Fake it Till You Make it: Sports Counterfeiting

By Sara Desai*                                                                                Posted: 10/21/2022

This October, the NBA, MLB, NHL, and multiple universities filed complaints against domain name registrants selling counterfeit trademarked products.[1][1]  The NBA, MLB, NHL, and multiple universities own many trademarks reflecting brands and logos from each member team.[2][2]  For example, the NBA has trademarks for team names such as the Boston Celtics and Los Angeles Lakers and their corresponding logos.[3][3]  First, the complaints request that the domain name registrants transfer the domain names to the trademark owners or fully disable merchandising accounts.[4][4]  Second, the complaints request that online marketplaces stop displaying counterfeit goods and advertisements used by domain name registrants.[5][5]  Third, the complaints request relief for trademark infringement, counterfeiting, and false designation of origin.[6][6]  

What is Counterfeiting?

A trademark is “any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.”[7][7]  Trademark counterfeiting is an illegal act that occurs when one person uses another’s trademark in commerce without the trademark owner’s permission by labeling goods with the same mark.[8][8]  The illegal user aims to take a free ride on the goodwill of the owner’s reputation to make a profit.[9][9]  Counterfeit goods are usually lower quality and are designed to trick consumers who are searching for brand-name goods.[10][10]  Consumers either are tricked into purchasing the counterfeit item, believing it is authentic, or purposely purchase the counterfeit item.[11][11]  Counterfeit goods can appear very similar to name-brand products; often, only slight differences indicate that good is fake.[12][12]  Counterfeits can easily confuse consumers who wish to buy products because of their branding or logos.[13][13]  In fact, counterfeiting is “the largest criminal enterprise in the world.”[14][14]  For sports logos, in particular, fans are easily hoodwinked into purchasing counterfeits due to the inexpensive pricing.[15][15]

Anti-Counterfeiting Laws

The Trademark Counterfeiting Act of 1984 made it illegal to counterfeit trademarked goods.[16][16]  There are various requirements to prove a mark is counterfeit.[17][17]  Some factors considered include if the mark is used “in connection with trafficking goods or services,” is “‘identical with, or substantially indistinguishable from’ the genuine trademark,” if the genuine trademark is registered and in use, and if the “mark is ‘likely to cause confusion, mistake, or deception.’”[18][18]

Why is Sports Counterfeiting on the Rise?

In the modern day, the use of online marketplaces for shopping has led to increased intellectual property theft.[19][19]  Most notably, Covid-19 has pushed people towards shopping online even more so than before.[20][20]  Sports items targeted by counterfeiters include clothing, tickets, and other memorabilia.[21][21]  As a result, consumers are receiving fake and potentially unsafe goods under the belief that they are name brands.[22][22]  Many counterfeiters are from foreign countries such as China and use false identities to register on online marketplace platforms to sell counterfeit goods.[23][23]

Issues with Counterfeits

Unfortunately, counterfeiting can cause many issues, such as economic loss and defamation of authentic brands.[24][24]  Furthermore, counterfeit goods have been linked to funding criminal organizations and contributing to unsafe working conditions, which can result in harsh labor conditions and ultimately harm the economy.[25][25]  Counterfeit goods can lead to fans being victimized by counterfeit sellers and the loss of business for legitimate distributors, retailers, and partners working with authentic brands.[26][26]

*Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2023, Villanova University Charles Widger School of Law

[1]See Isaiah Portiz, NBA, MLB, Universities Go After Counterfeiters in New Lawsuits, Bloomberg Law (Oct. 5, 2022, 4:54 PM) https://news.bloombergtax.com/ip-law/nba-mlb-universities-go-after-counterfeiters-in-new-lawsuits (explaining that “three major professional league sports leagues and four universities known for their sports programs filed lawsuits in a Chicago federal court . . . to shut down a variety of entities selling counterfeit merchandise online.”).

[2] See NBA Properties Inc. v. The P’ship and Unincorporated Ass’n Identified on Schedule “A”, N.D. Ill., No. 1:22-cv-05458 (2022), available at https://www.bloomberglaw.com/document/X61EVD1AVB28BBQSEHQ218MMOLQ? (listing various trademarks owned by NBA).

[3] See id. (illustrating court docket listing trademarks, logos, and various goods and services associated with NBA).

[4] See id. (noting plaintiff’s request to disable accounts).

[5] See id. (noting plaintiff’s request to stop display of counterfeit goods).

[6] See id. (identifying plaintiff’s request for relief).

[7] See What is a Trademark?, USPTO (Jun. 13, 2022, 5:30 PM), https://www.uspto.gov/trademarks/basics/what-trademark (explaining trademarks are used by brands to distinguish themselves from their competitors, can identify source of goods and services, and help guard against counterfeiting and fraud).  

[8] See About Counterfeiting, IACC, https://www.iacc.org/resources/about/what-is-counterfeiting (last visited Oct. 18, 2022) (defining counterfeit as “an item that uses someone else’s trademark without their permission.”).

[9] See id. (explaining counterfeits allow criminals to unfairly profit from trademark owners and benefit from trademark owner’s reputation).

[10] See The Basics of Counterfeit Goods, USPTO, https://www.uspto.gov/sites/default/files/documents/Basics%20of%20Counterfeit%20Goods.pdf (last visited Oct. 18, 2022) (“Counterfeits are goods intended to trick consumers who rely on brand names and logos when deciding what to buy.”).

[11] See id. (noting “[s]ome consumers intentionally buy counterfeit goods, while others may mistake counterfeits for the real thing.”).

[12] See id. (“Counterfeiters deceive consumers by placing familiar brand names or logos on fake goods that are not produced by the brand owner. These goods may appear safe and legitimate, but are manufactured and sold illegally. When you buy counterfeits, you are not actually getting the product you wanted to buy.”).

[13] See id. (explaining consumers usually seek out particular brands due to quality or specific brand features).

[14] See U.S. Intellectual Property and Counterfeit Goods—

Landscape Review of Existing/Emerging Research, Library of Congress (Feb. 2020) https://www.uspto.gov/sites/default/files/documents/USPTO-Counterfeit.pdf (stating as of 2018, counterfeiting is largest criminal enterprise in world and sales range from $1.7 trillion to $4.5 trillion per year).

[15] See Counterfeiting, Piracy, and Sports: IP Protection Insights for Brands and Fans, Corsearch (May 27, 2021), https://corsearch.com/knowledge-base/news/article/counterfeiting-piracy-sports/ (“In January 2019, U.S. law enforcement agencies seized over 280,000 counterfeit sports-related items worth an estimated $24.2 million.”).

[16] See 1701. Trademark Counterfeiting—Introduction, The U.S. Dep. Of Justice Archives, https://www.justice.gov/archives/jm/criminal-resource-manual-1701-trademark-counterfeiting-introduction (Jan. 16, 2020) (“The 1984 Act created an offense, codified at 18 U.S.C. § 2320, which provides that ‘(w)hoever intentionally traffics or attempts to traffic in goods and services and knowingly uses a counterfeit mark on or in connection with such goods or services’ shall be guilty of a felony.”).

[17] See 1715. Trademark Counterfeiting—Requirements for a “Counterfeit Mark”, The U.S. Dep. Of Justice Archives, https://www.justice.gov/archives/jm/criminal-resource-manual-1715-trademark-counterfeiting-requirements-counterfeit-mark (Jan. 17, 2020) (listing requirements to prove mark is counterfeit).

[18] See id. (quoting 18 U.S.C. § 2320) (providing legal requirements to prove counterfeit mark).

[19] See IPR Center Seizes $97.8M in Counterfeit Sports Merchandise During Annual Operation Team Player, ICE (Feb. 10, 2022), https://www.ice.gov/news/releases/ipr-center-seizes-978m-counterfeit-sports-merchandise-during-annual-operation-team (explaining Covid-19 makes commercial websites targets).

[20] See id. (explaining Covid-19 moved most shopping online).

[21] See id. (explaining sports teams are particularly targeted by counterfeit sellers, especially during times like Super Bowl).

[22] See You’re Smart. Buy Smart, NCPC, https://www.ncpc.org/goforreal/ (last visited Oct. 18, 2022) (explaining counterfeits are “cheap imitations” that fund criminal enterprises, drain economy, and cause serious injuries).

[23] See Portiz, supra note 1 (“The counterfeiters likely reside in China or other foreign jurisdictions and routinely use false identities and addresses when registering on e-commerce platforms or websites, according to the six complaints.”).

[24] See IPR Center seizes $97.8M in counterfeit sports merchandise during annual Operation Team Player, supra note 19 (“The theft of intellectual property and trade in fake goods threaten America’s economic vitality, national security, and the American people’s health and safety . . . .”).

[25] See The Basics of Counterfeit Goods, supra note 10 (noting counterfeit goods can fund criminal organizations and are made in unsafe working conditions).

[26] See IPR Center seizes $97.8M in counterfeit sports merchandise during annual Operation Team Player, supra note 19 (explaining Los Angeles County Sheriff’s Department Lieutenant, Geoff Deedrick stated consumers and legitimate distributors are being victimized by counterfeiters).