U.S.A v. Lam
| Decision Date | 14 December 2010 |
| Docket Number | Action No. 3:07-CR-374 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | UNITED STATES OF AMERICA v. CHONG LAM, et al., Defendants. |
THIS MATTER is before the Court on Defendants' Post-Trial Motion Pursuant to Rules 29(c) and 33 of the Federal Rules of Criminal Procedure (Doc. No. 313) and Defendants' Motion to Dismiss or for a New Trial for Prosecutorial Misconduct and Supplemental Argument in Support of Defendants' Motion for a New Trial Pursuant to Rule 33 (Doc. No. 346). The parties appeared before the Court on November 4, 2010, to present oral arguments. For the reasons stated below, Defendants' Motions are DENIED.
Defendants Chong Lam ("Lam") and Siu Yung Chan ("Chan") were the owners and officers of several companies that produced and imported non-infringing, infringing, and counterfeit luxury goods, including wallets and handbags, into the United States. Defendants' companies were actually corporations used to thwart port authorities' attempts to identify and confiscate counterfeit or infringing products. Lam and Chan employed Defendant Eric Yuen ("Yuen") in several of their corporations.
Between 2002 and 2005, agents with United States Customs and Border Protection ("CBP") seized myriad containers of handbags and wallets imported from China. The items were imported into various ports throughout the United States and CBP agents seized Defendants' merchandise from ports in Houston, Texas, Newark, New Jersey, Los Angeles, California, New York, New York, and Norfolk, Virginia. After each seizure, CBP agents issued seizure notices to Defendants' various corporations informing them that CBP seized the goods because they potentially violated United States trademark laws.
A subsequent investigation revealed that Defendants imported into the United States more than 300, 000 handbags and wallets in the names of different companies, including Global Import, Inc., Marco Leather Goods, Ltd., Marco USA Inc., The Perfect Impressions, Inc., LY (USA), Inc., CP (USA) Inc., and Coco USA. Whenever CBP agents would identify one corporation as an importer of counterfeit goods, Defendants would continue to import goods into the same port, but under a different corporate name. If Defendants believed CBP agents could identify them as responsible for importing counterfeit goods into a port, they would ship the goods to a different port.
A federal grand jury sitting in Richmond, Virginia returned a seven-count Superseding Indictment against Defendants on March 26, 2009, charging them with one count of Conspiracy to Traffic in Counterfeit Goods, in violation of 18 U.S.C. § 371, four counts of Trafficking in Counterfeit Goods, in violation of 18 U.S.C. § 2320(a), and two counts of Smuggling Goods into the United States, in violation of 18 U.S.C. § 545.
After a seven-day trial, a jury acquitted Yuen, but convicted Lam and Chan of one count of Conspiracy to Traffic in Counterfeit Goods, two counts of Trafficking in Counterfeit Goods, and two counts of Smuggling Goods into the United States. Defendants were convicted of counterfeiting a mark registered by Burberry Limited ("Burberry"), registration number 2, 022, 789, depicting a check pattern ("Burberry Check Mark"). Burberry also owns a registered mark, registration number 2, 512, 119 depicting an equestrian knight ("Burberry Knight Mark"), which was not charged in the Superseding Indictment. Burberry often uses the Knight Mark and Check Mark together on merchandise, but has not registered the two as a composite mark. Defendants' merchandise features a copyrighted mark consisting of a mounted knight integrated into a check pattern ("Marco Mark").
"A defendant may move for a judgment of acquittal, or renew such a motion, within 14 days after a guilty verdict or after the court discharges the jury, whichever is later." Fed. R. Crim. P. 29(c)(1). If the jury returned a guilty verdict, the court can "set aside the verdict and enter an acquittal." Fed. R. Crim. P. 29(c)(2).
The test for determining if a court should grant a motion for judgment of acquittal is "whether there is substantial evidence (direct or circumstantial) which, taken in the light most favorable to the prosecution, would warrant a jury finding that the defendant was guilty beyond a reasonable doubt." United States v. MacCloskey, 682 F.2d 468, 473 (4th Cir. 1982). If "after viewing the evidence in the light most favorable to the government, anyrational trier of fact could have found the elements of the offense beyond a reasonable doubt, " the jury's verdict must stand. United States v. United Med. & Surgical Supply Corp., 989 F.2d 1390, 1402 (4th Cir. 1993).
Rule 33 of the Federal Rules of Criminal Procedure provides that, upon a defendant's motion, a court "may vacate any judgment and grant a new trial if the interest of justice so requires." If the request for a new trial is based on newly discovered evidence, the defendant must file the Rule 33 motion within three years after the verdict or finding of guilty. Fed. R. Crim. P. 33(b)(1). If the request is for any other reason, the defendant must file the motion within fourteen days of the jury's verdict. Fed. R. Crim. P. 33(b)(2). Whether a defendant gets a new trial is left to the trial court's discretion. United States v. Smith, 451 F.3d 209, 21617 (4th Cir. 2006). Courts should, however, use their discretion to grant a new trial sparingly, and only do so if "the evidence weighs so heavily against the verdict that it would be unjust to enter judgment." United States v. Arrington, 757 F.2d 1484, 1485 (4th Cir. 1985). When deciding whether to grant a motion for a new trial, the court is allowed to consider all evidence introduced at the trial and can evaluate trial witnesses' credibility. Id.
Defendants argue that the Court should enter a judgment of acquittal pursuant to Rule 29(c) because, after giving the Government the benefit of all reasonable inferences, the evidence is insufficient to sustain a guilty verdict. Defendants set forth two reasons for theirposition: (1) the Burberry and Marco marks are legally distinguishable and do not meet the legal threshold required by the trademark counterfeiting statute, and (2) it is unreasonable to conclude that the Marco Mark was not a composite mark.
Defendants cite Schneider Saddlery Co., Inc. v. Best Shot Pet Products Intern., LLC, No. 1:06-CV-02602, 2009 WL 864072, at *4 (N.D. Ohio Mar. 31, 2009), for the proposition that a mark is not a counterfeit if there are slight differences between it and a registered mark, "so long as [the differences] are apparent to the typical consumer upon minimal inspection." Defendants assert that their mark is legally distinguishable from the Burberry Check Mark because the Burberry Check Mark has white or very light-colored lines, whereas the Marco Mark has white and tan lines. Defendants also assert that the shapes of the marks are different, as the Burberry Check Mark features a square, whereas the Marco Mark is rectangular. Because of these differences, Defendants assert that the Marco Mark is not substantially indistinguishable from the Burberry Check Mark and, thus, the evidence doesn't support a guilty verdict and a judgment of acquittal should be entered.
The Government, on the other hand, contends that the differences Defendants cite are not enough to escape liability under 18 U.S.C. § 2320, as a spurious mark does not have to be identical to a registered mark to be counterfeit.
The Court agrees with the Government. Defendants' argument that the marks on their handbags and wallets are legally distinguishable from the marks on Burberry's merchandise because they have a slightly different color and shape is unavailing. It simply cannot be that a defendant may modify a registered mark in trivial ways and escape liabilitybecause the counterfeit is not identical to the registered mark. The trademark counterfeiting statute's legislative history indicates as much:
[A] mark need not be absolutely identical to a genuine mark in order to be considered 'counterfeit.' Such an interpretation would allow counterfeiters to escape liability by modifying the registered trademarks of their honest competitors in trivial ways.
130 Cong. Rec. H31676 (daily ed. Oct. 10, 1984) (Joint Statement on Trademark Counterfeiting Legislation). Because 18 U.S.C. § 2320 does not require that a spurious mark be identical to a registered mark to impose criminal liability for counterfeiting, Defendants' argument that their Marco Mark is legally distinguishable from Burberry's Check Mark because approximately twenty percent of the marks are different cannot prevail.
Defendants next argue that they are entitled to a judgment of acquittal because the Government did not introduce substantial evidence that the Marco Mark was not a composite mark. A composite mark is a mark that has several separate component marks. Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 9 (1st Cir. 2008). "If a mark contains components that 'are so merged together that they cannot be regarded as separate elements... the mark is a single unitary mark.'" Id. (quoting 4 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:66 (4th ed. 2008)). Defendants cite this anti-dissection rule as proof that the law requires that a registered composite only be compared to another composite, as "[t]he commercial impression of a trademark is derived from it as a whole, not from its elements separated and considered in detail." Estate of P.D. Beckwith, Inc. v. Comm'r of Patents, 252 U.S. 538, 545-46 (1920). Defendants assert that the Government told the jury to ignore the question of whether the Marco Mark was a composite, which Defendants maintain was legally erroneous because the jury was not...
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