the big name brands can continue to make their millions off of the vast amount of Southern Californians who want the real thing. Kate Monson on December 4, 2007 at 1:13 a.m. wrote: I think this strong stance on counterfeit goods is greatly needed. It supports and protects a designer Raul Perez on December 3, 2007 at 8:52 p.m. wrote: I am against counterfeit goods of all kinds. I have never purchased anything counterfeit, and I could never imagine purchasing anything but the original, especially if it is dealing with a musician/movie that I like. I think that counterfeiting is wrong, and that the law should go after anyone that does so. Sure, I understand that most of the people counterfeiting are doing so just to make ends meet, but at the end of the day it is illegal and it should be corrected. Sometimes I do not feel bad when I see items of high fashion getting duplicated because those high fashion items in department stores are ridiculously overpriced (gucci, fendi, etc), but then I remind myself that it is not okay. Kavita Karode on December 3, 2007 at 2:27 p.m. wrote: After reading this piece, I feel that the fashion industry is finally getting some type of justice. While these counterfeit cases are crowding up the courts, what counterfeiters are practicing is wrong. While huge designer labels make millions annually, it isn't right for others to use the status of major brand names to make money dishonestly and I think the punishment for those who are found to be selling inauthentic items is fair and just. With this crackdown hopefully people will be more weary about buying or selling imitation goods and manufactures do not have to worry about private parties benefiting by ripping them off. Dorilee Meyer on December 3, 2007 at 3:08 a.m. wrote: It is easier to protect physical property than intellectual property, but it is no less important to do so. A person or company is entitled to reap all the financial rewards their creativity, artistic expressions, and ideas garnered. Companies take years to build the reputations behind their trademarks. Counterfeit products of dubious quality undermine both the company's reputation and profits. Counterfeiting is also an unfair practice against the consumer of the original product. The product they paid a premium price for is rendered less exclusive. The government also loses revenue. Cracking down on counterfeiting sends a message that fosters imagination and innovation and discourages imitation, mores that are consistent with the ideology of America's economic foundation and cultural development.