New Law Against Fakes in N.Y. in Works

Susan Scafidi in Women's Wear Daily, April 08, 2013

NEW YORK - The battle against the proliferation of counterfeits on the streets of New York could be getting a strong new tool this year.

Councilwoman Margaret Chin is making a renewed push to get a bill passed, which she first introduced in 2011, that would make it a crime to buy those fake Rolex watches, Prada handbags or a range of other counterfeit products found regularly on streets around the city, and especially in her district, which includes Chinatown. Under the proposed legislation, a person or group would be charged with a class A misdemeanor if they knew or should have known "such trademark is counterfeit for reasons including but not limited to, the quality and price of the purchased item, and/or the condition of the seller and the sale location."

The bill would impose a maximum $1,000 fine and up to a year in prison for the purchase of the illegal merchandise.

A spokeswoman for Chin noted that contrary to what some might think, it is currently not illegal to purchase counterfeit merchandise, althought it is unlawful to manufacture or sell such merchandise that carries an unauthorized logo or somehow alters the logo or trademark of a company. She noted that there are New York state commercial laws regarding illegal purchase of trademarks or logos, but they are difficult to enforce and don't apply to the consumer level.

"Councilman Peter Vallone [Jr.], who is chairman of the Council's Public Safety Committee, has given the go-ahead for a public hearing on the bill and we are waiting for a date, which we expect in the next couple of months," Chin's spokeswoman said.

She said once a measure gets a public hearing, it increases the chances of it coming up for a full vote on the council. The councilwoman, a Democrat representing District 1, feels this bill is important to protect the public against buying illegal merchandise, but also as a quality of life issue to protect neighborhoods against being overtaken by criminal elements and people feeling unsafe on the streets.

Susan Scafidi, director of the Fashion Law Institute at Fordham University School of Law, said, "As long as some consumers consider fakes fashionable, counterfeiters will make them available. The proposed law, by joining France and Italy in targeting the demande side of the sales equation, could change the calculus for some would-be customers. A $25 designer handbag can sound like a steal, but add in a $1,000 fine and the bargain becomes a bust. And while the adventure of buying a fake from an unmarked van or secret back room is an attraction for some tourists, no one wants to spend her vacation at the police station. Kudos to the councilwoman for trying once again to dredge Canal Street."

Federal officials made 7,800 seizures of counterfeit apparel valued at $133 million in fiscal year 2012. The number of counterfeit apparel seizures was down slightly from 8,094 valued at $142.3 million in fiscal year 2011, according to the report by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement's Homeland Security Investigations. Counterfeit-apparel seizures represented 11 percent of the total value of $1.26 billion seized in the fiscal year.

Customs and ICE officials seized $511.2 million worth of bogus handbags and wallets in the fiscal year, representing 40 percent of the overall seizures by value, and $186.9 million worth of counterfeit watches and jewelry, representing 15 percent of the total value. Seizures of bogus footwear were valued at $103.3 million, representing 8 percent of the total value. China continued to be the number-one source of counterfeit and pirated goods seized, accounting for 72 percent, or $906 million of the value seized.

In a separate operation targetting counterfeit Web sites, federal officials seized 22,848 shipments and took down 697 sites involved in trafficking counterfeit goods last year.