NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3946
SPONSOR: Quart TITLE OF BILL: An act to amend the penal law, in relation to trade-
mark counterfeiting
PURPOSE OR GENERAL IDEA OF BILL:
Establishes a new crime of trademark counterfeiting in the fourth
degree, and amends the definition and penalty structure for the existing
three degrees of trademark counterfeiting. The bill's main aim is to
impose a harsher penalty for those who commit trademark counterfeiting
in a value in excess of ten thousand dollars.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 165.71 of the penal law to change trademark
counterfeiting in the third degree to trademark counterfeiting in the
fourth degree, and establishes that trademark counterfeiting in the
fourth degree shall be a class A misdemeanor.
Section 2 amends section 165.72 of the penal law to change trademark
counterfeiting in the second degree to trademark counterfeiting in the
third degree. It provides that a person is guilty of trademark counter-
feiting in the third degree if the retail value of all counterfeit goods
manufactured, distributed, sold, or offered for sale by this person
exceeds one thousand dollars or the total number of all counterfeit
goods exceeds two hundred. It also establishes that trademark counter-
feiting in the third degree shall be a class E felony.
Section 3 amends section 165.73 of the penal law to change trademark
counterfeiting in the first degree to trademark counterfeiting in the
second degree. It provides that a person is guilty of trademark counter-
feiting in the third degree if the retail value of all counterfeit goods
manufactured, distributed, sold, or offered for sale by this person
exceeds twenty-five thousand dollars or if the total number of all coun-
terfeit goods exceeds two thousand. It also establishes that trademark
counterfeiting in the second degree shall be a class D felony.
Section 4 renumbers section 165.74 to 165.75, and adds a new section
165.64 which establishes a new definition of trademark counterfeiting in
the first degree. It establishes that a person is guilty of trademark
counterfeiting in the first degree if the retail value of all counter-
feit goods manufactured, distributed, sold, or offered for sale by this
person exceeds one hundred thousand dollars or the total number of all
counterfeit goods exceeds then thousand. It also establishes that trade-
mark counterfeiting in the first degree shall be a class C felony.
Section 5 provides that the act shall take effect on the first of Novem-
ber next succeeding the date on which hit shall have become law.
JUSTIFICATION:
Trademark counterfeiting is a serious issue both in New York State and
around the globe, especially when conducted on a large scale. According
to a report released by the New York State White Collar Crime Task
Force, "Trademark counterfeit goods may account for as much as seven
percent of all world trade, or up to $650 billion in sales per year. New
York City estimates that it loses more than $1 billion per year in
revenue based upon the sale of counterfeit goods." The white Collar
Crime Task Force report also notes that the sale of goods bearing coun-
terfeit trademarks is a known revenue stream for many terrorist organ-
izations, due to the fact that profit margins are higher and risks are
lower than trafficking narcotics. This loss of revenue to New York
state businesses and potential public safety hazard is extremely
concerning, and reveals an area of law enforcement in dire need of
legislative reform.
This legislation serves to rework the penalty structure for trademark
counterfeiting in order to provide penalties which are more commensurate
with the severity of the offense. In particular, it would make a trade-
mark counterfeiting operation which has a total retail value exceeding
one hundred thousand dollars or which produces a total number of goods
exceeding ten thousand, a class C felony.
PRIOR LEGISLATIVE HISTORY:
2016: A10642 referred to Codes
FISCAL IMPLICATIONS:
None to the state.
EFFECTIVE DATE:
This act shall take effect on the first of November next succeeding the
date on which it shall have become law.
