The issue presented here can be stated in rather basic terms: when does a low-end, cheaply-made handbag merely look like a high-end, famous-name handbag and when does it actually appropriate the famous-name trademark? The distinction is critical, because while it is perfectly legal to sell merchandise that copies the design and style of a product often referred to as "knock-offs" it is against the law to sell goods that bear a counterfeit trademark.

The two defendants whose cases have been consolidated for decision here are each charged in a separate information with the crime of Trademark Counterfeiting in the Third Degree, in violation of Penal Law (P.L.) section 165.71. Both defendants are accused of selling counterfeit handbags. Mr. Rosenthal is alleged to have sold counterfeit "Burberry" bags at "the corner of Prince and Greene Streets"; Mr. Ndiouck is alleged to have sold counterfeit "Coach" bags at Sixth Avenue and 56th Street.

On almost identical papers, each defendant moves to dismiss the misdemeanor information filed against him. Each of them argues that although the accusatory instrument describes in great detail how the copy can be told apart from the genuine article, it fails to allege sufficient facts to support a finding that the copy was bearing a counterfeit trademark. The People respond in each instance by stating that the information is sufficient by simply identifying by name the trademark in question: "Burberry, Ltd." in the case of Mr. Rosenthal, and "Coach, Inc." in the case of Mr. Ndiouck.

A person is guilty of Trademark Counterfeiting in the Third Degree when, "with the intent to deceive ... or to evade a lawful restriction on the ... offering for sale of goods, he or she sells or offers for sale goods which bear a counterfeit trademark." P.L. §165.71. A "trademark" is defined under the Penal Law as "any word, name, symbol, or device, or any combination thereof, adopted and used by a person to identify goods made by a person and which distinguish them from those manufactured or sold by others and which is registered ... under the laws of this state or is registered in the principal register of the United States patent and trademark office." [*2]P.L. §165.70(1). The term "counterfeit trademark" is defined as a "spurious trademark or an imitation of a trademark that is ...identical with or substantially indistinguishable from a trademark." P.L. §165.70(2).

Trademark Counterfeiting in the Third Degree is an "A" misdemeanor, meaning that it is punishable by up to one year in jail. It is one of the most frequently charged "A" misdemeanors in New York County. It may also be the "A" misdemeanor most often encountered and perhaps openly embraced by law-abiding citizens. A person walking through the streets near the courthouse at 100 Centre Street will find numerous novelty stores and street vendors displaying a vast array of inexpensive pocketbooks, sunglasses, hats, watches and perfume much of which bears the labels, logos and insignias associated with higher-priced "designer" goods. Even The New York Times, in an article in the Travel Section of May 12, 2002, entitled "Heading Downtown for Bargains," mentioned the availability of consumer goods of questionable origin as one of the area's leading attractions to visitors. Illustrating the point, the article featured a picture of look-alike "Louis Vuitton " handbags, complete with the trademarked LV symbol, displayed in front of a store on Canal Street.

This raises the question of who is really being harmed by trademark counterfeiting. There may indeed be the occasional tourist who actually believes that he is buying a genuine Rolex for $20 from a man selling watches out of a briefcase in Battery Park. One can safely assume, however, that such naivete is the exception rather than the rule. Instead, the purchaser of counterfeit merchandise is more likely to be a savvy suburbanite picking up a faux "Kate Spade " bag for her daughter, and paying extra for one that looks slightly more "authentic" because it has a bogus sewn-on label.

The customer, it would seem, is every bit as aware of the deception as the vendor. People buy copies be they "knock-offs" or actual "trademark counterfeits" because they offer a way to own merchandise that has some of the look and some of the cachet of premium goods without paying premium prices. In a sense, it provides a low-budget entree to the world of Ralph Lauren via a fake Polo cableknit sweater or to that of Donna Karan via a pair of counterfeit DKNY jeans.

The people who are really harmed by trademark counterfeiting are the manufacturers and designers whose trademarks are being wrongfully appropriated. A trademark is a valuable commodity in and of itself. It signifies a certain standard of quality, an identifiable image even a vision of a particular lifestyle. And it prompts consumers to buy a particular brand in everything from computers to vodka to wallets. When consumers buy goods bearing a counterfeit trademark, the money goes to the counterfeiter capitalizing on the trademark rather than to the trademark's rightful owner. Thus, trademark counterfeiting is nothing short of theft.

Not only does the unauthorized and uncompensated use of a trademark result in a loss of revenue, but it damages the trademark itself. A company like Movado makes very expensive, very accurate watches. The last thing it wants is people selling cheap counterfeits bearing its trademark, especially when the hands on the watches start going counter-clockwise within a week of their purchase.

It is clear that it is the trademark itself the registered word, name, symbol or device that is protected by the trademark counterfeiting statute. See People v. Ensley, 183 Misc 2d 141 (Crim. Ct., New York County 1999); People v. Niang, 160 Misc 2d 500 (Crim. Ct., New York [*3]County 1994); People v. Cisse, 171 Misc 2d 185 (Crim. Ct., Queens County 1996). Thus, goods that copy a famous-name product can be legally offered for sale so long as they do not bear a mark that is "identical with or substantially indistinguishable" from the registered trademark.

This means that I am free to sell big, puffy, baffled down jackets the kind formerly associated with expeditions bound for the Himalayas, but now highly visible on the streets of New York so long as I do not try to enhance my jackets' marketability by adorning them with the Northface logo. Similarly, I can offer for sale the latest, sporty wrap-around sunglasses. If, however, I attach a label falsely indicating them to be made by Oakley , then I am engaging in trademark counterfeiting. And in a somewhat different vein, and assuming that I have the appropriate license to sell food, it is perfectly legal for me to sell a hamburger consisting of two-all-beef-patties, special sauce, cheese, onions, lettuce on a sesame seed bun. Should I choose, however, to package it as a Big Mac , I will not only incur the wrath of McDonald's , but I will have run afoul of Penal Law section 165.71.

Returning now to Mr. Rosenthal and Mr. Ndiouck, neither of them seems to dispute that the handbags each is alleged to have been selling were in fact made to look like those of the famous-name manufacturer. The issue then is whether the information charging Mr. Rosenthal with trademark counterfeiting sufficiently alleges his handbags had a counterfeit Burberry trademark and whether the information charging Mr. Ndiouck with the same crime sufficiently alleges that his handbags had a counterfeit Coach trademark. It is well established that a misdemeanor information is only facially sufficient when it sets forth non-conclusory factual allegations providing reasonable cause to believe the defendant committed the offense charged and that the facts alleged establish, if true, every element of that offense. C.P.L. §§100.15, 100.40; People v. Dumas, 68 NY2d 729 (1986); People v. Casey, 95 NY2d 354 (2000).

In order to assess the sufficiency of the allegations that each defendant's handbags carried a false trademark, it is necessary to identify the legitimate trademark at issue. The supporting affidavits from an industry representative, along with the web-sites maintained by each company, reveal that Burberry, Ltd. has three registered trademarks, while Coach, Inc. has four.

Burberry's registered trademarks are "Burberry," the "Burberry Check," and the "Equestrian Knight Insignia." The name "Burberry" constitutes a trademarked name. The "Burberry Check" is a trademarked symbol, in this case the distinct plaid pattern that lines its famous raincoats and seems to be the design of choice for scarves this winter. The "Equestrian Knight" is also a trademarked symbol, this time a logo of a rider on horseback bearing a lance.

By way of research for this decision, the court took the opportunity to examine a genuine Burberry handbag that was purchased at the Burberry retail store on Fifth Avenue. The bag was sturdy, well-sewn and seemed to be of the highest quality. Not only did it proclaim its pedigree by displaying the signature plaid, but sewn inside was a label reading "Burberry."

The four trademarks that have been registered by Coach, Inc. are the name "Coach," the "Coach Tag," the "Coach Lozenge," and the "Coach Signature C Design." The Coach web-site prominently depicts each of its trademarks.

The court is in possession of and thus well acquainted with a Coach briefcase. The stitching is perfect, the clasp well-fitting and the leather still fine and supple after all these years. Embossed on that leather is the aforesaid "Coach Lozenge" a rectangular figure containing the word "Coach." And in case there is any doubt as to the briefcase's identity, the words "This is a [*4]Coach bag" are printed on a flap inside it.

Each of the accusatory instruments here does an admirable job in describing the defects and deficiencies such as "cheap plastic" and "crooked stitching" which demonstrate that the handbags being sold were not genuine "Coach" or "Burberry" bags. The problem is that neither information states let alone describes the specific trademark the handbags were allegedly bearing and which made them counterfeit. There is no indication that the trademarked names of "Coach" or "Burberry" appeared anywhere on the goods in question. Nor is there any indication that the bags bore any of the other registered trademarks such as the "Burberry check" or the "Coach Lozenge." Instead each complaint makes a general assertion and conclusory allegation that the bags bore a counterfeit trademark belonging to the entities that own the trademarks, "Burberry, Ltd." in the case of Mr. Rosenthal and "Coach, Inc." in the case of Mr. Ndiouck. Conclusory allegations such as these are insufficient and render the accusatory instrument defective. Dumas, 68 NY2d 729.

It is noted that each information contains a pre-printed supporting deposition form where the arresting officer describes how the alleged counterfeit goods differ in appearance from the genuine article. In order to survive a challenge for facial sufficiency, however, the deponent must also state or describe the specific trademark which is allegedly carried by the counterfeit goods. See Ensley, 183 Misc 2d 141; Niang, 160 Misc 2d 500; Cisse, 171 Misc 2d 185; People v. Johnson, N.Y.L.J., 8/10/98, p.30, col.2 (Crim. Ct., Bronx County).

Based on the foregoing, the court concludes that each information fails to establish a prima facie case that the defendant was selling goods bearing a counterfeit trademark. Accordingly, each defendant's motion to dismiss on the grounds of facial insufficiency is granted.

The People have leave to re-file the charges consistent with Criminal Procedure Law sections 170.30 and 30.30.

This constitutes the decision and order of the court.

Dated:March 4, 2003

New York, New York

____________________________

MATTHEW F. COOPER

J.C.C.