A common myth is that it is illegal to purchase and use counterfeit goods. There have been at least a few urban legends of tourists being seized at U.S. customs for carrying fake Gucci handbags. In reality, it is not illegal to purchase counterfeit items for personal use in most countries.[1] If you happen to own a fake Hermes scarf, you don’t have to worry about the FBI busting down your door to seize it, or being arrested on your way through customs. Having one of each category of fakes on your way through U.S. customs is acceptable, so long as you aren’t traveling with an abundance of counterfeit goods, and don’t seem like you are planning on selling them (in which case they will likely be confiscated).[2]
Breaking the law.
In general, laws against counterfeit items apply to the supply side, and not the demand side.[3] However, there are two notable exceptions in the homeland of high fashion; France and Italy penalizes buyers as well as sellers. If you’re on vacation in Paris, buying a fake Chanel bag could land you a € 300,000 fine and up two three years in jail.[4] However, there are plenty of reasons to not partake in the counterfeit market, outside of France and Italy, even if it may not be illegal.
Counterfeit, or just a dupe?
Under federal law, counterfeit goods are defined as items that bear protected trademarks that are “identical with or substantially indistinguishable from” the genuine mark.[5] Inherent in the act of counterfeiting is the intent to produce an item that will deceive consumers into believing it is the real thing. Producing counterfeit items is a form of trademark and intellectual property infringement, which is why the “mark” (logo or trademark) is so important. For example, there is a difference between items that are truly counterfeit, and items we colloquially refer to as “dupes.” If a company sells a trench coat that is similar to a Burberry coat, it would simply be a dupe. However, if the trench coat was made with Burberry logos, and passed off as a genuine Burberry coat, that would be considered counterfeit.
Hidden costs of purchasing counterfeit.
If you happen to come across that fake Burberry coat at a U.S. flea market, it wouldn’t be illegal to buy it for personal use, but that doesn’t mean it’s a good idea to do so. Counterfeit items are sustained by the black market and are made in unsafe conditions that harm both consumers and producers. Because they are illegal to produce, there is no regulatory oversite. They are often made using child-labor and can be hazardous to consumers (counterfeit toys have been found to contain unsafe levels of various toxic compounds that can cause, amongst other things, cancer and vomiting[6]). They do not have to undergo rigorous testing to ensure consumer safety. Furthermore, by buying counterfeit items, you are supporting illegal activity and creating a demand for illegal items.
The Commission on the Theft of American Intellectual Property estimated in 2017 that the annual cost of intellectual property theft to the U.S. economy is between $225 and $600 billion per year.[7] So in addition to being unsafe, it damages U.S. businesses, and by extension the U.S. economy. IP theft and trademark infringement have the additional threat of pricing the original, high-quality products out of the market.[8] This should be of concern to everyone, not just the companies, because in the U.S., IP-intensive industries directly and indirectly support 30% of all employment, and contribute substantially to the GDP.[9] Only with strong trademark and intellectual property laws, and knowledgeable consumers, can the value that comes from these IP and trademark heavy industries be sustained.
Go with the dupe.
While it may not be directly illegal for one to buy a fake Chanel bag on a trip to New York, the aggregate of these consumer decisions can lead to larger legal and economic problems. At Morris Law Center, we suggest you steer clear of counterfeit goods. Besides, you can never truly know how that counterfeit item was made, or whether it is safe to use. On the other hand, when you come across a dupe at fast fashion stores like H&M or Zara, go for it!
At Morris Law Center, we love answering questions about intellectual property, so if you have anything you’d like to discuss, contact us and let us know your thoughts!
[1] 18 U.S.C. § 2318, subsection 2320(d)
[2] Schultz, Jennifer Saranow. The Legality of Buying Knockoffs. (October 28, 2012). The New York Times. Retrieved from https://bucks.blogs.nytimes.com/2010/10/28/the-legality-of-buying-knockoffs/.
[3] Id.
[4] Tourists warned over fake goods. (August 22, 2009). BBC News. Retrieved from http://news.bbc.co.uk/2/hi/uk_news/8215519.stm.
[5] 18 USC § 2320(f)(1)
[6] Hickey, Shane. Whether you’re unaware or don’t care, counterfeit goods pose a serious threat. (December, 2018). The Guardian. Retrieved from https://www.theguardian.com/technology/2018/dec/02/whether-youre-unaware-or-dont-care-counterfeit-goods-pose-a-serious-threat.
[7] The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy. (2017). The Commission on the Theft of American Intellectual property by the National Bureau of Asian Research.
[8] Counterfeit Products. (2010) United Nations Office on Drugs and Crime.
[9]Lee, Michelle K, and Antonipillai, Justin. Intellectual Property and the U.S. Economy: 2016 Update. (2016). United States Patent and Trademark Office.