Trafficking in Counterfeit Goods/Labels
The primary federal criminal law prohibiting trademark infringement is 18 U.S.C section 2320 which prohibits trafficking in counterfeit goods and labels. In order to establish a violation of this section, the government must prove beyond reasonable doubt four separate elements: (1) the defendant trafficked or attempted to traffic in goods or services; (2) such trafficking, or the attempt to traffic, was intentional; (3) the defendant used a “counterfeit mark” on or in connection with such goods or services; and (4) the defendant knew that a counterfeit mark was so used. Thus, this section has two separate mens rea requirements: first, that the trafficking was “intentional.” Second, that the defendant “knows” that the use of the mark on or in connection with those goods or services is counterfeit. Courts have held consistently that the two mental elements identified in (2) and (4) do not require proof of a “specific intent” to violate the statute, namely, proof that the defendant knew that his act violated the law. Rather, courts have held that Congress’ definition of the crime prohibited by section 2320 “explicitly” requires proof of only a general intent.
The act does not require any showing of loss to the victim. The government is not required to prove that the rightful owner of the mark would have made additional sales but for the sales of the counterfeiter, or that the value of its mark was diminished. In the legislative history, Congress noted that the bill was intended to reach all counterfeiting that affects interstate commerce, specifically including “trafficking that is discovered in its incipiency, such as before counterfeit merchandise has left the factory.” Thus, the government need not show that the defendant made any sales, nor any unjust enrichment by the counterfeiter, who may have actually lost money on the counterfeiting operations. Nor is it necessary to prove that the product received under the counterfeit mark was somehow faulty and caused any consequential loss or harm to the recipient. Indeed, it is not even necessary to demonstrate that the product received is of lesser quality than the genuine product. This point is especially salient in cases where the defendant is being prosecuted for trafficking in digital goods bearing a counterfeit mark, such as computer software or music (as sold on, e.g., compact discs) because copies of digital goods can be identical to a legitimate product.
Chapter 4 of my book, Intellectual Property & Computer Crimes, (Law Journal Press) contains a detailed discussion of trafficking in counterfeit goods under 18 U.S.C. section 2320. It has been updated twice a year since first being published in 2003.