Counterfeiting and Cybersquatting: Remedies Under the Lanham Act and ACPA
Trademark owners can use the federal Lanham Act to stop counterfeit goods and seek monetary recovery. When someone registers or uses a confusing domain name in bad faith, the Anticybersquatting Consumer Protection Act may allow the owner to recover damages and obtain control of the domain. The available remedies depend on the conduct, evidence, and resulting harm.
The Law Offices of David H. Schwartz, Inc. represents businesses and individuals in complex California litigation. Attorney David Schwartz helps San Francisco Bay Area clients evaluate counterfeiting and cybersquatting claims and select an appropriate legal response. Contact the firm to discuss suspected misuse of your trademark.
Counterfeiting Is More Than Ordinary Infringement
Trademark infringement generally involves unauthorized use of a mark that is likely to confuse consumers about the source, sponsorship, or affiliation of goods or services. Counterfeiting is a more serious form of infringement involving a spurious mark that is identical or substantially indistinguishable from a registered trademark.
Examples may include:
Products bearing unauthorized copies of a brand name or logo
Packaging made to appear genuine
Online listings presenting imitation goods as authentic
False labels or tags identifying the manufacturer
Websites selling fake versions of branded products
A product is not necessarily counterfeit merely because it resembles another company’s product or uses a similar name. When the marks are not identical or substantially indistinguishable, the conduct may support an ordinary infringement claim rather than a counterfeiting claim.
What Remedies Does the Lanham Act Provide for Counterfeiting?
The Lanham Act allows courts to stop counterfeit activity, remove counterfeit goods from the market, and award financial relief when the trademark owner proves the required elements.
A court may issue an injunction prohibiting the defendant from manufacturing, advertising, selling, or distributing counterfeit goods. Preliminary relief may be available before trial when the owner satisfies the applicable standards.
Courts may also order counterfeit goods, labels, packaging, signs, and promotional materials to be impounded or destroyed. In exceptional cases, a court may authorize an ex parte seizure without first notifying the alleged counterfeiter. This extraordinary remedy has strict requirements because it permits the seizure of property before the opposing party responds.
A successful owner may seek the defendant’s profits, actual damages, and litigation costs. Attorney fees may also be awarded in exceptional cases. Instead of proving actual damages and profits, the owner may elect statutory damages.
These generally range from $1,000 to $200,000 for each counterfeit mark used with each type of goods or services. For willful counterfeiting, the court may award up to $2 million per counterfeit mark for each type of goods or services.
The court determines the appropriate amount based on the evidence. A finding of counterfeiting does not automatically produce the maximum award.
When Does a Domain Name Violate the ACPA?
Cybersquatting generally occurs when someone registers, traffics in, or uses a domain name with a bad-faith intent to profit from another party’s protected trademark. The domain must also be identical or confusingly similar to a distinctive mark, or dilutive of a famous mark, under the applicable standards.
Possible examples include:
Registering a brand’s name and demanding payment to release it
Redirecting visitors to a competitor
Creating an imitation website to profit from mistaken visitors
Registering multiple domains incorporating another company’s marks
Concealing the registrant’s identity through false contact information
Similarity alone is not enough. The owner must establish the required bad-faith intent to profit. Legitimate use of a name, noncommercial activity, or a reasonable belief that the use was lawful may affect the claim.
ACPA Remedies Focus on the Domain
The most direct ACPA remedy is an order requiring the domain name to be forfeited, canceled, or transferred to the trademark owner. This removes the domain from the registrant’s control.
The owner may also seek actual damages and the defendant’s profits. Alternatively, the owner may elect statutory damages ranging from $1,000 to $100,000 per domain name. Injunctive relief may prevent continued use of the mark or related domains, and attorney fees may be available in exceptional cases.
When the registrant cannot be located or the court cannot establish personal jurisdiction, the ACPA may permit an action against the domain name itself. This is called an in rem action. The available remedy is generally limited to forfeiture, cancellation, or transfer of the domain.
When Counterfeiting and Cybersquatting Overlap
The same conduct may support multiple trademark claims. For example, someone might register a confusing domain name and use the associated website to sell counterfeit products.
In that situation, trademark litigation may include a counterfeiting claim under the Lanham Act, a cybersquatting claim under the ACPA, and a request for injunctive and monetary relief. Each claim has separate elements, so proving cybersquatting does not automatically prove counterfeiting.
The owner’s priorities also matter. One business may need an immediate order stopping sales, while another may primarily want control of the domain. Identifying the most urgent harm helps determine which remedies to pursue.
Evidence to Preserve Before Taking Action
Evidence should be preserved before the suspected counterfeiter or domain registrant receives notice of a potential claim. Online listings can disappear quickly, and domains can be transferred or redirected.
Useful evidence may include:
Screenshots showing the URL, content, and date
Counterfeit products, packaging, receipts, and shipping records
Domain-registration and registrar information
Online advertisements and marketplace listings
Communications with sellers or registrants
Evidence of consumer confusion
Records showing registration and use of the trademark
A sample purchase may help document the transaction and preserve the product. The collection process should be handled carefully so the evidence can later be authenticated.
Choosing an Enforcement Strategy
A federal lawsuit is not always the first response. Depending on the facts, a trademark owner might send a cease-and-desist letter, report a listing to an online platform, initiate a domain dispute, negotiate a transfer, or seek relief in court.
Litigation may be necessary when informal efforts fail or the owner needs an injunction, discovery, damages, seizure, or a binding domain-transfer order. The urgency of the harm, the identity of the opposing party, the strength of the evidence, and the business cost of litigation should guide the decision.
Before making accusations or demanding payment, the owner should confirm the scope of the trademark rights and the legal basis for the claim.
Trademark Litigation Attorney Serving the San Francisco Bay Area
Attorney David Schwartz has more than 45 years of experience serving California businesses and individuals in complex disputes. His work has included trade secret matters, complex business and commercial litigation, Civil RICO claims, and shareholder derivative actions.
He approaches litigation strategically, considering both the immediate dispute and the client’s broader business objectives. The firm takes on challenging litigation so clients can remain focused on operating their businesses.
From his San Francisco office, Attorney David Schwartz serves clients throughout the Bay Area and California, including San Jose, Santa Clara, San Mateo, Alameda County, and Oakland. Contact the San Francisco Bay Area trademark litigation attorney to discuss counterfeiting, cybersquatting, or another threat to your trademark rights.