Every year, millions of people go to small shops, flea markets, and bodegas to buy counterfeit or knockoff designer products while others purchase them online. Wherever one goes, there are always some questions regarding the legality of these transactions. After all, sellers are knowingly selling products that are a copy of a trademarked and copyrighted work.
But the promotional items and merchandising industry can be tricky. So, you may be wondering, will you get in trouble if you sell counterfeit goods?
Here’s what you need to know about selling counterfeit goods and the legal consequences that come with it.
What Is Counterfeiting?
Counterfeiting products is an act of trademark infringement. It’s when an individual or a group creates or sells lookalike products with fake trademarks. For instance, a business deliberately copying the Herschel trademark on bags is guilty of the act.
Aside from directly selling counterfeit products, a simple offer to place knockoff goods may also trigger counterfeiting liability. For instance, when a person offers to sell fake shirts and gives a sample to an undercover authority figure, proof of the shirts’ production and the sale wasn’t necessary to prove it’s an act of counterfeiting.
However, keep in mind that counterfeiting isn’t limited to physical products like watches or backpacks. For example, when a website copies a logo, like the Playboy Bunny logo for adult subscription services is an act of counterfeiting.
Additionally, when the individuals buying and selling the products are aware that it isn’t from the original manufacturer is also counterfeiting. That’s because when buyers purchase knowing the products are fake, they can still use them to deceive others.
Why Is It Illegal?
Although it may seem harmless, counterfeiting can lead to drastic effects, such as the original manufacturers losing profit to consumers wasting thousands of dollars on fake goods. After all, a counterfeiter’s primary goal is to dupe buyers into thinking they’re buying the real deal—making the act illegal.
The Federal law prohibits any individuals to traffic in counterfeit products and extends to any person or company knowingly reselling these fake goods. This law is known as the ‘Trademark Counterfeiting Act of 1984,’ carrying hefty monetary fines and prison time for anybody who violates the act.
The punishments or legal consequences that individuals and organizations face when selling counterfeit products are significantly different but are still very substantial and damaging.
People who knowingly sell counterfeit goods have a lot to lose under Federal law, including:
- Imprisonment – Whether an organization or individual sells counterfeit products, if they’re first time offenders, they can face up to 10 years in person and 20 years for repeat offenders. However, an entity knowingly causing a third-party’s death due to unlawful sales will face a lifetime prison sentence.
- Fines – When individuals get caught selling counterfeit products, they can face up to $5 million of penalties, while corporations need to pay over $15 million.
No matter if you’re an individual or corporation, law authoritative figures will seize and destroy all counterfeit products under your possession.
The original trademark owner may also file civil lawsuits against a counterfeiter to recover lost profit, damage, lawyers’ fees, and injunctive relief.
Due to the considerable impacts counterfeits inflict on the original companies, laws are stringent regarding selling knockoff products—eventually leaving sellers in big legal trouble. So, if you’ve considered selling counterfeit products to make a quick buck, it’s not worth the risk.