Should Charities and Homeless Benefit from Counterfeit Goods?

posted by Tamera Bennett | - Thu, 14 Jan 2010 15:31 | - Permalink

Over the years I have run across trademark licenses and trademark infringement settlement agreements where one party or the other wants the ability to donate counterfeit goods that may have been confiscated to a charity.  Rights holders often refuse because of the concern that the counterfeit goods may not actually go to a charity, but be placed back into the stream of commerce and resold in the marketplace.  A bigger concern for trademark holders is the quality and safety of the counterfeit/infringing items.  Could someone be hurt by a dye in fabric or paint on a toy?

This December, the homeless in LA benefitted from recently passed Senate Bill 324.  The Los Angeles Police Department piracy unit donated 10,000 pairs of confiscated counterfeit athletic shoes.  Under the California Penal Code section 350, the police may donate, with consent of the trademark owner, confiscated counterfeit goods to organizations serving the homeless.

The New York Times reported this week that in 2009 the City of New York shredded and incinerated tons of “knock-off” clothing collected in police raids.  In the past the City donated these garments to charity organizations that removed the counterfeit trademark markings.  In 2009 the City reports there were no requests for the goods to go to charities.

The US Customs and Border Protection are involved as well.  The New York/New Jersey US Customs and Border Protection field office is the fourth US Customs office to develop a counterfeit donation program.  Los Angeles, Detroit and San Francisco US Customs and Border Protection field offices already have such programs in place.  Most of the items included in the donations are clothing, but there have been some donations of televisions. 

Article 46 of the TRIPS agreement governs what the US Customs and Border Protection may do with confiscated items.  This link is a law review note that gives lots of details on the pros and cons of donating items to charity.   The article looks at the situation that occurred where over $20 million dollars in seized infringing items were provided to hurricane survivors after Hurricane Katrina.

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Softwarediner.com Pirate Gets Served 21 Month Prison Term

posted by Keith Kupferschmid | - Tue, 12 Jan 2010 14:31 | - Permalink

Yesterday in Phoenix federal court, Matthew Purse was sentenced to 21 months in federal prison, 3 years probation and $12,000 in fines and restitution. Purse had pled guilty to conspiracy, mail fraud and criminal copyright infringement when he and his accomplice, Chris Walters (who remains a fugitive), were caught engaing inseveral massive software piracy schemes through various eBay accounts and various websites, such as SoftwareDiner.com and Fivedollarsoftwarehouse.com.

SIIA initially discovered several massive software piracy schemes and began an investigation that eventually led to the indictment and conviction of Purse. SIIA forwarded the results of its investigation to the U.S. Department of Justice and other government agencies, and then worked closely with them to pursue Purse and others involved in the piracy schemes. On February 26, 2009, Purse pled guilty to conspiracy, mail fraud and criminal copyright infringement.  Purse and Walters duped nearly 8,000 unsuspecting consumers out of hundreds of thousands of dollars and cheated software companies such as Adobe, Symantec, Apple, Corel, Intuit and many others out of millions of dollars in revenue.  For more on this check out SIIA's press release.

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Fakes Don’t Pay Salahi’s Court Debt

posted by Tamera Bennett | - Fri, 11 Dec 2009 14:06 | - Permalink

Tareq Salahi, one half of the couple that crashed the White House state dinner a few weeks ago, paid-off his landscaper by a court’s order to turn over a “Patek Philipe” watch valued at more than $15,000.00.  Oops, it was a fake valued at around $100.00.

The Washington Post reports the timepiece was evaluated by a jeweler to determine it was a counterfeit watch. 

My question…. Did Mr. Salahi know he was wearing a fake?  I am assuming the brand on the watch was not misspelled and there were no obvious signs of it being counterfeit.  This article from the New York Times gives some great insight on how every day is “Black Friday” in the counterfeit market.  One vendor on Canal Street in New York was offering deals on “Patek Phillipe” (notice the two “l’s” in Philipe) watches. 

How do you spot a fake a watch? After you confirm the name is spelled correctly, attorney Donald J. Valdez, who specializes in luxury product brand enforcement, says “if you see the second hand going tick, tick, tick … you have a fake.” Valdez continues, “The sweep hand on luxury brand watch will be perpetual motion.  Some fakes have been developed where it is difficult to spot the tick.”

Two other tail-tail signs are the color of the watch casing surrounding the face of the watch varying from an original and the stretch or elasticity in the band. “If you purchase a watch with an expansion band and it expands like a baby gate and doesn’t slide back into place, it is a fake,” says Valdez.

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