People v. Levy, 16 N.Y.3d 509 (2011)
New York’s trademark counterfeiting statute applies even when a counterfeit mark is affixed to goods different from those for which the trademark is registered, as long as the mark identifies the product as genuine to the average consumer.
Summary
Mordekhay Levy was convicted of trademark counterfeiting for selling automotive parts with counterfeit Ford trademarks. Levy argued that the statute only applied if the counterfeit mark was used on the same type of goods for which the trademark was registered. The New York Court of Appeals disagreed, holding that the statute applies as long as the counterfeit mark identifies the product as a genuine article to the average consumer, regardless of whether the trademark is registered for that specific type of good. The court also rejected Levy’s argument regarding the lack of a “knowledge charge,” finding that the intent to evade a lawful restriction necessarily implies knowledge that the goods were fake.
Facts
Police executed search warrants at Mordekhay Levy’s auto parts business, Black & Yellow Major Auto Parts, seizing allegedly counterfeit Ford parts in 2004, 2005, and 2006. Ford also filed a trademark infringement suit against Levy, resulting in a stipulated preliminary injunction prohibiting him from selling automotive parts bearing Ford trademarks or confusingly similar marks. The seized parts, not manufactured by Ford, bore Ford trademarks or product numbers. Levy purchased and sold parts at below dealer cost. Ford’s trademark counsel testified to the validity and use of Ford’s trademarks.
Procedural History
Levy was indicted and tried for second-degree trademark counterfeiting. He moved to dismiss, arguing some parts weren’t covered by the trademark registrations. The trial court denied the motion and refused to instruct the jury that an “intent to evade a lawful restriction” required knowledge the parts were counterfeit. The jury convicted Levy. The Appellate Division affirmed. The New York Court of Appeals affirmed the Appellate Division’s order.
Issue(s)
1. Whether New York’s trademark counterfeiting statute requires that a counterfeit mark be used on the same type of goods for which the trademark is registered to constitute trademark counterfeiting.
2. Whether the trial court erred in failing to provide a “knowledge charge” to the jury, specifically instructing that the defendant must have known the goods were counterfeit to be convicted of intending to evade a lawful restriction on the sale of goods.
Holding
1. No, because New York’s trademark counterfeiting statute is not limited to instances where the counterfeit mark is used on the same goods for which the mark is registered; it applies if the mark identifies the product as a genuine article to the average consumer.
2. No, because it is impossible to intend to evade a lawful restriction on the sale or distribution of goods without knowing that those goods were fake.
Court’s Reasoning
The court stated that statutory interpretation begins with the words of the statute. New York’s trademark counterfeiting statute lacks the explicit “identity-of-goods requirement” present in the federal Trademark Counterfeiting Act. The court reasoned that the legislature’s choice not to include this requirement indicated an understanding that consumers rely on the mark itself, not on knowing the precise products for which the mark is registered. The court provided an example: “assume that Ford makes brake pads for all of its cars, but that it expressly does not place the familiar ‘Ford oval’ on those pads, and therefore does not register the ‘Ford oval’ trademark for that purpose. If a counterfeiter places the ‘Ford oval’ on brake pads, the use of that mark nevertheless ‘identifies’ the good as a genuine Ford product.” Regarding the lack of a “knowledge charge”, the court found it would be impossible to “intend to evade a lawful restriction” on the sale or distribution of goods without knowing that those goods were fake. The court cited People v Samuels, 99 NY2d 20, 25-26 (2002), noting that jurors are presumed to have sufficient intelligence to make elementary logical inferences. The court determined that ample evidence existed for a rational juror to find that Levy intended to evade a lawful restriction, considering the multiple searches, Ford representatives’ visits, and the preliminary injunction.