in civil litigation and, on the other hand, be insulated from criminal prosecution with respect to that information.

That is my understanding, and I have no firsthand knowledge that it is occurring, and I don't know if it is available in other circuits. But because of that concern, and because I recognize the criminal penalties are probably the only answer, I believe that the civil side has to be strengthened to justify the potential inhibition of discovery.

Thank you. I will be willing to entertain any questions. [The statement of Mr. Wallen follows:)

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tiffs in counterfeiting actions brought against at least one hundred

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review of the actual experience of counsel in counterfeiting actions

is fundamental to understanding the benefits and/or drawbacks of the

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discontinuance of the counterfeiting activity; (2) to obtain a Court

award or settlement payment of damages, investigative expenses and

attorneys' fees in an

amount sufficient to both deter the defendant

and allow plaintiff to recoup its litigating costs; and (3) when the

defendant is a

mere seller, to ascertain the identity of the


of the counterfeit goods.

With respect to the first concern of stopping the counter

feiting activity, plaintiff trademark owners have enjoyed regular and



under existing law.

During the past


years, courts have regularly granted temporary restraining orders and

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seizure order has proved to be an important remedy for plaintiffs in

the counterfeiting area.

First, it has become apparent that many of

the defendants who deal in counterfeit goods have been unwilling to

obey a

mere temporary restraining order.

Accordingly, these defen

dants, after being served with a temporary restraining order, will in

some fashion dispose of their inventory of goods before a hearing on

a preliminary injunction or any discovery can be taken.

The issuance

of seizure orders has been successful in preventing these defendants

from such

an improper disposition of

the merchandise.


seizure orders have proven to be an important coercive weapon against


Since many of the defendants are either effectively

judgment-proof (for lack of identifiable assets)

or because of lack

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impossible, a seizure of a substantial quantity of goods is sometimes

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In most


the counterfeiting defendants maintain no

written records reflecting their purchase and resale of counterfeit transactions in the goods.

merchandise; therefore, it is virtually impossible to prove up the

defendant's sales for the purposes of computing damages or profits.

In a relatively few instances, defendants have admitted at

least modest sales amounting to a few thousand dollars of counterfeit

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connection with a combined seizure order which permitted seizure of

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In actions brought against a distributor or

a retailer,

plaintiffs have been successful in obtaining an identification of the

source of the goods only approximately fifty percent (50%) of the


In the remaining instances, the defendant has

either lied

about the identity or simply did not know the identity, and has

stated merely that the seller was a transient of unknown identity and

was paid cash for the goods.

37-811 O

85 - 8

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