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Counterfeiting vs. Infringement: Second Circuit Weighs In
The Lanham Act protects trademarks by providing mark holders with remedies for the unauthorized use of registered marks and by providing heightened statutory penalties in cases involving counterfeit marks. Recently, in Tiffany and Co. v. Costco Wholesale, 971 F.3d 74 (2d Cir. 2020), the U.S. Court of Appeals for the Second Circuit provided guidance as to the circumstances that may give rise to liability for counterfeiting, as distinct from mere infringement. And in Omega SA v. 375 Canal, 984 F.3d 244 (2d Cir. 2021), the Second Circuit addressed liability for contributory infringement for counterfeiting.
The Lanham Act
The Lanham Act provides trademark holders with remedies for the unauthorized use of any "reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with" the sale or offer for sale "of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. §1114(a).
Under the Lanham Act, a counterfeit mark is "is a spurious designation that is identical with, or substantially indistinguishable from," a registered mark. Id. §§1116(d)(1)(B)(ii), 1127. The Act provides heightened statutory penalties for counterfeiting. Instead of the profits and damages available for infringement under §1117(a), in counterfeiting cases a mark holder may elect to recover, "an award of statutory damages … not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed." Id. §1117(c)(1).
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