Wednesday, December 27 2006
Altadis U.S.A. Pleased With Outcomes
Ft. Lauderdale, FL - Altadis U.S.A. recently recorded two important victories in its ongoing efforts to halt cigar counterfeiting: a guilty verdict and sentencing for Juan Penton and a guilty plea by Miguel Guerra.
Juan Penton, who was charged with counterfeiting by federal prosecutors, and who was convicted by a Miami jury, was sentenced by a federal trial court judge last week to five months of house arrest, followed by five years of probation, and a $7,500 fine.
In determining Penton's sentence, the trial judge had to decide whether or not to take into consideration the thousands of empty boxes that were in Penton's possession at the time of his arrest. The trial judge concluded that, under the law as it was in effect at the time of Penton's arrest, Penton's sentence could only be based upon the 60 full boxes of counterfeit cigars that Miami Dade Police Department had caught Penton selling for $3,000.1
Significantly, the trial judge did not merely give Penton probation, but rather, sentenced Penton to five months house arrest followed by five years probation. Furthermore, the trial judge's comments in open court made clear that in doing so he intended to send a message to anyone who thinks that he or she can ignore the anticounterfeiting statute and engage in counterfeiting with impunity. (Had Penton been arrested after March, '06, the five plus years of incarceration which had been sought by the prosecutor would have been an appropriate sentence under the "sentencing guidelines.")
Counterfeiters have for years believed that they can proceed with their illegal activities and, if caught, avoid civil liability by means of sham companies and avoid any real criminal sanctions because of the leniency accorded them under state law (such as Florida).
The clear message that has now been sent to counterfeiters by the Penton case is that:
(i) they will be caught by law enforcement agencies;
(ii) they will be indicted by federal grand juries;
(iii) they will be prosecuted by federal prosecutors;
(iv) they will be convicted by juries (even in South Florida); and
(v) they will not just be put on probation, but rather, they will be sentenced to
incarceration by federal judges.
(1.The federal anti-counterfeiting law as it was in effect at the time of Penton's arrest had a "loophole." Specifically, the law did NOT make it a crime to be in possession of counterfeit packaging materials. As a result, the courts, including the judges of the 11th Circuit Court of Appeals who oversee federal trial judges in Miami, had interpreted the federal anti-counterfeiting law as holding that defendants could only be charged as "counterfeiters" if they were selling counterfeit "GOODS" - i.e., full boxes of cigars. It was because of this "loophole" in the law that Congress passed the amendment to the federal anti-counterfeiting law in March '06.)
Miguel Guerra was arrested at the same time as Penton and his case was scheduled to go to trial after Penton. However, after the jury returned a guilty verdict against Penton, Guerra pled guilty to two counts of criminal counterfeiting. Guerra obviously realized that, like Penton, he would be found guilty. Accordingly, Guerra pled guilty in order to get a reduced sentence under federal sentencing guidelines because of his willingness to admit guilt without trial.
These cases are but two in a series of actions that have taken place as part of an ongoing aggressive campaign by federal, state and local officials to put a halt to cigar counterfeiting. These cases will send an important message to counterfeiters: counterfeiting will not be tolerated. It reconfirms the message Altadis U.S.A. has been conveying to those who produce, distribute and/or sell so-called "Cuban replica" cigars:
Any unauthorized use of Altadis U.S.A.'s trademarks is illegal. Labeling cigars " Habana" or calling them "Cuban replicas" does not make them legal. Individuals who participate in the manufacture, distribution or sale of "Cuban replica" cigars will be held personally liable for their counterfeiting activities.
"These are important victories for Altadis U.S.A., its distributors and consumers, as well as the entire industry," said Theo Folz, President and CEO of Altadis U.S.A. "Altadis U.S.A. remains committed to ensuring that Altadis U.S.A.s trademarks are only associated with the cigars it produces under the high standards of quality for which they are known. In todays competitive world, protecting brand names and trade designs is critical, particularly those that have established a loyal following like Montecristo and our other famous brands."
Altadis U.S.A. is strongly committed to the vigorous enforcement of its trademark rights and will seek criminal prosecution of anyone who would violate those rights. Altadis U.S.A. continues to work with state and federal law enforcement officials to use anti-counterfeiting laws to secure convictions of counterfeiters of our brands.
If we learn that any importer, distributor, retailer or other member of the Trade is dealing in counterfeit cigars or cigar packaging, we will proceed against the offender aggressively through civil and/or criminal channels. In addition to criminal prosecution, in appropriate cases, we will invoke the civil provision of the federal trademark law that allows courts to award trademark owners like Altadis U.S.A. up to $1 million in statutory (non-compensatory) damages per counterfeited mark, as well as their attorneys fees. We have been awarded damages and attorneys fees of $1 million to $2.25 million in such cases. Altadis U.S.A. also continues to work successfully with U.S. Customs to arrange for the seizure and destruction of shipments of counterfeit cigars and packaging materials. Members of the Trade who have paid for cigars that turn out to be counterfeits and are thus seized by U.S. Customs should be aware that in such circumstances they will find themselves without recourse - counterfeiters do not refund monies nor are they in a position to make good with legitimate product with the quality and prestige of Altadis U.S.A.'s brands.
Altadis U.S.A.'s brands include, among others: Montecristo, H. Upmann, Romeo y Julieta, Trinidad, Don Diego, Santa Damiana, Cabanas, Por Larrañaga, La Corona, Saint Luis Rey and Quintero. We caution the Trade against engaging in illegal activity in violation of our rights in any of our brands and ask you to inform us immediately if you receive a solicitation for products that violate our rights. œ
