Trademark Counterfeiting

Trademark counterfeiting costs companies millions of dollars per year.  Trademark counterfeiting is when an actual trademark is placed on a product or associated with a service that is not the legitimate product or service offered by the trademark owner.  An example of this is knock-off designer products made in China but sold as being authentic brand product.  Trademark counterfeiting is prohibited by the federal Trademark Act, also known as the Lanham Act.  15 U.S.C. § 1114(a), Lanham Act Section 32(a).   

The Lanham Act provides for special damages in trademark counterfeiting cases.  In addition to actual damages, ill-gotten profits, treble damages, and attorney’s fees, the Lanham Act provides for statutory damages ranging between $500 and $100,000 per counterfeit good sold or if the court finds the sales to be willful, up to $1,000,000.  15 U.S.C. § 1117(c), Lanham Act Section 35(c).  The trademark owner can also seek injunctive relief to prevent trademark counterfeiting as well as a seizure order by federal marshals.  Finally, trademark counterfeiters are also subject to criminal prosecution.   

One way a brand owner can protect its trademarks and prevent trademark counterfeiting is to avail itself of eBay’s Verified Rights Owner program (VeRO).  Counterfeit goods bearing counterfeit trademarks are too often offered for sale by unscrupulous sellers to unwitting buyers and in violation of the brand owners’ trademark rights.  But eBay’s VeRO procedure allows the trademark owner to provide notice of a suspected infringing counterfeit product.  eBay will likely remove an item, thereby canceling an auction or listing, typically within 24 hours of receiving a VeRO brand owner’s notice of infringement.  Under that process, the seller may file a counter notice and if accepted, eBay requires the owner to file suit within 10 days or the listing will be reinstated.  The eBay VeRO procedure thus provides an effect process for trademark owners to stop trademark counterfeiting.