Relates to trademark counterfeiting

Summary of specific provisions

Section 1 amends section 165.71 of the penal law to change trademark counterfeiting in the third degree to trademark counterfeiting in the fourth degree, and establishes that trademark counterfeiting in the fourth degree shall be a class A misdemeanor.

Section 2 amends section 165.72 of the penal law to change trademark counterfeiting in the second degree to trademark counterfeiting in the third degree. It provides that a person is guilty of trademark counterfeiting in the third degree if the retail value of all counterfeit goods manufactured, distributed, sold, or offered for sale by this person exceeds one thousand dollars or the total number of all counterfeit goods exceeds two hundred. It also establishes that trademark counterfeiting in the third degree shall be a class E felony.

Section 3 amends section 165.73 of the penal law to change trademark counterfeiting in the first degree to trademark counterfeiting in the second degree. It provides that a person is guilty of trademark counterfeiting in the third degree if the retail value of all counterfeit goods manufactured, distributed, sold, or offered for sale by this person exceeds twenty-five thousand dollars or if the total number of all counterfeit goods exceeds two thousand. It also establishes that trademark counterfeiting in the second degree shall be a class D felony.

Section 4 renumbers section 165.74 to 165.75, and adds a new section 165.74 which establishes a new definition of trademark counterfeiting in the first degree. It establishes that a person is guilty of trademark counterfeiting in the first degree if the retail value of all counterfeit goods manufactured, distributed, sold, or offered for sale by this person exceeds one hundred thousand dollars or the total number of all counterfeit goods exceeds ten thousand. It also establishes that trademark counterfeiting in the first degree shall be a class C felony.

Section 5 provides that the act shall take effect on the first of November next succeeding the date on which it shall have become law.

Justification

Trademark counterfeiting is a serious issue both in New York State and around the globe, especially when conducted on a large scale. According to a report released by the New York State White Collar Crime Task Force, "Trademark counterfeit goods may account for as much as seven percent of all world trade, or up to $650

billion in sales per year. New York City estimates that it loses more than $1 billion per year in revenue based upon the sale of counterfeit goods". The White Collar Crime Task Force report also notes that the sale of goods bearing counterfeit trademarks is a known revenue stream for many terrorist organizations, due to the fact that profit margins are higher and risks are lower than trafficking narcotics. This loss of revenue to New York state businesses and potential public safety hazard is extremely concerning, and reveals an area of law enforcement in dire need of legislative reform.

This legislation serves to rework the penalty structure for trademark counterfeiting in order to provide penalties which are more commensurate with the severity of the offense. In particular, it would make a trademark counterfeiting operation which has a total retail value exceeding one hundred thousand dollars or which produces a total number of goods exceeding ten thousand a class C felony.

Prior legislative history

New Legislation

Fiscal implications

None to the state.

Effective date

This act shall take effect on the first of November next succeeding the date on which it shall have become law.