Counterfeits: Beyond the Knock-Off

Counterfeiting is an enormous problem for businesses, consumers and law enforcement. The federal government estimates that counterfeit goods account for approximately $500 billion in sales each year, or roughly 7 percent of global trade, and cost the United States an estimated $200 billion each year. In addition to the monetary impact, deficient counterfeit pharmaceuticals, nutritional supplements and industrial equipment can cause serious personal harm. Trafficking in counterfeit goods is an old problem, but Congress, the courts and litigants are increasingly thinking outside the box to bring new solutions to the problem by expanding upon traditional notions of what is “counterfeiting” and by giving civil and criminal enforcement new weapons and remedies to combat this growing problem.

In March, Congress enacted the Stop Counterfeiting in Manufactured Goods Act (SCMGA). Congress, in enacting this landmark legislation, sought to update criminal counterfeiting laws and put more bite into enforcement actions by expanding the scope of actions deemed illegal and adding several new remedies, including destruction of the property used to produce the counterfeit products and restitution to the injured mark owner.