A Warning To Fakers

[Downing]

This is old news, but my AD reminded me of this story so I dug through the Oregonian archives and found it:

Rolexes are fake; customs fine is real

$55,300 - Mike Korpi of Forest Grove says he brought seven "junk" watches from China as gifts
Wednesday, May 09, 2007
by NOELLE CROMBIE and MICHAEL ROLLINS

Mike Korpi wanted to bring back trinkets from China for his three kids and five grandkids, so he picked up some fake Rolex watches in a bargain shop -- paying a couple of bucks apiece.

As he left Shen Zhen for Oregon, he wore one and packed the other seven in his duffel bag. When the flight landed, a customs agent spotted the fake watch on Korpi's wrist and told him he'd have to be searched.

Korpi understood when the agent said he'd have to seize the watches. The agent said Korpi could keep the one he was wearing.

And that was the end of that. Or so Korpi thought.

Over the next several months, the U.S. Department of Homeland Security tried reaching Korpi. They sent letters to his ex-wife. They tried calling him. Korpi assumed the government was trying to give the watches back.

But on Friday, he found out he was being fined for bringing counterfeit goods into the United States.

How much? Korpi asked the agent, figuring it couldn't be much since he paid $14.40 for all eight watches.

$55,300, the official said.

"I about hit the floor," Korpi said in an interview with The Oregonian on Tuesday. "I said, 'You gotta be joking.' I figured someone had missed a decimal point."

The feds told him he'd violated Rolex's protected trademark by buying the fake watches

Now Korpi, 55, a Forest Grove race car mechanic whose story appeared on Willamette Week's Web site Monday, doesn't know what to do. A lawyer looked into the case for him, but he can't afford to hire one for the balance of the case.

He said the feds based the fine on the manufacturer's suggested retail price for real Rolexes.

Even if the government garnished his wages, Korpi said he'd be paying off the fine until he's 67.

"I don't know what is going on here," said Korpi, who has been to China four times in the past two or so years to visit his girlfriend, a tattoo artist. "I can't sleep. I haven't slept in five days. It's gnawing at me hard. . . . If they are supposed to be border protection and patrol, why are they bothering me with eight dinky watches?"

Peter Heuser, who runs an intellectual property rights firm in Portland, said this is the first he has ever heard of someone being levied with this steep of a fine for eight counterfeit watches. The $55,000 figure seems more in line with someone who is trafficking such goods.

Still, Heuser said, it appears that Korpi did bring watches into the country that violate trademark rights. Had Rolex itself moved against him, they could have collected up to $100,000 per trademark violation. U.S. Customs law also lets them levy a fine, he said, which appears to be the case here. Heuser said the ultimate fine might be much lower once Korpi meets with customs officials.

Korpi said the watches were junk. The crystal fell off one tucked into his bag. The watch he got to keep broke three weeks later, so he left it at a bar.

"I can't stress how cheap these are," he said. "These are cheap junk from a dollar store-type deal. They are so obviously fake.

"You couldn't have gotten five or 10 bucks for them on the street. This is ridiculous."

Feds drop huge fine against Forest Grove mechanic who brought eight fake Rolex watches home from trip to China

Posted by The Oregonian May 10, 2007 06:31AM

The feds have dropped their case against a Forest Grove mechanic who brought eight fake Rolex watches home with him after a winter vacation to China.

U.S. Customs officials last week told Mike Korpi, a Forest Grove mechanic, that he'd violated trademark laws when he tried to bring the counterfeit goods into the country after his visit to Shen Zhen, China.

Not only did they seize the watches, intended as gifts for Korpi's children and grandchildren, but last Friday they told him to pay a $55,300 penalty.

The fine stunned Korpi, who said he paid $1.80 for each watch in a bargain store.

But late Wednesday Korpi got some good news: The feds were dropping the case.

A fines, penalties and forfeiture officer for the customs agency wrote Korpi a letter telling him they were canceling the fine and closing the case.

Korpi, who said he'd had trouble sleeping since learning about the whopping fine, said he can finally rest easy again.

[Lol-x]

The penalty was a huge hit, dropping it was very kind, but it does send a strong warning to fakers :
Thanks for the information.

[frostie]

thanks for the info

[Andad]

should have left the fine in place.

[CPTL]

It's a tough issue for a guy like Korpi. He likely didn't know it was illegal to buy the watches for personal use. Certainly never could have imagined such a penalty.

Same thing goes with websites that allow you to trade music/movies/etc. Until Napster broke, people likely didn't know what they were doing was stealing. Some people have been prosecuted, and now everyone more or less knows--but they still do it.

Tough balance between due process for the consumer and the property rights of the company.

That said, people who are knowingly buying/manufacturing/distributing these things for commercial purposes should be fined extensively and/or sued.

[unclesallie]

the government made the right decision in dropping the case against this guy. moreover, this story doesn't make sense. there's a customs declaration, and if on the customs declaration he put down the number of watches, identified them as look-alikes(fake)and a value, he's complied with u.s. customs rules, i think. he bought a fake watch. he did not violate anyone's trademark or tradename by bringing the watch to the u.s. he bought a fake watch. that's it, and if he declared it/them to be fake, what laws did he break and what trademarks/tradenames did he violate? now the SELLER sure violated Rolex tradmarks and tradenames, and if the BUYER tried to resell here in the U.S. why, that's a different story..but don't the customs agents have to follow this guy up, investigate and see if he attempts to sell or actually sells fake rolexes in the u.s.?

[Rockrolex]

Originally Posted by unclesallie

the government made the right decision in dropping the case against this guy. moreover, this story doesn't make sense. there's a customs declaration, and if on the customs declaration he put down the number of watches, identified them as look-alikes(fake)and a value, he's complied with u.s. customs rules, i think. he bought a fake watch. he did not violate anyone's trademark or tradename by bringing the watch to the u.s. he bought a fake watch. that's it, and if he declared it/them to be fake, what laws did he break and what trademarks/tradenames did he violate? now the SELLER sure violated Rolex tradmarks and tradenames, and if the BUYER tried to resell here in the U.S. why, that's a different story..but don't the customs agents have to follow this guy up, investigate and see if he attempts to sell or actually sells fake rolexes in the u.s.?

Sorry, Dan, but that's not the law.

The seller violated Rolex's trademark rights in China by selling the fakes. The buyer violated Rolex's U.S. trademark rights when he imported them into this country. The fact they were clearly fake doesn't absolve him. The fact is they were fake (how fake is not the issue - there is no degree of fakeness here). It's also not clear if he declared them. But even if he did, that doesn't clear him. It would just make it easier to spot the fact that he was importing fakes in violation of Rolex's U.S. trademark rights.

He's damned lucky the feds dropped the case. Rolex could have gone after him for the import violation, but probably for PR reasons chose not to do so.

[daunwaun]

what to do about fakes??

any suggestions??

[unclesallie]

ok...i was ready to do research, but I see you're an Intellectual Property rights specialist. Great! Can you give me a reference to US Code on this? Also, what if the guy went to China and bought 5 fake watches, and unlike in the guy who got fined, he thought he was buying REAL rolexes, but they were fake. Let's say he spent $5000 U.S. in a store and got taken. Same result?
dan

[daunwaun]

Originally Posted by unclesallie

ok...i was ready to do research, but I see you're an Intellectual Property rights specialist. Great! Can you give me a reference to US Code on this? Also, what if the guy went to China and bought 5 fake watches, and unlike in the guy who got fined, he thought he was buying REAL rolexes, but they were fake. Let's say he spent $5000 U.S. in a store and got taken. Same result?
dan

very good question dan