Is it illegal to sell something that is considered a counterfeit?
Most people know that when it comes to brand-name or licensed items, there is often a higher cost associated with these types of goods. From a few dollars to a couple hundred, the increased cost of these items can be a turn off for some consumers, causing them to turn to retailers who appear to be offering the same item, but at a lower price.
Unfortunately, in some cases, these lower-cost items may be what are called counterfeits, meaning they were not manufactured or produced by the item's owner or with their permission. In many cases, counterfeits look exactly like the original good, leaving consumers none the wiser.
This brings us though to the question above: is it illegal to sell something that is considered a counterfeit? Some of today's readers may not realize it but the answer to this question is a resounding yes. This means that anyone caught trying to sell counterfeit merchandise could face serious criminal charges as well as steep penalties. Let's take a look.
The criminal charges and penalties associated with selling counterfeit merchandise is codified under the Trademark Counterfeiting Act of 1984. Section 18 U.S.C. § 2320 specifically states that a person can be charged with a felony if they are found guilty of "intentionally traffic[king] or attempt[ing] to traffic in goods and services and knowingly us[ing] a counterfeit mark on or in connection with such goods or services."
The penalties for violating the Act depend on the circumstances of the case, meaning a person could face anything from a $2 million fine and 10 years in prison to a $5 million fine and 20 years in prison for past charges under the same law. For many years now, individuals have been prosecuted under this law, and many have received jail sentences. We have represented individuals who sold counterfeit Microsoft software; millions of dollars of counterfeit NFL jerseys; counterfeit athletic shoes and clothing and other items. In each case we were able to keep the client out of jail or substantially minimize the sentence.
On top of criminal fines and the chance of a lengthy prison sentence, sellers of counterfeit merchandise may also face civil actions brought by the item's original owner. A seller may be held accountable for trademark infringement, owing the trademark owner compensatory damages which could include all profits from the sales.
Source: FindLaw, "Selling Fakes Online," Accessed Aug. 10, 2015