ally unreasonable because it failed to hold the government to its burden of proof regarding the sentencing and handsome and and incorrectly applied the sentencing guidelines by calculating the infringement amount of the counterfeit goods by reference to the retail value of the goods if genuine rather than the retail value luminary question is your client she is out she's currently serving four months of home detention but she is out of prison and so you feel the supervision she would say she was sentenced to four months of incarceration plus two years of supervised release to get a first revised really after yes the four months of home detention are part of the two years of supervised release but she will have to finish that off as well we believe that the sentence in this case should be vacated and the case remanded for a new sentencing at which the government should not be permitted to submit new evidence with regard to the infringement amount the basic facts of this case this when you and her codefendant were selling counterfeit handbags from the back room of a nail salon where they both worked there were also some counterfeit bags that were seized from the home that the two of them shared so there were two separate seizures miswiring did it mitt ultimately that she knew that these items were counterfeit but one of the reasons she knew that they were counterfeit was because the price of them was so low in comparison to the price of genuine items of a similar nature she stipulated to the base offense level which was eight but reserve the right to contest any and handsome and based upon the value of the items the probation report adopted the government's valuation which provided an increase of six levels based on a valuation of the items i genuine at sentencing objected to that both prior to the sentencing and a pre sentence memorandum objections to the pre sentence report and again at sentencing at the sentencing hearing itself the government offered no evidence to indicate that a reasonably informed purchaser would find these items would mistake these items more the genuine items which is one of eight circumstances in which it is proper to use the retail value of the genuine me look at the items and make that decision what the items were not available in the courtroom as part of our sentencing memorandum  i submitted pictures of many of the items which i believe showed the deficiencies crooked stitching missing label broken zippers things of that nature also submitted as part of the sentencing memorandum where the affidavits in verifications from the manufacturers which detailed all of the reasons that these items were in fact counterfeit and they mentioned several of these same things that the quality was just not up to par that there was crooked stitching that there were i think missing serial numbers i had also pointed out words were misspelled and the little patches that go on the purses that detail some of the  information so the judge had that information the manufacturers had also discussed that many of these items weren't even they weren't even copies of genuine items so they weren't similar to anything that they manufactured they were simply purses that had a trademark label did he how were those price the ones that weren't well the pricing evidence agents purchased three of the purses and one that was allegedly a coach one that was a burberry and one i think a louis for tom those were purchased for fifty dollars each for two of them and thirty dollars for the other wants one hundred thirty dollars for those three bags the government's expert determined that the retail value of those bags if genuine was approximately two hundred two times or two thousand one hundred thirty dollars something in that range my question is how how did they price items that did not have a genuine counterpart the manufactures i think i am not sure of the exact process they used but they stated in the verifications that the items if genuine or genuine items of i suppose a similar nature would be worth x amount of presentation of evidence  again there are eight circumstances enumerated in application no two to sentencing guideline to be five point three and the eight situations in which the retail value of the genuine items is applied and her meaning the infringement amount are generally those situations in which a one to one correlation exists between the sale of the infringing items and the display still a legitimate item and the comments to the history of that guideline section indicate that in a situation such as this where you have inferior quality items being sold you know out of the back room of a nail salon or a flea market was the example that they use that there's clearly not a one to one correlation because the people buying a louis vertonghen bag for fifty dollars out of the back room of nail salon  not people that would go into one of the retail stores where they're typically sold and pay two thousand dollars or you know whatever price that bag is that it's just not the same market and therefore you don't have that one to one correlation i don't know the answer to that but i don't you know i don't think this is a situation where there's that one to one correlation there might be when you know an individual person here or there who makes that decision but it certainly isn't the case that for every fifty dollar bag purchase that a fifteen hundred dollars bag that wasn't purchased and that's i think the situation that the guiding items were there were one hundred twenty purses and forty three wallets one of the one of the things that the district court relied were sort of in the back of a nail salon or in a bathroom they were they were in exactly and show room typesetting no the evidence from the government agents from their reports was that they had gone to a nail salon asked about purses were taken in the this was in the pre sentence report because there wasn't any evidence presented here and well i had submitted the reports of the agents as an exhibit to the sentencing memorandum so that was also  us so when the agents went into the store and asked about purses they were taken to this back room of the salon now it wasn't described exactly but it was a separate room there were some pictures that the government provided that showed the bags hanging on the walls and a couple of instances you could see the price tags you know i don't mean to interrupt you but i mean in a way you could look at this guy as the government failed to submit any  evidence you could also look at it as the government attempted to rely on the evidence you submitted and then there's an issue as to whether the government didn't have anything else to submit there would be an issue as to whether it was permissible based on that record for the district court to find that the retail value of the genuine i should be used well which is another way to describe the issue i guess yes and i would submit that under either situation there was insufficient evidence in the record for the court to find that a reasonably informed purchaser would be mistaken into believing that these were genuine items well i guess i government about this but the government seems to sort of gloss over the fact that there is an exception to the use of genuine the retail value the genuine items that arguably applies here but i think a better position for the government would be the one i just lied for them so the the genuine items were all found in her home that is my understanding now there was no evidence in the record regarding that the reports talk about items being seized from two different places at the sentencing hearing there were some discussion about that and the u s attorney turned to the agent and asked him a question the agent never testified and then  kern told the court that all of the items were kept together i disputed that because there are clearly were two seizures one from the home and one from the nail salon and it was my understanding from my client and i told the judge does that the genuine items were seized from the home and that those were not items offered for sale and so that there was no confusion simply from having the items mixed in but i am one important point isn't it because one of the findings the district judge made here was that i think that is a very important point and my point is that there is no evidence in the record you know that really confirms where they were found whether they were together or whether they were not and so that  correct there is no evidence in the record to support the fact that they were intermingled and so i think that the government's argument as opposed to stop it it's not really it wasn't really clear to me but  in most of the cases in every other case i reviewed in which the reasonably informed purchaser exception was used there was testimony generally from an agent but sometimes from somebody else involved in the case that the items were indistinguishable and there was nothing of that nature in this case and so we believe that the sentence should be vacated and sent back thank you that there were genuine items mixed with the counterfeit items i think it's probably a little foggy to be honest the the i was looking at the transcript as counsel was answering judge givens questions and the only place that it comes up is where the district court asked talking about the genuine ones that were mixed in he asked the ones that were later found to be genuine or they kept with the other bags were they kept separate from the other bags and my response to him after consulting with the agent who was at counsel table with me i said according to the agent your honor they were all together well eviden that the only evidence would be either my response to the core your response is not the only the only thing on the record i stand corrected i apologize on the record would be my answer i believe in the on the part of the defendant that the government then bears the burden of proof proper preponderance of the evidence and if there was some evidence to support the decision that position and the government had to make the things one with regards to the establishing what the value if the items were genuine as far as far as the starting point went the parties stipulated in the factual basis for the plea agreement that if these items were genuine this is what but they would get you where you need to be in terms of this issue and then when the sentencing memorandum was filed by the defendant basically the same things except for a live witness the same things that we would have put in the evidence at a sentencing hearing the reports of the substance of the reports from homeland security the records the verifications from the trademark holders those were already in the rector you know literally on the defendant's evidence which is what i said during the defense argument or your position i would rely on the set whether it's her evidence for whether it was evident evidence that she presented it becomes her evidence when she's the one that offers it to the court that say i think that doesn't mean you can't use it if they carry your burden of that if it's before the court it's part of the record the verifications talk about valuation some do not some of the other items that were submitted as part of that process were the valuations from the customs and border protection when they when the items were seized they do a review of their import specialist value items based on their training of the trademarks that was before the court so it's not that the district judge just arbitrarily came up and said well i think it's between thirty and seventy there's no question i mean i don't think anybody is challenging the value is genuine and the real question is whether some or all of them should have been excluded and valued as they were as the infringing product rather than the infringed process and when you look at the record there doesn't seem to be i mean these items were many of them were clearly not genuine and yet the judge said well i mean he gave a couple of reasons one is that they were intermingled which we have an insufficient record and the second was that and maybe people thought that they were just so overpriced it's it's  they just got him a good prices the rest of the thought that he didn't really say but actually his second reason was that the value could have been so low because people just thought they were stolen merchandise and that if they would this be mistaken and maybe some of the bedrooms should have been valued as genuine and i'm not but to say that this you know this whole thing of of their vote and a hundred and twenty purses and forty two wallets were all as genuine i think you know where's the support for that well actually by the time it got to the coming up with the thirty to seventy thousand dollar value a number of the reasonable purchaser standard and it's pretty hard to look at does and even have to be conversant in the purchase of handbags that i would agree with that statement of the the thing is that the defendant sentencing memo was filed prior to immediately prior to the hearing before the judge took the bench  misfortunate indicated to me that some of the pictures that were attached to the sentencing memo had been incorrectly attached they were actually represented bags that had been taken out of the calculation of the loss and there was really no breakdown i mean this literally happened maybe sixty or one hundred twenty seconds before the judge took the bench so there was no no breakdown even as between as to which consider there's not any other evidence really that pertains to this that the district court could consider on remand is there sort of i suppose bringing  here upon which he based his ruling one of which you seem to admit has no factual support that is the one we talked about earlier with respect to whether the genuine items were commingled with the fake ones it seems to me the other one that he made was that the minimal cost doesn't necessarily indicate that they're counterfeit because they could be stolen etc but didn't the government make a stipulation here that undercuts that a bit didn't used to pilate as part of the agreed facts here that  the defendant knew or should have known they were counterfeit because of the minimal cost and i guess the extension that is doesn't that also suggest that a reasonably informed purchaser would come to the same  and what would the sentence range have been without this enhanced without the enhancement the base level would have been eight it would have been i believe a two level increase or the amount of loss that would have been at it ten minus two or exceptions so it would have been at a level which was zero to six months as it were with the six level and handsome and it was a fourteen minus two and then the judge  did a variance down which roughly translated into another two levels just to clarify one of the last points they were discussing with mr kern with the enhancement that the district court found to be appropriate here that did put miswiring in zone c for sentencing purposes so she was not eligible for straight probation or even a sentence so simply out of the god lives under the guidelines correct she was in zone c which so the split sentence which is what she received was the lowest that could be given to her  going back to another point that you had raised judge greer the the cost issue the minimal cost issue it was our position that that was an indication that a reasonable a reasonably informed purchaser you know would have taken into account and therefore would not have mistaken these for genuine items not just the cost itself but also the location where the items were being sold because the the items the genuine items of this nature are sold only in you know high end salons oh and by the manufacturers or in high priced department stores such as saks fifth avenue or nordstrom or places like that there are no legitimate items of this nature sold at nail salons or  you know discount stores things like that and that was one of the things that the manufacturers had put in their verifications was the location that was another factor that they had raised so as as the court has discussed this morning i think it's clear that there was not sufficient evidence in the record for the judge to have made a finding that the reason a reasonably informed purchaser exception applied therefore to be the application no should have applied and the retail value of the counterfeit items should have been used to determine whether or not and handsome it was appropriate it was that amount in the record well the judge never determined that i'm out in the sentencing memorandum that i filed i submitted  there one way in which a term in that amount was to use an average price which i calculated to be somewhere in the neighborhood of fifty dollars per item apply that to all of the items and that would have resulted in the two level enhancement that mr kern discussed  taking the amount from the eight base level up to a ten and then back to an eight with acceptance of responsibility but there were no findings made as to the retail value of their intermediate levels between yes yes it's all based on the mon amount so i believe there's a four level enhancement although i'm not sure exactly what that range