Category

Intellectual Property

Battle Over Michigan State Highway M-22 Trademark

By Intellectual Property

Brothers Matt and Keegan Myers are kiteboarding royalty. (Kiteboarding is a sport in which a person’s feet are strapped to a small surfboard and is propelled by a kite to which the person is harnessed.)  They traveled the world in search of the perfect winds and waves. They realized that the ideal conditions had been right in front of them all along in Michigan, their homestate. Together, they started a kiteboarding company called Broneah, Inc. Later, in 2003, the brothers started printing T-shirts and bumper stickers with the logo of Michigan’s scenic State Highway M-22 for local surfers and kiteboarders. In 2006, the brothers were featured on the cover of the local Traverse Magazine in which Keegan wore a T-shirt with the M-22 logo. Immediately, there was a high demand for M-22 T-shirts and in November 2007, the brothers opened the M-22 Inc store in Traverse City, Michigan. The brothers trademarked the words “M 22” in 2008 and the M-22 state highway logo in 2011.

To the brothers, M-22 symbolizes an outdoorsy, active way of life that is exemplified in the northern shore of Lake Michigan. They have been aggressively protecting their trademark by sending cease an desist letters to businesses using the M-22 logo. Later, they started asserting the right to images of other Michigan state highways. They and their lawyers argue that the concept of using Michigan’s highway logo (small, black, stylized letter “M” above a large, black number “22”, within a white diamond, on a black square background) on clothing, sporting goods, and novelty items was exclusively theirs.

Other local businesses, like Carolyn Sutherland, owner of Good Hart General Store, disagree. Good Hart General Store is a souvenir shop that sits on M-119 and has been selling items bearing the M-119 logo for decades. This past March, Sutherland appealed to her state representative and put together a 140 page document for him to present to the attorney general. In May, Michigan’s Attorney General Bill Schuette sided with Sutherland and stated, “one person or company cannot claim to have produced all of the goodwill associated with the particular highway-route marker design that represents the region.” However, the brothers are planning on defending their trademark, arguing that trademarks are a matter of federal law, so the attorney general’s opinion is of little significance.

Sources: WSJAmerican Public Media

Homeland Security Seizes Nearly 800 Counterfeit Sports Team Hats and Jerseys

By Customs IP Enforcement, Intellectual Property, International Business

Photo by ICE

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) seized 795 counterfeit items in New Orleans Tuesday with a manufacturer’s suggested retail price (MSRP) of $29,630. The seized items include counterfeit National Football League jerseys, hats bearing the logos of National Football League, Major League Baseball, National Basketball Association and National Hockey League teams, and several counterfeit designer bags.

Last year HSI New Orleans led the nation in counterfeit NFL seizures with more than 7,100 items at an MSRP of more than $1 million. As the host city of the upcoming Super Bowl, Raymond R. Parmer Jr., special agent in charge of HSI New Orleans, said HSI special agents are particularly focused on the identification and seizure of counterfeit sports memorabilia ahead of the game.

“The bottom line is counterfeit goods steal revenue from legitimate businesses and shortchange buyers who think they’re getting the real deal,” said Parmer. “Criminals should take note that we are actively looking for contraband on a daily basis and counterfeit goods will be seized and violators prosecuted to the fullest extent of the law.”

During a routine operation HSI learned the counterfeit goods seized Tuesday were being shipped from an overseas location into New Orleans. HSI then intercepted the shipment and seized the contraband items. Although there were no arrests, the HSI investigation is ongoing.

HSI and partner National Intellectual Property Rights Coordination Center (IPR Center) continually work to keep counterfeit goods off the streets and bring those responsible for producing and distributing them to justice.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters.

SOURCE: ICE

Paraguayan Authorities and Homeland Security Seize More Than $34 Million in Counterfeit Goods

By Blog, Customs IP Enforcement, Intellectual Property, International Business, International IP

Over the past 15 months, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) has provided extensive training and capacity building to Paraguay’s customs office and other Paraguayan law enforcement partners. This training has been very successful, as Paraguayan authorities, working closely with the HSI Buenos Aires attaché, are making extensive seizures of counterfeit goods.

“Partnerships with international customs agencies and border security agents are essential to combating intellectual property theft,” said Raul O. Aguilar, HSI Buenos Aires attaché. Aguilar oversees HSI throughout the southern cone of South America. “HSI is proud to support our Paraguayan colleagues with our expertise in disrupting criminal organizations that import counterfeit products and goods. Fighting these organizations demands a response that is transnational and well-coordinated. I am truly proud of the collaboration we have built with our counterparts.”

Two major recent seizures include:

On Oct. 16, Paraguayan authorities, working collaboratively with HSI, seized counterfeit merchandise with a manufacturer’s suggested retail price (MSRP) of $34 million. On Oct. 11, Paraguayan authorities received information about counterfeit products being smuggled out of Silvio Pettirossi International Airport in Asunción. A criminal organization was attempting to smuggle these goods out of the country — possibly destined for the United States. Law enforcement discovered multiple high-quality counterfeit brand name watches of Swiss origin. Among the various brands were watches from Patek Philippe, Tissot, Tag Heuer, Bulgari and Hublot. In addition, approximately 12,500 counterfeit Samsung cellular phones were discovered. The products were ultimately seized by law enforcement.

On Sept. 26, Paraguayan Customs, working with HSI, identified and searched a shipment of containers sent to Ciudad del Este, Paraguay, from Uruguay. The three containers and their contents included counterfeit Xbox, PlayStation and Nintendo gaming systems. The shipment, with an MSRP of $741,041, was subsequently seized by Paraguayan authorities. This specific case has been presented to the Paraguayan Public Ministry for prosecution.

“HSI will continue to provide training exercises and build strong partnerships with our Paraguayan counterparts in order to assist in the targeting and interception of shipments containing smuggled and illicit cargo,” added Aguilar. “Such training has been instrumental in increasing the abilities of the various agencies within the Republic of Paraguay, and has contributed to an increase in seizures.”

These seizures are the result of HSI’s Illicit Pathways Attack Strategy (IPAS). Over the last two decades, transnational organized crime (TOC) has transformed in size, scope and impact — posing a significant threat to national and international security. TOC networks are proliferating, striking new and powerful alliances, and engaging in a range of illicit activities as never before. The result is a convergence of threats that have evolved to become more complex, volatile and destabilizing. HSI’s response was the creation of the IPAS to break TOC strongholds.

HSI takes very seriously the threat to national security that TOC represents. HSI designed IPAS to focus its resources in a manner that best targets, disrupts and dismantles TOC while maximizing efficiency. IPAS provides a methodology and mechanism for HSI to prioritize threats and vulnerabilities within its mission and to coordinate its own efforts internally and among federal partners. IPAS enhances HSI’s and host country partners’ abilities to investigate and prosecute individuals involved in TOC organizations that threaten the stability and national security of the host countries and pose continuing threats to the homeland security of the United States. Prioritization allows HSI to strategically focus enforcement and capacity building efforts along the continuum of crime within and beyond U.S. borders. IPAS provides a structure for engagement with host country partners — including Paraguay — to increase joint investigations, enhance exchange of information, and support foreign and domestic prosecutions. The IPAS strategy is extremely important in the tri-border area of Paraguay, Brazil and Argentina, where the propensity for TOC organizations is immense.

Source: ICE

Homeland Security Seizes 686 Websites Selling Counterfeit Medicine

By Customs IP Enforcement, Intellectual Property, International IP, Internet / eCommerce

In the largest operation of its kind, 100 countries took part in an international week of action targeting the online sale of counterfeit and illegal medicines. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), in coordination with the Department of Justice, seized 686 websites this week that were illegally selling counterfeit pharmaceuticals. The seizures were part of Project Bitter Pill, the current effort under of Operation In Our Sites (IOS). Bitter Pill was part of the INTERPOL-led Operation Pangea V.

A global enforcement effort, Pangea is an annual operation aimed at disrupting the organized crime networks behind the illicit online sale of fake drugs. Worldwide, preliminary results show Pangea has accounted for 79 arrests and the seizure of 3.7 million doses of potentially life-threatening counterfeit medicines worth an estimated value of $10.5 million. Additionally, approximately 18,000 websites engaged in illegal sale of counterfeit drugs were taken down.

During Pangea V, which ran from Sept. 25 to Oct. 2, operations were conducted in Europe and throughout the United States at websites linked to the illegal Internet supply of medicines. U.S. Customs and Border Protection (CBP) intercepted packages that were believed to contain fake or illicit drugs. Various payment processing companies supported the operation by identifying and blocking payments connected to illicit online pharmacies, identifying individuals responsible for sending spam emails and identifying abuse of electronic payment systems.

“These international partnerships are essential in the global fight against the trafficking of counterfeit drugs,” said ICE Director John Morton. “Instead of taking potentially life-saving medicines, customers are duped into purchasing drugs that are fake or untested and could ultimately do them more harm than good.”

Pangea is coordinated by INTERPOL, the World Customs Organization, the Permanent Forum of International Pharmaceutical Crime, the Heads of Medicines Agencies Working Group of Enforcement Officers, Pharmaceutical Security Institute, and Europol. For the first time, Pangea was also supported by the Center for Safe Internet Pharmacies which brings together 12 of the world’s leading Internet and e-commerce companies.

“When someone is sick, can’t afford to purchase expensive medicine or is just trying to save money, they are more likely to take a chance and buy medicines online, making themselves vulnerable to purchasing fake, illicit or spurious medical products and thus harming themselves,” said INTERPOL Secretary General Ronald K. Noble. “Organized, sophisticated criminals and rogue pharmacies are unfortunately using the Internet to defraud innocent consumers, to place them in harm’s way, to steal their identities and to engage in credit card fraud.”

The goals of this operation were to disrupt the illegal distribution of medicines and to raise public awareness about the significant health risks associated with buying medicines online and the increased risk of becoming a victim of identity and credit card fraud.

Bitter Pill, the U.S. operation, was managed by the National Intellectual Property Rights Coordination Center (IPR Center), including HSI Baltimore, CBP, the U.S. Attorney for the District of Maryland, and the Computer Crime Intellectual Property Section of the Department of Justice Criminal Division. The Food and Drug Administration, Office of Criminal Investigations and the Federal Bureau of Investigation also participated in Pangea and supported Bitter Pill.

“Interdiction of illegal pharmaceuticals is one of CBP’s top priorities,” said CBP Deputy Commissioner David V. Aguilar. “The rise of Internet pharmaceutical sale sites has resulted in increases of imported packages containing illegal medications, which is a risk to U.S. consumers. CBP is proud to be a part of this effort.”

IOS is a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. Those websites are now shut down and their domain names are in the custody of the federal government. Visitors to the websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of trafficking in counterfeit goods. The 686 domain names seized during Bitter Pill bring the total number of IOS domain names seized in the last two years to 1,525. The domain names are subject to forfeiture under federal laws that afford individuals who have an interest in the seized domain names a period of time after the “Notice of Seizure” to file a petition with a federal court and additional time after the “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become property of the U.S. government.

During this project, HSI special agents made undercover purchases of counterfeit drugs from multiple websites. The counterfeit drugs seized during Bitter Pill included anti-cancer medication, antibiotics and erectile dysfunction pills as well as weight loss and food supplements. Investigations are ongoing as special agents continue to connect shipments and websites with organized criminal networks.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters. For more information on the IPR Center please visit www.IPRCenter.gov.

SOURCE: ICE

Members of Counterfeit Nike Sneaker Ring Face Up to 5 Years in Prison and $250,000 Fine

By Customs IP Enforcement, Export, Import, Intellectual Property, International Business, International IP, News

Registered Trademark of Nike

Five individuals have pleaded guilty to conspiring to import misclassified merchandise. Each faces up to five years in federal prison and a $250,000 fine. This case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

“The trademark laws in the United States were created to protect the investment of American manufacturers such as Nike as well as consumers,” said U.S. Attorney William J. Hochul Jr., Western District of New York. “These laws are designed to create a level playing field for businesses and protect consumers who might unwittingly purchase inferior counterfeit goods. Our office will continue to aggressively enforce customs laws for the benefit of American businesses and those who purchase their products.”

“Selling counterfeit goods is stealing,” said James C. Spero, special agent in charge of HSI Buffalo. “HSI is committed to ensuring the legitimate copyright holders are protected from individuals who are only motivated by greed. People and organizations which produce and sell counterfeit products undermine the U.S. economy; create inferior and sometimes dangerous products; and jeopardize public safety.”

Xiao Cheng Lin, 50, and his wife, Ling Zhen Hu, 51, both of New York, pleaded guilty before U.S. District Judge Richard J. Arcara to conspiring to import misclassified merchandise. Hu, a native of China, worked for an individual who imported thousands of pairs of sneakers from China that bore the Nike “swoosh” logo and Nike labeling, but were not genuine Nike sneakers. Hu then negotiated the sale of large quantities of the mislabeled sneakers to Malik Bazzi, 44, of Montreal, who then sold them to customers throughout the United States — including in Buffalo — via his warehouses in Manhattan and Brooklyn. Bazzi is currently scheduled to be sentenced Feb. 1, 2013. Hu admitted that she negotiated the sale of 7,500 pairs of sneakers to Bazzi.

Lin, also a native of China, worked with his wife, delivering the 7,500 pairs of sneakers to Bazzi. The HSI investigation revealed that Bazzi’s customers then sold the counterfeit Nike sneakers on the street and in retail stores to customers for about half the price of genuine Nike sneakers.

As part of their plea agreements, both Lin and Hu agreed to abandon any claim to more than $600,000 and dozens of pairs of counterfeit sneakers seized from their New York residence following their 2007 arrest.

The defendants were arrested along with 21 others. To date, 20 of the defendants have been convicted.

On Sept. 5, 2012, LaKeith Fowler, 32, of Dallas, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Fowler, one of Bazzi’s customers, purchased and sold approximately 12,000 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Fowler sold the sneakers in a retail store he owned in the Dallas-area. As part of his plea agreement, Fowler agreed to forfeit two bank accounts to the government which contain over $44,000 in deposits. The accounts were used to conduct counterfeit sneaker transactions.

On Sept. 7, 2012, Davion Briant, 37, of Milwaukee, also pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Briant, another of Bazzi’s customers, purchased and sold approximately 4,500 pairs of counterfeit Nike sneakers he obtained from Bazzi from April to September 2007. Briant owned a retail store in the Milwaukee-area where he sold the counterfeit sneakers.

On Sept. 10, 2012, Hussien Sara, 30, of New York, pleaded guilty before Judge Arcara to conspiring to traffic in counterfeit sneakers. Sara worked in Bazzi’s warehouses where, on behalf of Bazzi, he took delivery of over 13,000 pairs of counterfeit sneakers from several suppliers, including Hu and Lin. In addition, Sara assisted in packaging the sneakers for shipment to Bazzi’s customers located throughout the United States.

Lin and Hu will be sentenced Jan. 24, 2013; Fowler Dec. 14, 2012; Briant Jan. 7, 2013; and Sara Jan. 11, 2013. All will be sentenced by Judge Arcara in Buffalo.

SOURCE: ICE

PRACTICAL TIP: Top ROI for Your Legal Dollars

By Blog, Customs IP Enforcement, Export, FCPA, Foreign Trade Zones (FTZ), Grab Bag, Import, Intellectual Property, International Business, International IP, Internet / eCommerce, ITAR, News

Based on our experience, some of the best uses of resources on legal advice and assistance for businesses and entrepreneurs (from a “bang for your buck” perspective) are:

  • Succession Planning. This includes buy-sell and similar provisions in company documents to deal with death, divorces, and other departures of co-owners, and also includes an updated estate plan such as a will and advance directives to ensure your legacy.

The benefits one can obtain from these legal mechanisms and protections, which generally cost less than $2,000, can pay for themselves many times over.

 

Jim Chester Featured in July 2012 Issue of Texas Bar Journal

By Intellectual Property, International Business, International IP, News

Jim Chester, founding member of Dallas-based global business & technology law firm CHESTER pllc, was featured in the July 2012 issue of the Texas Bar Journal.  A recognized expert in international business and intellectual property law, Chester was asked to write an article discussing, “Protecting Intellectual Property in International Markets.”  In the article, he discusses the need for IP protection while suggesting actions to take when conducting business on a global scale.   The article is available for download from the Texas Bar website.

Advising clients regarding trademark, copyright, trade secret protection, licensing and enforcement in the U.S. and abroad, Chester represents clients before the U.S. Patent and Trademark Office (USPTO) and the U.S. Library of Congress (Copyright Office).  He also counsels companies on trade regulations involving customs, import and export laws which include International Traffic in Arms Regulations (ITAR) and the Foreign Corrupt Practices Act (FCPA).  Chester routinely represents clients before U.S. Customs & Border Protection U.S. Department of Commerce, U.S. Department of Defense Trade Controls, the Office of Foreign Asset Controls, the U.S. International Trade Administration, and other state, Federal and foreign governing agencies.  Chester is a licensed U.S. Customs Broker, and is admitted to practice law in Texas and Washington, D.C.

“For anyone conducting business outside of the U.S., the first stop in the protection process is to properly identify all IP assets,” Chester advises.  “Since all businesses make use of names, brands and logos (trademarks and service marks), designs, websites and software (copyright), inventions, ideas, and processes (patent and trade secrets) in some form, IP protection is essential when doing business outside the U.S.”

“Jim has a unique legal skill set combining international law with intellectual property expertise,” said Darin M. Klemchuk, a Dallas IP attorney and senior partner of Klemchuk Kubasta LLP.  “He has advised clients on business deals involving almost 100 countries, and has coordinated with foreign counsel on legal projects around the world.  Jim has also served as legal advisor to foreign companies doing business in the U.S.”

To be an effective international business and technology attorney, Chester has many years of experience in handling a broad range of domestic business matters, including entity formations, ecommerce, agreements, technology transactions, acquisitions, and other legal issues commonly faced by businesses. In addition to his work in international and IP law, Chester has been an adjunct professor of law at Baylor University Law School for more than ten years, teaching courses on International Trade Law and International Business Transactions.  He also served as an adjunct professor of Business Law at the University of Dallas for four years.

 

 

About CHESTER pllc

CHESTER pllc is a Dallas, Texas law firm providing mission-critical legal services to innovation-based companies doing business in the US, around the world, and on the web.  Its mission (and passion) is helping entrepreneurs and emerging companies solve problems and protect their interests. CHESTER pllc delivers value by providing business-savvy, cost-effective solutions to legal challenges.  The firm offers a wide array of business legal solutions, such as business entity formation (LLCs, corporations, etc.), trademarks and other intellectual property, technology transactions, contracts, ecommerce and dispute resolution.  Additional information about the firm and its attorneys may be found at www.chester-law.com

ICE seizes 70 Websites Offering Counterfeit Merchandise

By Customs IP Enforcement, Intellectual Property, Internet / eCommerce

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)-led National Intellectual Property Rights Coordination Center (IPR Center) recently seized 70 websites that were illegally selling counterfeit merchandise.

The 70 websites seized are part of Project Copy Cat, an iteration of Operation In Our Sites (IOS), and closely mimicked legitimate websites selling authentic merchandise and duped consumers into unknowingly buying counterfeit goods. Many of the websites so closely resembled the legitimate websites that it would be difficult for even the most discerning consumer to tell the difference.

The websites are now shut down and their domain names are in the custody of the federal government. Visitors to these websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of willful copyright infringement.

“This operation targeted criminals making a buck by trying to trick consumers into believing they were buying name brand products from legitimate websites when in fact they were buying counterfeits from illegal but sophisticated imposter sites located overseas,” said ICE Director John Morton. “The imposter sites were simply a fraud from start to finish and served no purpose other than to defraud and dupe unwary shoppers.”

A new twist in the websites seized in Project Copy Cat involved the appearance of Secure Sockets Layer (SSL) certificates. SSL certificates provide authentication for financial information, meaning consumers should be able to trust that they are sending information to the intended server and not to a criminal’s server. Trusted SSL providers should only issue SSL certificates to verified companies that have gone through several identity checks. In addition to providing authentication, SSL certificates also provide encryption, enhancing the security of credit card numbers, usernames, passwords and other sensitive information. These websites, however, displayed SSL certificates, further duping the consumer into thinking they were shopping on a legitimate website, potentially putting customers’ financial information at risk.

During this operation, federal law enforcement officers made undercover purchases of a host of products, including baby carriers, professional sports jerseys, language and fitness DVD sets, and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products. In most cases, the goods were shipped directly into the United States from suppliers in other countries. If the copyright holders confirmed that the purchased products were counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods were obtained from federal magistrate judges.

“Every day the U.S. economy and American jobs are negatively impacted by criminal organizations engaged in the sale of counterfeit merchandise through rogue websites. Even more importantly, consumer’s health and safety can be threatened when they unknowingly purchase counterfeit products,” said IPR Center Director Lev Kubiak. “Our goal at the IPR Center is to protect the public’s safety and economic welfare through robust intellectual property enforcement and we hope that today’s enforcement actions raise the public’s awareness to this pervasive crime.”

This operation was the next phase of IOS, a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. These 70 domain name seizures bring the total number of IOS domain names seized in the last two years to 839. This enforcement action coincides with the two-year anniversary of the 2010 launch of IOS. Since then, the seizure banner has received more than 103 million individual views.

Of the 769 previous domain names seized, 229 have now been forfeited to the U.S. government. The federal forfeiture process affords individuals who have an interest in seized domain names a period of time after a “Notice of Seizure” to file a petition with a federal court and additional time after a “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become the property of the U.S. government. Additionally, a public service announcement, launched in April 2011, is linked from the seizure banner on each of the 229 forfeited websites. This video educates the public about the economic impact of counterfeiting.

The operation was spearheaded by the IPR Center in coordination with HSI field offices in Denver, El Paso, Houston, Newark and Salt Lake City. U.S. Attorney’s Offices in the Western District of Texas, Southern District of Texas, District of New Jersey, District of Colorado and the District of Utah issued the warrants for the seizures. The IPR Center is one of the U.S. government’s key weapons in the fight against counterfeiting and piracy. The IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.

During the first phase of IOS in 2010, the IPR Center received information from the Motion Picture Association of America that a website, www.ninjavideo.net (Ninja Video), was illegally distributing pirated copies of motion pictures and other audiovisual works. Ninja Video provided its millions of visitors the ability to illegally download high quality copies of copyrighted movies including movies that were currently in theaters or not yet released.

Following the seizure of the website, search warrants were executed at the residences of the primary suspects in the United States and funds were seized from 15 separate financial accounts. To date, the Ninja Video investigation has resulted in the arrest and conviction of five of the six co-conspirators with sentences ranging from 22 months in federal prison to three years of probation with a combined restitution exceeding $470,000 to the victims. A sixth co-conspirator remains a fugitive. In addition to Ninja Video, IOS phase one also targeted eight other websites selling counterfeit merchandise in New York.

 

SOURCE:   U.S CUSTOMS & BORDER PROTECTION / IMMIGRATION & CUSTOMS ENFORCEMENT

Over $1.5 Million Seized from Online Sale of Counterfeit Sports Apparel manufactured in China

By Customs IP Enforcement, Intellectual Property, International Business, International IP

The Department of Justice seized more than $1.5 million in proceeds from the distribution of counterfeit sports apparel and jerseys, following an investigation into the sale of counterfeit goods on commercial websites conducted by the National Intellectual Property Rights Coordination Center (IPR Center), which is led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

The developments are the latest result of Operation In Our Sites, a law enforcement initiative targeting online commercial intellectual property crime announced by HSI in June 2010. Operation In Our Sites targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 761 domain names of websites used in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

“ICE will continue to target those who traffic in counterfeit goods by attacking the financial profits of counterfeiting sites and shutting them down,” said ICE Director Morton. “Operation In Our Sites and the tireless work of the National Intellectual Property Rights Coordination Center protect consumers from fraud on the Internet and combat intellectual property theft which exacts a toll on our economy and industries.”

Last month, more than $896,000 in proceeds from the sale of counterfeit sports apparel on commercial websites was seized as part of Operation In Our Sites. According to court documents, investigation by federal law enforcement officers revealed that subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement officers made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for three domain names used to sell the infringing goods were obtained from a U.S. magistrate judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using money service business accounts and then wired their proceeds to bank accounts held at a Chinese bank, the court documents state.

Pursuant to warrants issued by a U.S. district judge, law enforcement officers seized $1,455,438.72 in proceeds that had been transferred from the money service business accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese bank in the United States. Pursuant to additional seizure warrants issued by a U.S. magistrate judge, law enforcement officers also seized $94,730.12 in funds remaining in six money service business accounts used by the subjects.

“The seizures … are another step forward in our efforts to disrupt and disable those engaged in intellectual property crime,” said Assistant Attorney General Lanny A. Breuer. “By seizing the domain names and profits of online counterfeit goods operations, we are protecting consumers and sending a message to criminals that we will use every tool at our disposal to stop them.”

“Within a matter of weeks, this law enforcement operation has seized more than $2.4 million in proceeds from individuals overseas who are preying on the American economy and consumers with their sales of counterfeit goods,” said U.S. Attorney Ronald C. Machen Jr., District of Columbia. “We will continue to work with our law enforcement partners to target these unscrupulous operators where it hurts them the most – at the bank.”

Over $47 million in Counterfeit Goods Seized at Flea Market

By Customs IP Enforcement, Import, Intellectual Property, International IP

A very productive enforcement action at the end of April at the Patapsco Flea Market in Baltimore conducted by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) resulted in the agency’s largest counterfeit seizure at a flea market.

On Sunday, April 22, HSI special agents executed a federal search warrant at the Patapsco Flea Market at 1400 W. Patapsco Avenue in Baltimore as part of an ongoing criminal investigation. The enforcement operation was based on specific information developed during a two and a half year long investigation by HSI Baltimore involving violations of intellectual property rights law. Over the course of numerous days, HSI special agents, with assistance from law enforcement and industry partners, seized nearly 220,000 counterfeit items including clothing, shoes, jewelry, handbags, DVDs, CDs, perfume, make-up and other personal care items. If those items were legitimate, the total manufacturer’s suggested retail price would be approximately $47.3 million.

The HSI Baltimore investigation identified numerous vendors selling counterfeit goods with brand names such as M∙A∙C, Louis Vuitton, Gucci, Coach, Kate Spade, NFL, Nike, Dolce & Gabbana, Dooney & Bourke, Ralph Lauren Polo, Lacoste, North Face, Rocawear, Ed Hardy, Chanel, Tiffany, Timberland, Uggs, Sony, Apple, Coogi, Black Label, Under Armour and Affliction, among others. The multi-day operation also netted the seizure of approximately $1.5 million in suspected criminal proceeds.

“The illegal importation and sale of counterfeit goods is a significant problem that affects our economy, impacts American jobs and innovation, puts the public’s health and safety at risk and at times threatens our national security,” said William Winter, special agent in charge for HSI Baltimore. “Consumers should know that if they buy pirated and unlicensed products, they are hurting legitimate businesses and they may also be facilitating criminal activity.”

The following law enforcement and industry partners also participated in the operation: Maryland State Police, Baltimore Police Department, Under Armour, Estee Lauder, the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA). Blazer Investigations, representing numerous trademarked brand names, was also on site assisting with the identification of counterfeit goods.