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Overview of counterfeitting damages

Posted by Steve Vondran | Oct 15, 2023

Vondran Legal ® Counterfeit Law - Contact us if you are a Plaintiff or Defendant dealing with counterfeiting and trademark issues (877) 276-5084.

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Today's globalized world has made counterfeiting a widespread problem that impacts many different businesses. Almost every market segment is home to counterfeit goods, which pose a risk to consumer health, damage brand reputations, and result in large financial losses. The United States, one of the biggest economies in the world and a center of industry and innovation, is not exempt from this issue. Numerous well-known companies in the nation have suffered from counterfeiting, which has cost them enormous sums of money. We will examine a few of these well-known brands in this post and make an approximation of the amount of money lost to counterfeiting.

Luxury fashion is one of the main businesses in the US that is most negatively impacted by counterfeiting. Due to their reputation for fine craftsmanship and distinctive designs, luxury brands like Chanel, Gucci, and Louis Vuitton are often targeted by counterfeiters. In an attempt to trick gullible customers, counterfeit handbags, wallets, and accessories are a common sight on the market. Not only do these fake goods cause luxury firms to suffer enormous financial losses, but they also infringe upon intellectual property rights. According to estimates, the luxury fashion sector loses billions of dollars a year to counterfeiting operations in the US alone.

Beyond the world of fashion, another industry greatly touched by counterfeits is the consumer electronics sector. Global digital behemoths such as Apple and Samsung are constantly under danger from fake tablets, smartphones, and accessories that are proliferating in both online and offline markets. These fake goods seriously jeopardize consumer safety in addition to robbing respectable businesses of their earnings. Frequently produced using inferior parts and devoid of the strict quality assurance procedures implemented by reputable businesses, these fake gadgets expose consumers to risks like burst batteries or power outages. It is still difficult to estimate the precise amount of money lost by the consumer electronics sector as a result of counterfeiting. On the other hand, estimates put it in the tens of billions of dollars per year in the US alone.

Another important sector of the US economy, the automobile industry, is not exempt from counterfeiting. Well-known automakers including Ford, Chevrolet, and Honda have suffered significant financial losses as a result of the manufacturing and distribution of fake auto components. In addition to hurting the real manufacturers financially, these counterfeit parts endanger customer safety. Airbags, brake pads, and other vital components that are counterfeit jeopardize a car's overall dependability and performance, which increases the risk of collisions and fatalities. The amount of money lost by the car sector to counterfeiting is impossible to pin down exactly, although the numbers are definitely high.

Not only has counterfeiting devastated the luxury fashion, consumer electronics, and automotive industries, but it has also severely damaged the pharmaceutical industry. Since counterfeit medications frequently lack the right regulations, essential active components, and suitable storage conditions, they represent a serious risk to public health. There are many different types of counterfeit medications, ranging from extremely complex counterfeit prescription medications to counterfeit replicas of well-known over-the-counter treatments. Although it is difficult to pinpoint the precise amount of money lost as a result of fake medications, it is thought to be in the billions of dollars worldwide, with the US being a significant affected market.

In conclusion, the United States faces a great deal of challenge from counterfeiting, which affects a number of well-known companies in a variety of industries. The automotive, consumer electronics, luxury fashion, and pharmaceutical industries are especially susceptible to counterfeiting activities. Although it is impossible to pinpoint the exact amount of money lost via counterfeiting, realistic estimates indicate that billions of dollars are removed annually from the US economy. In order to protect consumer safety, brand reputation, and economic interests, stopping counterfeiting requires greater knowledge, stronger enforcement of intellectual property rights, and international cooperation.

Federal Counterfeit Law - 15 U.S. Code § 1116(d)

(d) Civil actions arising out of use of counterfeit marks

(1)(A). In the case of a civil action arising under section 1114(1)(a) of this title or section 220506 of title 36 with respect to a violation that consists of using a counterfeit mark in connection with the sale, offering for sale, or distribution of goods or services, the court may, upon ex parte application, grant an order under subsection (a) of this section pursuant to this subsection providing for the seizure of goods and counterfeit marks involved in such violation and the means of making such marks, and records documenting the manufacture, sale, or receipt of things involved in such violation.

(B) As used in this subsection the term “counterfeit mark” means—

(i)  counterfeit of a mark that is registered on the principal register in the United States Patent and Trademark Office for such goods or services sold, offered for sale, or distributed and that is in use, whether or not the person against whom relief is sought knew such mark was so registered; or

(ii). a spurious designation that is identical with, or substantially indistinguishable from, a designation as to which the remedies of this chapter are made available by reason of section 220506 of title 36;

but such term does not include any mark or designation used on or in connection with goods or services of which the manufacture  or producer was, at the time of the manufacture or production in question authorized to use the mark or designation for the type of goods or services so manufactured or produced, by the holder of the right to use such mark or designation.

Intent is not required pursuant to 15 U.S.C. 1117(c).  The statute has TWO levels of statutory damages for both willful and non-willful violations.

(c) Statutory damages for use of counterfeit marks.  In a case involving the use of a counterfeit mark (as defined in section 1116(d) of this title) in connection with the sale, offering for sale, or distribution of goods or services, the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of ACTUAL DAMAGES and profits under subsection (a), an award of statutory damages for any such use in connection with the sale, offering for sale, or distribution of goods or services in the amount of—


not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just; or


if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.

Attorney Steve® Tip: So, a Counterfeit Plaintiff will have the choice to seek whichever damage is HIGHER - actual damages or statutory damages.

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About the Author

Steve Vondran

Thank you for viewing our blogs, videos and podcasts. As noted, all information on this website is Attorney Advertising. Decisions to hire an attorney should never be based on advertising alone. Any past results discussed herein do not guarantee or predict any future results. All blogs are written by Steve Vondran, Esq. unless otherwise indicated. Our firm handles a wide variety of intellectual property and entertainment law cases from music and video law, Youtube disputes, DMCA litigation, copyright infringement cases involving software licensing disputes (ex. BSA, SIIA, Siemens, Autodesk, Vero, CNC, VB Conversion and others), torrent internet file-sharing (Strike 3 and Malibu Media), California right of publicity, TV Signal Piracy, and many other types of IP, piracy, technology, and social media disputes. Call us at (877) 276-5084. AZ Bar Lic. #025911 CA. Bar Lic. #232337

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