Counterfeit Goods

Title 18 U.S. Code § 2320 - Trafficking in Counterfeit Goods 

Financial struggles can be challenging to overcome. When economic instability causes stress, some individuals turn to illegal activities, such as trafficking counterfeit goods.

Under Title 18 U.S.C. 2320, it is a federal crime to traffic in counterfeit goods or services.

The federal government aims to safeguard the reputation of genuine products, particularly those with federally protected marks, military equipment, and medical drugs. 

Consequently, federal law criminalizes the trafficking and dealing in counterfeit items, imposing harsh penalties, including hefty fines and imprisonment in the Federal Bureau of Prisons.

18 U.S.C. 2320 establishes federal laws against trafficking in counterfeit goods and outlines various ways to violate them.

It is also illegal to knowingly traffic counterfeit military goods or services due to the high risk of causing serious harm or disrupting military operations.

What is Considered "Trafficking?"

Contextually, "trafficking" refers to the transportation, transfer, or disposal of goods or services for commercial purposes.

Essentially, it's illegal to engage in trafficking goods or services when you know they bear a counterfeit mark. The offender must know or reasonably should have known that the mark is counterfeit.

Additionally, trafficking in labels, boxes, or other packaging with a counterfeit mark that could cause confusion or deception is also illegal. The same knowledge standard applies in these cases.

Further, trafficking in counterfeit drugs is prohibited under the law. Under 21 U.S.C. 321, a "drug" encompasses various narcotics, pharmaceuticals, supplements, and medical items.

Our federal criminal defense attorneys will review this federal statute in more detail below.

What is the Content of Section 2320?

18 U.S.C. 2320 is a law that specifies the rules and penalties for trafficking in counterfeit goods. In summary: it is unlawful to "traffic'—meaning transport, transfer, or dispose of—any counterfeit items falsely presented as genuine.

The statute defines four potential offenses under § 2320:

• Knowingly engaging in the trade of goods or services that bear a "counterfeit mark,"
• Knowingly engaging in the sale or transfer of items bearing a counterfeit mark. Such items include labels, stickers, wrappers, tags, patches, badges, emblems, medallions, charms, boxes, cans, containers, cases, packaging materials, and related documentation.
• Knowingly trafficking in counterfeit military goods or services that could likely cause death or bodily harm to the user, disclose classified information, impair combat operations, or cause significant harm to a member of the Armed Forces.
• Trafficking in a drug that bears a counterfeit mark, such as dietary supplements or pharmaceuticals.

What Defines a "Counterfeit Mark?"

Legally, a counterfeit mark is defined as a "spurious," or fake, mark.

This refers to a mark that is identical or nearly identical to an already registered mark with the U.S. Patent and Trademark Office, used similarly or in connection with the registered mark, which may cause confusion, mistakes, or deception.

Counterfeit marks frequently display logos, symbols, insignias, or other branding elements.

What Are the Potential Penalties for a Conviction?

Section 2320 sets out penalties for trafficking in counterfeit goods, with punishments varying depending on whether the offender is an individual or a legal entity, such as a business or corporation.

It is important to note that efforts or conspiracies to violate this law carry the same penalties as actual violations. The specific penalties for breaching 18 U.S.C. § 2320 are detailed within the statute and are relatively clear. For general violations:

• Once convicted, trafficking in counterfeit goods can result in fines of up to $2,000,000 and imprisonment for as long as 10 years.
• For a second offense, the fees increase to $5,000,000, and imprisonment can last up to 20 years.

For violations where the convicted individual has caused or tried to cause serious bodily injury:

• The convicted individual faces a fine of $5,000,000 and potential imprisonment for up to 20 years.
• If the violation causes a person's death, the defendant could face life imprisonment.

For violations related to military or drug offenses:

• A first offense can result in a fine of up to $5,000,000 and imprisonment of up to 20 years.
• A subsequent violation can result in fines up to $15,000,000 and a prison sentence of up to 30 years.

If a legal entity, rather than an individual, commits the offense:

• If convicted, a first-time offense can result in penalties of up to $5,000,000.
• Up to $15,000,000 for later violations,
• If the following violation involves trafficking in drugs or military goods and services, the maximum fine rises to $30,000,000.

Similar to other federal crimes, attempting or conspiring to commit an offense is prosecuted as if the crime had been completed.

Under 18 U.S.C. § 2323, full restitution may be ordered for victims. Additionally, counterfeit goods can be forfeited and destroyed, and restitution to any financially affected party can be mandated under 18 U.S.C. § 2323.

What Are Some Possible Additional Federal Charges?

Simultaneous charges often occur in federal cases. 18 U.S.C. 2320 is commonly paired with:

• 18 U.S.C. § 1961 - RICO
• 18 U.S.C. § 1029 - Credit card fraud
• 18 U.S.C. § 1341 - Mail fraud
• 18 U.S.C. § 1343 - Wire fraud
• 18 U.S.C. § 1956-1957 - Money laundering
• 18 U.S.C. § 371 - Conspiracy to commit a crime
• 18 U.S.C. § 471 - Forgery of United States securities

Possible Defenses for Counterfeit Goods Trafficking Charges

Similar to other fraud cases, federal prosecutors relying on 18 U.S.C. § 2320 need to demonstrate that the defendant knew about the crimes involved. You might argue that you were unaware that the goods or services you dealt with were counterfeit.

Items imported from abroad may not be considered counterfeit, even if produced outside authorized channels. These are known as "parallel imports" or "gray market" goods.

Additionally, in some cases, the defendant previously had the trademark owner's authorization to produce these marked items.

Even if some goods were manufactured after that authorization expired, it can be argued that these "overrun goods" do not fall within the definition of counterfeit under 18 U.S.C. § 2320.

If the government violated your Constitutional rights in investigating or obtaining evidence, the seized evidence could be suppressed from a case after filing and arguing a successful motion.

Eisner Gorin LLP is a top-ranked federal criminal defense law firm in Los Angeles, California. We provide legal representation across the United States for all types of federal offenses. You can contact us for a case review via phone or contact form.