The sale of counterfeit products can show up almost anywhere in Virginia.
These items include cigarettes, prescription drugs (such as Viagra), CDs, DVDs, clothing, personal accessories such as purses and sunglasses, jewelry, shoes and Christmas lights.
No, I’m not kidding about Christmas lights. While the brand may not be important to buyers, the cheap knockoffs pose a fire hazard.
Popular brands for counterfeiting include Nike, Vera Bradley, Coach and Yankee Candle.
The counterfeit goods business in Virginia is often tied to the drug trade, according to a special agent of the Virginia State Police who talked to me about the sale of counterfeit products in the state.
For example, if you buy a counterfeit DVD, the seller might ask you whether you want the DVD “with” or “without.” The “with” means drugs encased in the DVD.
My biggest question was whether legitimate merchants sometimes accidentally traffic in counterfeit goods or whether the sale of them is fairly limited to outlaw merchants who know they are selling counterfeits.
The special agent said merchants selling counterfeit goods are almost always doing so knowingly.
Still, it’s possible for a mom-and-pop business to make a mistake, so here are tips the special agent passed along for buying inventory:
- Ask for a copy of the distribution license for the wholesaler selling the goods. Major brands such as Nike give out such distribution licenses sparingly and only to highly qualified distributors.
It’s not against the law for a wholesaler to sell genuine branded goods without being an authorized distributor, but that status is a flag that you need to look carefully at the legitimacy of the merchandise.
- Beware of prices that are too good to be true. If a wholesaler or retailer offers a price substantially below the going rate, that’s a red flag that the goods may be counterfeit.
- Beware of the wholesaler who wants to unload “excess” branded products on the cheap. That’s another red flag.
- Beware of obscure websites offering great prices. Such websites can look polished but still be counterfeit purveyors.
These counterfeits merchants often advertise on Facebook. Call the business before placing an order. If the contact phone number goes to a cellphone, that’s a bad sign.
The criminal penalties for selling counterfeit merchandise can be substantial.
Beyond having counterfeit inventory seized by the police, the individuals selling the counterfeit merchandise can be convicted of such crimes as copyright infringement and obtaining money by false pretenses.
Selling more than $200 in counterfeit merchandise raises such crimes to the felony level. The $200 threshold is not what the counterfeit goods sold for but what the manufacturer’s suggested retail price is for the goods.
That’s a low threshold.
Counterfeit goods usually show up in small retail businesses, the special agent said. The goods often aren’t the store’s core merchandise, such as a nail salon selling DVDs or purses.
The hot place for selling items online is now yard sale groups in Facebook Marketplace, the agent said. Online commerce marketplace Poshmark is also an up-and-coming place for reselling goods.
Craigslist, the agent said, is declining in popularity for selling such counterfeit goods.
Be careful out there. As the special agent pointed out, for both retailers and consumers, if it’s too good to be true, it’s probably fake.
John B. Farmer is a lawyer with Leading-Edge Law Group PLC, which specializes in intellectual property law. He can be reached at www.leadingedgelaw.com.