Selling Counterfeit, or Knockoff Items, Can Land You in Jail

Criminal-Defense-Lawyer-300x238The internet has made it easy for people to sell items online to make some extra money. Popular websites, such as eBay and Craigslist, have made it easy for almost anyone to instantly go into business by simply using a computer or a cell phone to get into the retail business. However, you should be aware of the potential pitfalls of doing business like this. Recently, I was hired to represent a client charged with violating the Illinois Counterfeit Trademark Act. The Counterfeit Trademark Act (765 ILCS 1040/) makes it a crime to sell look alike goods or services bearing a fake trademark or logo. The client that I was hired to represent was selling knockoff high-end watches on Craigslist that he had purchased legally from China. The client was buying the watches for about $50 and selling them online for between $200 and $250. This was not the clients main source of income, but it made him enough money to comfortably pay his bills and provide for his family. That’s until the client was arrested charged with violating the Counterfeit Trademark Act. It was not until the client came to my office bad he found out that what he was doing was against the law and that it carried some pretty serious criminal and monetary penalties.

I want to discuss this crime and lay out the penalties and consequences of being charged with violating the Illinois Counterfeit Trademark Act.

The idea behind making it illegal to sell counterfeit goods is to avoid confusing and duping consumers. You can be guilty of violating the Counterfeit Trademark Act even if the buyer and seller are aware that the item is a knockoff. Not all knockoff items are considered to be counterfeit. For instance, gym shoes that look like the real Nike gym shoes are not automatically considered to be counterfeit just because they look like the real Nike gym shoes. What could make them illegal is if they have a Nike logo on them that looks like the real Nike logo. The fake Nike logo is what could fool a consumer into believing that its the real thing. Think of counterfeit goods as infringing on the Trademark of a brand and making money trying to do that.

Companies take the selling of counterfeit items very seriously. For some of these companies, their trademark and logos, are the most valuable asset for their business. If you speak to representatives of companies like Rolex, Gucci, and Louis Vuitton, they will tell you that the online marketplace for selling their counterfeit products has a significant impact on their revenues and their resulting bottom line. The impact on their sales has a significant impact on their total revenues and has caused many of these companies to see a drop in their stock price and has led to layoffs of employees. Because of the serious financial costs to these companies, many of the criminal cases involving the Counterfeit Trademark Act originate with investigations that were begun by these companies and were put together with evidence obtained by investigators hired by, and paid for, by private companies. Sometimes, the private companies want to send a message to the public that you will be prosecuted to the fullest extent of the law if you try to sell their knockoff and counterfeit products to deter this conduct. . The private companies put pressure on local law enforcement and prosecutors to aggressively pursue cases involving the Counterfeit Trademark Act aggressively to get the message out.

The criminal penalties for violating the Counterfeit Trademark Act vary from a Class A Misdemeanor for selling up to 100 counterfeit items for less than $300, to a Class 1, non-probationable felony for offering for sale 2,000 or more counterfeit items having a retail value of $500,000 or more. The mandatory fines for violating the Counterfeit Trademark Act can be very serious. You can be ordered to pay a fine that is up to the entire retail value of all the counterfeit knock-offs that you were trying to sell. The amount of the fine will be based on the retail value of all of the items you were trying to sell, not just the items that you actually sold or were advertising for sale.

In addition to the criminal penalties, you could also be facing civil penalties or selling counterfeit and knockoff items. The company can sue you for violating their trademark. If you are sued for violating a trademark that is registered with the federal government, you can be ordered to pay money damages up to 3-times your profits, or 3-times the damages to the victim, plus pay the reasonable attorney fees of the victim.

Not only can you land in jail for selling counterfeit and knock off items, but you can also be destroyed financially.

James Dimeas, is a nationally-recognized, award-winning, criminal defense lawyer, with over 28-years of experience handling criminal cases throughout Chicago, Cook County, DuPage County, Kane County, and Lake County. Recently, James Dimeas was named a “Top 100 Criminal Defense Lawyer in the State of Illinois for the Years 2018, 2019, 2020, and 2021, by the American Society of Legal Advocates. James Dimeas was named a “Best DUI Attorney” and a “Best Criminal Defense Lawyer in Chicago” by Expertise. James Dimeas was named a “Top 100 Criminal Defense Trial Lawyer” by the National Trial Lawyers. The National Academy of Criminal Defense Attorneys awarded James Dimeas the “Top 10 Attorney Award for the State of Illinois.” James Dimeas is rated “Superb” by AVVO, the highest ranking possible for any criminal defense lawyer in the United States. The American Institute of Criminal Law Attorneys recognized James Dimeas as a “10 Best Attorney for Client Satisfaction.” Attorney and Practice Magazine gave James Dimeas the “Top 10 Criminal Defense Attorney Award for Illinois.”

If you are facing criminal charges, you can contact James Dimeas anytime for a free and confidential consultation. You can always talk to James Dimeas personally by calling him at 847-807-7405.

Additional Resources:

Counterfeit Trademark Act, 765 ILCS 10470/.

Additional Blogs:

Do I Have to Appear For Every Court Date?, by James G. Dimeas, Chicago Criminal Lawyer Blog, May 29, 2019.

What’s the Difference Between a Misdemeanor, Felony and Municipal Violation?, by James G. Dimeas, Chicago Criminal Lawyer Blog, August 8, 2017.