Virginia consumers and businesses have new safeguards against counterfeit and unsafe products due to successful legislation advanced as part of Attorney General Bob McDonnell’s 2008 legislative agenda.

McDonnell highlighted these new consumer and business protection measures, which will take effect Tuesday, at a press conference Monday in Alexandria with business leaders, consumer advocates, legislators and law enforcement officials from across Virginia and the nation.

The new anti-counterfeiting laws will:

- Expand the definition of a “mark” to include marks registered with the U.S. Patent and Trademark Office as protected trademarks in Virginia. (Prior to the law, only trademarks registered in Virginia were protected. Most companies register their marks with the USPTO, not with individual states.)

- Increase the penalties for trademark infringement from a Class 2 misdemeanor* to a Class 1 misdemeanor.

- Add two Class 6 felonies if someone infringes on a trademark and possesses 100 or more identical counterfeit registered marks or possesses counterfeit items valued at $200 or more.

- Provide that counterfeit items, property and profits used in the substantial connection with trademark infringement can now be seized by law enforcement and forfeited to the Commonwealth.

McDonnell’s legislation was carried in the House by Del. Ben Cline (R-Lexington). It was co-patroned by Dels. Clay Athey, (R-Front Royal), Beverly J. Sherwood (R-Frederick), James P. Massie, III (R-Henrico), Donald W. Merricks (R-Danville) and Mark Cole, (R-Fredericksburg). The bill was carried in the Senate by Majority Leader Richard Saslaw (D-Fairfax).

Speaking at the event, McDonnell remarked, “These new laws protect Virginia consumers from potentially harmful counterfeit products, while promoting legitimate business in Virginia. Counterfeit products pose a danger to our Commonwealth. Virginia continues to lead the way in protecting our citizens. I salute the partnership represented by, among others, law enforcement, the U.S. Chamber of Commerce, Blazer Investigations, the International Anti-Counterfeiting Coalition and the Virginia Retail Federation. Additionally, I thank Dels. Cline, Athey, Sherwood, Massie, Merricks and Cole, and Sen. Saslaw, for their leadership in the General Assembly.”

Cline noted, "Virginia is one of the first states to pass a law toughening penalties and making it harder for counterfeiters to sell their fake merchandise. Virginia is leading the way in protecting its citizens from harmful products and promoting legitimate business practices.”

“Counterfeiting and piracy threaten consumers’ health and safety, while shaking our confidence in the products we rely on and the brands we trust,” said Caroline Joiner, vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center. “This legislation will protect Virginia’s consumers from dangerous and defective counterfeit and pirated products, while sending a strong message to the perpetrators of these crimes. The Chamber applauds the leadership of Attorney General Bob McDonnell and Virginia’s General Assembly for taking action that serves as an example to other states wrestling with the scourge of counterfeiting and piracy.”

Counterfeited products have included: automotive brake pads, diabetes test strips, airline mechanical parts, smoke alarms, baby food, prescription drugs, cancer-fighting drugs, surgical mesh, batteries, wine, clothing, shoes, DVDs/CDs, toys, toothpaste and jewelry.

There has been an increase in sophisticated counterfeit operations in Virginia. In 2003, in Hampton Roads, 15 medical patients were implanted with fake surgical mesh. In May of 2007 Newport News authorities confiscated $1.8 million worth of counterfeit goods from 11 stores. And, earlier this month, Suffolk Police seized over $32,000 in counterfeit goods from a downtown store, including 260 pairs of counterfeit shoes.

It is estimated that counterfeiting and piracy cost the United States about $250 billion each year and has led to the loss of more than 750,000 jobs. Plus, many of these knockoff products, like medical supplies and car parts, also endanger the user.

The Food and Drug Administration estimates that counterfeit drugs account for ten percent of all drugs sold in the nation. The Federal Aviation Administration estimates that two percent of the 26 million airline parts installed each year are counterfeit, about 520,000 parts.

In the past three years, McDonnell's Financial Crime Intelligence Center has assisted local law enforcement agencies in more than 25 criminal cases involving the sale and distribution of counterfeit merchandise in Virginia. These law enforcement efforts have resulted in the seizure and recovery of counterfeit products valued at approximately $14.5 million; more than 45 arrests on state or federal charges; and 24 state convictions for misdemeanor offenses and 11 federal convictions.

*Criminal Penalties Referenced:

- Class One Misdemeanor: Up to 12 months in jail and/or up to $2500 fine
- Class Two Misdemeanor: Up to 6 months in jail and/or up to $1000 fine
- Class Six Felony: 1-5 years in jail, or up to 12 months and/or a fine up to $2500