counterfeit vs trademark infringement

Businesses rely on trademarked logos and names to build a profitable brand. When another company sells counterfeit or otherwise infringing products to generate income that rightfully belongs to the trademark owner, it can quickly cut into profits. Low-quality infringing products can also be harmful because they damage the trademarked brand’s reputation. 

BrewerLong represents business owners and focuses on building and protecting your intellectual property portfolio. 

What Is a Trademark?

The first step to determining whether something is counterfeit or infringing is to evaluate whether the copied product holds a valid trademark. A trademark or service mark is any word, phrase, symbol, design, or combination thereof that identifies your goods or services and distinguishes you from your commercial competitors. 

Common law protects your trademark once you use the mark with your goods and services in commerce. But to make your trademark known and fully enforceable nationwide, you must federally register it with the United States Patent and Trademark Office (USPTO). 

What Is Trademark Infringement?

The USPTO summarizes the definition of trademark infringement set forth in 15 U.S. Code § 1114 as follows:

“trademark infringement is the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.”

Intent is not an element of trademark infringement, though. So even if a seller unwittingly used a mark confusingly similar to a registered trademark, that seller still infringes. 

If a trademark owner has federally registered their mark, they are entitled to a legal presumption that:

  • The mark is valid,
  • They own the mark, and
  • They have the exclusive right to use the mark nationwide.

Thus, registering your trademark with the USPTO makes infringement cases easier to prove.

What Is a Counterfeit?

Counterfeits are goods or services that intentionally resemble trademarked goods or services. They carry a mark that is identical or nearly identical to the valid mark, with the intent of appearing identical, or nearly identical, to the goods of the intellectual property owner. Unlike goods that unintentionally bear a logo confusingly similar, but not identical, to the trademarked goods, the point of a counterfeit is to replicate the trademarked goods and profit from their brand recognition.

What Is Counterfeit Infringement?

Because the express purpose of counterfeit goods is to deceive the consumer, they infringe virtually by definition. Moreover, counterfeit goods infringe even if some buyers know they are fakes because other buyers will be deceived. But because the law seeks to punish such blatant disregard for others’ rights, civil and criminal laws provide additional remedies for counterfeit infringement.

Civil Remedies

The Lanham Act (15 U.S. Code § 1051 et seq.) expressly prohibits individuals from using counterfeit products and services in commerce and imposes strict penalties. These include requiring violators to pay:

  • Defendant’s profits, 
  • Any damages sustained by the plaintiff, and
  • The costs of the action.

If the court finds the defendant intentionally sold, offered for sale, or distributed counterfeit products or services in commerce, the court may award triple the profits or damages and lawyer fees. 

Instead of profits or actual damages, a plaintiff may elect to receive statutory damages under the Lanham Act. These range from $1,000 to $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed. If the court finds the defendant willfully used the counterfeit mark, these statutory damages may rise to $2,000,000 per counterfeit mark. 

In addition to damages, the Act authorizes the trademark owner to request a court order to seize counterfeit materials and instrumentalities if the defendant is likely to conceal or transfer these items. This is in addition to any order enjoining the counterfeiter from further production or sales.

It is important to note that the Lanham Act applies only to registered trademarks. This is yet another reason that federal registration is vital to protecting the value of your intellectual property. 

Criminal Consequences

To underscore how seriously the government takes the sale of counterfeit goods and services, Congress passed the Trademark Counterfeiting Act in 1984. This act criminally punishes anyone who knowingly uses a counterfeit mark and trafficks counterfeit goods or services. Under the Act, a court may fine an individual up to $2,000,000 or imprison them for up to 10 years, or both. The fines may be higher for businesses or repeat offenders. 

BrewerLong Can Advise You On Trademarks and Counterfeits

Counterfeit and infringing products hurt your business by stealing profits as well as damaging your company’s reputation. Generally, you must act quickly against those misusing your trademarks to avert significant damage.

BrewerLong’s attorneys focus on helping business owners and executives protect their businesses and intellectual property. Our goal is to minimize risks, but we will vigorously defend your rights and assets when necessary. BrewerLong provides comprehensive coverage of all of your business’s legal needs. Reach out to our central Florida office today.

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