January 31, 2014

Federal Agents Knock Out Super Bowl Knockoffs

Seller Beware: Consumer Protection Insights for Industry

Whether you are a Broncos fan or a Seahawks fan, you have to root against the trademark and copyright counterfeiters who have had a field day copying Super Bowl merchandise this year. Fortunately, once again, the government has stepped in to stem the tide of these knock-offs.

Officials announced on January 30, 2014 that federal law enforcement agents had seized $21.6 million in counterfeit Super Bowl tickets and merchandise. Most of the goods were seized as they arrived at US ports. The seizures were a culmination of a seven-month investigation by US Immigration and Customs Enforcement in cooperation with various other federal agencies. Law enforcement agents also seized control of 163 websites engaged in the sale of the counterfeit items, shutting down the sales of counterfeit goods on these sites. Now, Internet visitors will be greeted with a notice explaining that the goods on those sites are no longer available. The website seizures occurred as part of "Operation in Our Sites," an ongoing initiative launched in 2010 by the National Intellectual Property Rights Coordination Center to target counterfeiting and piracy on the Internet.

This year's seizure of goods continues an upward trend over the past several years in which various agencies, including US Immigration and Customs Enforcement and US Customs and Border Protection, have been working with the National Football League to curb the sale of counterfeit Super Bowl merchandise. In 2013, $13.6 million in counterfeit merchandise was seized; in 2012 the total was $4.8 million.

Officials have also made 50 arrests in connection with the counterfeit goods seizures. The criminal penalties for counterfeiting may be stiff: Under 18 U.S.C. § 2320, an individual convicted of a first offense of trafficking in counterfeit goods may serve up to ten years in prison, be fined up to $2,000,000, or both.  In addition, counterfeiters may face additional criminal sanctions under the federal Copyright Act, 17 U.S.C. § 506.

In addition to criminal sanctions, the trademark and copyright laws also provide remedies for intellectual property owners whose goods are counterfeited. The federal Trademark Act authorizes seizures of counterfeit goods in civil cases. The monetary recovery may be significant -- up to $2 million per counterfeit mark for each type of product counterfeited if the counterfeiting is willful. The Copyright Act adopts the provision of the Trademark Act that provides for the seizure of counterfeit goods. The Copyright Act also provides copyright owners with a choice between recovering actual damages and profits or statutory damages ranging from $750 to $30,000 per copyrighted work.

So when you buy that prized Super Bowl jersey, thank the federal agents who are ensuring that you purchase the "real thing".

© Arnold & Porter Kaye Scholer LLP 2014 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.


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