Tuesday, April 24, 2012

Counterfeit Goods Convictions Affirmed

US v. Lam: Lam and his codefendant, Chan, "owned or otherwise controlled" at least 10 companies that imported handbag and wallets into the United States.  Some of them were allegedly counterfeit.  After a seizure of goods in Norfolk in 2005, Lam and Chan were charged with conspiracy to traffic in counterfeit goods, trafficking, and smuggling, based on purses that bore markings and logos similar to those on products made by Burberry.  At trial, the main issue was whether the marks on the seized bags were "identical or substantially indistinguishable from" the Burberry marks.  After the district court denied their pretrial motion to have "substantially indistinguishable" declared unconstitutionally vague, Lam and Chan were convicted after a jury trial of conspiracy, trafficking, and smuggling (although not with regards to all the alleged fraudulent goods).  The verdict was "based, in part, on [the jury's] determination that the plaid displayed on the goods seized . . . was a counterfeit of the Burberry Check mark."

Lam and Chan raised several issues on appeal, all of which the Fourth Circuit rejected.  First, they argued that there was insufficient evidence to support their convictions.  The court concluded otherwise, holding that the fact that the seized goods included plaid mark with a knight imposed upon it could be found sufficiently similar to good with just a plaid mark (adding that those, in some cases, had an equestrian mark superimposed on them) and noting that counterfeit goods are not required to be exact matches of the products they are copying.  Second, the court rejected their argument that the jury plainly erred in instructing the jury about what it could consider when determining if the goods were counterfeit.  Third, the court concluded that "substantially indistinguishable" was "sufficiently clear to allow an ordinary person to understand what conduct it punishes" and was therefore not unconstitutionally vague, as all other circuits to deal with the issue also concluded.  Finally, Lam and Chan argued that they were entitled to a new trial (which the district court erred by not giving them) due to comments by the prosecution during trial that misstated the "perspective the jury should use" when determining if the goods were counterfeit, relying on a "average person on the street" view rather than the jurors' own judgment.  The court concluded that it was not an abuse of discretion for the district court to conclude that its instructions cured any problems raised by the Government's statements.

Judge Floyd dissented, arguing that the Government's comments about the "average person on the street" perspective were not overcome by the district court's instructions, noting that the Government "misstated the legal standard governing the key issue" eight times, six times after the first of the defense's four objections.

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