United States v. Torkington
812 F.2d 1347 (1987)
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Rule of Law:
The 'likelihood of confusion' element required to define a 'counterfeit mark' under the Trademark Counterfeiting Act is not limited to the direct purchaser at the point of sale. Rather, the standard is satisfied if the use of the mark is likely to cause confusion, mistake, or deception among the general purchasing public, including in a post-sale context.
Facts:
- John Torkington operated a booth at the Thunderbird Swap Shop Indoor Flea Market in Fort Lauderdale, Florida.
- On June 2, 1985, a salesman at Torkington's booth showed a private investigator for Rolex, Edward Little, replica watches bearing the 'Rolex' name and crown trademark.
- The watches, which were kept under the counter and were virtually indistinguishable from authentic Rolexes, were offered for sale at $27 each.
- Little purchased one replica watch for $27, knowing at the time of purchase that it was not a genuine Rolex.
- On June 23, 1985, a deputy marshal executed a search and seizure order on Torkington's booth.
- During the search, authorities seized 742 replica Rolex watches that bore both the Rolex name and crown trademarks.
Procedural Posture:
- A federal grand jury in the Southern District of Florida indicted John Torkington on two counts of trafficking in counterfeit watches under 18 U.S.C. § 2320(a).
- Torkington filed a motion in the U.S. District Court (trial court) to dismiss the indictment.
- The district court granted Torkington's motion and dismissed the indictment, reasoning that it was unlikely a direct purchaser would be confused given the huge price difference between the fake and authentic watches.
- The United States appealed the district court's dismissal to the U.S. Court of Appeals for the Eleventh Circuit.
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Issue:
Does the definition of a 'counterfeit mark' under the Trademark Counterfeiting Act, 18 U.S.C. § 2320(d)(1)(A), require proof that a direct purchaser would likely be confused, or is it satisfied by a likelihood of confusion among the general public in a post-sale context?
Opinions:
Majority - Kravitch, Circuit Judge
No. The Trademark Counterfeiting Act does not require a showing that direct purchasers would be confused; the statute is satisfied where it is shown that members of the purchasing public would be likely to be confused, which includes post-sale confusion. The plain language of § 2320(d)(1)(A) does not restrict the 'likely to cause confusion' test to direct purchasers. The legislative history confirms this interpretation, as Congress deliberately used language identical to the modern Lanham Act (15 U.S.C. § 1114(1)), which courts have consistently interpreted to apply to the 'purchasing public' and to cover post-sale confusion. The Act's central policy is not merely to prevent consumer fraud but to protect a trademark holder's ability to use its mark to identify its reputation for quality, a goal that is undermined when potential purchasers encounter counterfeit goods in a post-sale context and associate the poor quality with the authentic brand.
Analysis:
This case establishes a significant precedent by clarifying that criminal liability for trademark counterfeiting does not require the direct purchaser to be deceived. By extending the 'likelihood of confusion' analysis to include the general public and post-sale contexts, the court significantly strengthened protections for trademark holders against counterfeiters who sell low-priced knock-offs to knowing consumers. This decision makes it much harder for defendants to argue that a vast price difference negates the possibility of confusion, shifting the legal focus from the buyer's state of mind to the broader impact on the brand's reputation and the public at large. It solidifies the principle that trademark law protects the mark owner's goodwill as much as it protects consumers from fraud.
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