Posted on February 19, 2016
“Counterfeit Goods” Charges – California Penal Code 350 PC
In California, Trademark Infringement / Counterfeit Marks is charged under Penal Code 350 which makes it a crime to possess for sale, actually sell, or manufacture any counterfeit goods with a registered trademark. Goods encompasses anything from sunglasses, purses, wallets, clothing and apparel. In most instances, the goods are manufactured overseas but sold within the United States. Arrests are generally made after billion dollar companies hire private investigation firms to track down offenders on social media, craigslist, or through informants, then make a purchase undercover, and subsequently report their investigation to local police. This article will discuss 7 important things you need to know about the crime Trademark Infringement / Counterfeit Goods.
1. What is the Legal Definition of PC 350?
PC 350(a) provides: “Any person who willfully manufactures, intentionally sells, or knowingly possesses for sale any counterfeit mark registered with the Secretary of State or registered on the Principal Register of the United States Patent and Trademark Office…” [is guilty under this statute].
2. What Must the Prosecutor Prove for this Charge?
In order for you to be found guilty of manufacturing, sale, or possession for sale of counterfeit goods under PC 350, the government has the burden of proving each of the following elements beyond a reasonable doubt:
1. You were in possession of counterfeit goods;
2. While you were in possession, you had the intent to sell the counterfeit goods, or you actually sold counterfeit goods, or you manufactured counterfeit goods;
3. The counterfeit good(s) contained a seal registered with the U.S. Patent & Trademark office.
3. What are the Legal Defenses to Counterfeit Goods?
• You did not know that you were in possession of counterfeit goods. Perhaps you were coincidentally at a location which contained articles of counterfeit goods. Or a friend left articles of counterfeit goods in your car without your knowledge.
• You did not know the goods were actually counterfeit but authentic. Sometimes articles are so well crafted that expert examiners have difficulty telling the difference.
• You did not possess the goods for the purposes of sale but rather for personal use or personal fashion appeal.
• You were not in legal possession of the goods. The government can prove two ways of “possession.” Actual possession means that the goods were found on your person or a container in which you were holding. Constructive possession means you exercised control over the goods or had the right to exercise control over the goods. Because constructive possession is not precisely defined, it is often the legal issue in a case. Furthermore, simply being present without any other evidence is not enough to sustain a conviction for this offense.
• The goods in which the government is alleging to be counterfeit is actually authentic or the government cannot prove the goods are counterfeit.
• The goods did not contain a seal registered with the U.S. Patent & Trademark Office.
• The police committed an illegal search and seizure in violation of your Fourth Amendment right mandating the suppression of the physical evidence.
• Your incriminating statements were illegally obtained in violation of your Miranda rights. Your statements could be what’s used against you in proving you possessed the items for sale – e.g., “I sometimes sell this stuff to my friends.”
4. How does the Government Prove I Possessed the Item(s) for the Purposes of Sale?
• You were in possession of a large sum of money
• Notes, pay sheets, or other documentation indicating sales transactions
• Your incriminating statement(s) given to police officers
• A large amount of counterfeit goods beyond what’s reasonably expected for personal benefit. For instance, 100 purses / hand bags, 50 wallets, etc.
• Statements from your friends, colleagues, or confidential informant(s)
• Evidence that you sold goods previously to an undercover investigator
• Recorded phone calls where you discuss the sale of goods to an undercover investigator
5. What is the Punishment for Trademark Infringement / Counterfeit Marks?
The punishment for this offense depends largely on whether you suffer from a previous conviction for this offense and/or the amount of articles you’re being accused of possessing for sale, sold, or manufactured.
• Under PC 350(a)(1), if the amount of goods is less than 1,000 articles, it’s a misdemeanor offense carrying up to 1 year in the county jail and a fine not exceeding $10,000.
• Under PC 350(a)(2) if the offense contains 1,000 or more articles of counterfeit goods, then it becomes a wobbler offense. In other words, the prosecutor holds discretion when electing to charge you with a felony or misdemeanor. A misdemeanor conviction is the same punishment as discussed above. However, a felony conviction carries a sentencing range of 16 months, 2, or 3 years in the county jail.
• Under PC 350(b), if you were previously convicted of this offense, it is a wobbler. The punishment will depend on whether you were convicted of a felony or misdemeanor, both were discussed above.
Fortunately, if you were convicted of a felony for this offense that did not result in a state prison sentence, you may be eligible to reduce you felony to a misdemeanor under PC 17(b). If granted reduction, the offense will be reduced to a misdemeanor “for all purposes” relieving you from ever having to discuss that you were previously convicted of a felony. Factors the judge will consider before ruling on your reduction motion are:
• Your prior criminal history
• The planning and sophistication of your crime
• How big your counterfeiting operation was
• The reason for seeking reduction – e.g., military, immigration, licensing, etc.
6. What are Examples of the Crime Possession/Sold/Manufacturing a Counterfeit Mark?
• You’re storing over 5,000 articles of counterfeit marks in your garage.
• You sold a counterfeit purse to an undercover investigator.
• You inserted an authentic registered trademark seal on non-authentic good.
• You made arrangements to sell a bag of counterfeit marks to someone.
7. Free Criminal Defense Consultation
If you’ve been arrested, charged, or are under investigation for possession for sale or manufacturing a counterfeit good under PC 350, Contact Counterfeit Defense Lawyer John Rogers at the Law Offices of John D. Rogers for a free confidential consultation concerning your rights and defenses.