Senate Bill S6681

                                BILL NUMBER:S6681

TITLE OF BILL:
An act
to amend the
penal law, in relation to the definition of a counterfeit trademark

This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of her
Advisory Committee on Criminal Law and Procedure.

This measure would amend section 165.70 of the Penal Law to add
technical precision to the definition of "counterfeit trademark."
Specifically, the definition should clarify that the term means a
spurious or imitation trademark that is used in connection with
trafficking in goods that are identical with or substantially
indistinguishable from goods bearing a legitimate trademark. The
current definition of a "counterfeit trademark" is awkward and leads
to unnecessary confusion in pleading and charging decisions.

In 1992, in response to an increase in trafficking in counterfeit
goods, New York added the crimes of "trademark counterfeiting" to the
Penal Law (L. 1992, c. 490, § 1).
The Legislature modeled the law, and the definition of counterfeit
trademark, after Federal law (see Donnino, Practice Commentary,
McKinney's Cons Laws of NY, Book 39, Penal Law §165.70; see also 18
              

USC §2320). Unfortunately, there is an ungainly difference in the New
York statute. Penal Law § 165.70(2), in part, defines a "counterfeit
trademark" as a "spurious trademark... used in connection with
trafficking in goods;
and... used in connection with the sale... of goods that are
identical with or substantially indistinguishable from a
trademark...."  Under this definition, "goods" must be
indistinguishable from a
"trademark." However, a "trademark" is not comparable with goods;
instead a trademark is used to identify particular goods (see PL,
§165.70(1)). The parallel provision in Federal law provides that
"goods" should not be
compared to a "trademark." The Federal definition makes plain that a
"counterfeit trademark" is a spurious mark "used in connection with
trafficking in any goods... that is identical with, or
substantially indistinguishable from, a mark registered on the
principal register in the United States Patent and Trademark
Office..." (18 USC §2322(e)(1)(A)(ii)). The Federal statute
therefore appropriately requires a comparison of a "spurious
mark" with a legitimate, registered "marks."

We believe that the imprecise wording of New York's definition has
practical consequences in the prosecution of cases under the current
statute, and has led to inconsistent opinions among courts. For
instance, motions to dismiss an accusatory instrument are often
claimed when a complaint undertakes to allege a difference between
the quality of the counterfeit and the genuine article without
actually comparing the marks themselves (see e.g., People v Jobe, 20
Misc 3d 1114(A) (Crim Ct, NY County 1999);
People v Ensley, 183 Misc 2d 141 (Sup Ct, NY County 1999)). Other


courts have upheld the sufficiency of complaints that identify and
distinguish the characteristics of the genuine and counterfeit
trademark (People v Guan, 2003 WL 21169478 (App Term, 1st Dept
2003)).

This measure would amend the definition of a "counterfeit trademark"
to reflect that a counterfeit trademark requires a comparison of a
spurious mark with a legitimate mark. It will clarify to
practitioners that the two marks must be "identical or substantially
indistinguishable" to come within the purview of criminal
prosecutions, and that any distinctions between the two marks are
simply elements of proof necessary to establish that the trafficked
goods are illegal copies of goods that bear legitimate marks.

This measure, which would have no meaningful fiscal impact on the
State, would take effect immediately and shall apply to all crimes
committed on or after such effective date.

LEGISLATIVE HISTORY:
None. New proposal.