Title: The People v. Mordekhay Levy

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 191  
The People &c.,
            Respondent,
        v.
Mordekhay Levy,
            Appellant.
Nathaniel Z. Marmur, for appellant.
Edward D. Saslaw, for respondent.
READ, J.:
In October 2004, police executed a search warrant
against Black & Yellow Major Auto Parts, a business owned by
Defendant Mordekhay Levy, to find and seize counterfeit parts for
Ford vehicles. The search, which was conducted by a detective and
a brand-protection employee from Ford, turned up a variety of
allegedly counterfeit parts that were immediately seized.
Roughly at the same time, Ford filed suit against Levy
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No. 191
1This is the description of the preliminary injunction given
by Ford's outside trademark attorney at Levy's trial for
trademark counterfeiting.  The injunction was admitted into
evidence, but was not included in the record on appeal.  
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for trademark infringement arising from the sale of counterfeit
parts, and the court issued a temporary restraining order.  In
November 2004, at the invitation of Levy's attorney, the brand
protection employee and Ford's trademark attorneys visited Black
& Yellow's warehouse on a Friday and the following Tuesday to
identify parts that were not genuine Ford parts.  Following these
visits, Levy entered into a stipulated preliminary injunction
that prohibited him and his business from "manufacturing,
advertising, offering for sale, selling or distributing
automotive parts or any related products or services having or
bearing any trademark of Ford, Ford Motor, Ford Motor Company,
Ford blue oval, racing car, speeding car design, Motorcraft,
Lincoln Star, or Lincoln certified or any Ford part number or any
other mark or design that's likely to cause confusion with any
marks that are specifically listed in this order."1
Subsequent search warrants were issued and executed in
October 2005 and July 2006, both of which resulted in the
confiscation of allegedly counterfeit parts from Black & Yellow's
warehouse.  As a consequence, Levy was eventually indicted and
tried before a jury for second-degree trademark counterfeiting
(Penal Law § 165.72).  A person is guilty of this crime
"when, with intent to deceive or defraud some other
person or with the intent to evade a lawful restriction
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No. 191
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on the sale, resale, offering for sale, or distribution
of goods, he or she manufactures, distributes, sells,
or offers for sale goods which bear a counterfeit
trademark, or possesses a trademark knowing it to be
counterfeit for the purpose of affixing it to any
goods, and the retail value of all such goods bearing
counterfeit trademarks exceeds on thousand dollars"
(id. [emphasis added]).   
 
The People's trial witnesses identified parts seized in
the 2005 and 2006 raids as counterfeit in several ways.  In some
cases, the products were not manufactured by Ford (or its
aftermarket brand, Motorcraft), but nevertheless bore a Ford
product number; in other cases, the products bore a Ford
trademark (e.g., the familiar "Ford oval"), but were tagged as
fake because of their packaging.  There was evidence presented to
show that Levy had purchased and sold the purportedly genuine
parts at less than the cost to a Ford dealer.  Additionally,
Ford's chief trademark counsel testified that the trademarks
alleged to be counterfeit were registered and in use.  Through
him, the People introduced evidence regarding 34 trademarks
claimed to be in full force and effect.
After the People rested, Levy moved to dismiss on the
ground that a majority of the parts -- seven of the 12 parts
charged in count one, and both of the parts charged in count two
of the indictment -- were not covered by the trademark
registration certificates introduced into evidence and therefore
were not "counterfeit" within the meaning of Penal Law § 165.70. 
The trial judge reserved decision, and Levy called three
witnesses in his defense.
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No. 191
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The first witness handled shipping and receiving for
Levy's warehouse.  He testified about how he separated genuine
parts from their aftermarket or off-brand counterparts.  The
second witness, the co-owner of a wholesale auto parts business,
described the genuine "Crown Victoria" tail lights he purchased
from Ford and then resold to Levy.  The third witness was the
former parts manager at a Lincoln-Mercury dealership authorized
to sell Ford parts.  He testified that Levy was his "top"
customer, and that he offered him discounts "[b]ecause of the
volume of parts [Levy] bought."
After the close of evidence, Levy asked the trial judge
to instruct the jury that an "intent to evade a lawful
restriction" on the sale of goods under Penal Law § 165.72
required knowledge that the parts were counterfeit.  The trial
judge declined this request and elected to "follow the CJI"; he
also denied Levy's motion to dismiss.  After charging the jury,
the trial judge again considered and turned down a request from
Levy for what the defense styles a "knowledge charge," explaining
that
"[t]he second element [necessarily] provides for the
knowledge because you can't intend to evade a lawful
restriction without knowing what it's all about.  The
knowing is part and parcel of the intention because if
you didn't know it, you couldn't intend to evade a
lawful restriction."
He added that "the overall purpose of criminal jury instruction
is to provide the law as basic and as simple as possible
containing all the necessary elements." 
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No. 191
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The jury convicted Levy of two counts of second-degree
trademark counterfeiting.  Levy moved to set aside the verdict on
the ground that he could not be convicted for trademark
counterfeiting if the trademarks in evidence did not cover the
specific products allegedly counterfeited.  The trial court
denied the motion, and Levy was sentenced to a conditional
discharge and a $10,000 fine.
The Appellate Division unanimously affirmed.  The court
concluded that the jury charge was proper as it closely tracked
the CJI instruction and "properly conveyed to the jury the
correct principles to be applied in evaluating the evidence
before it" (65 AD3d 1057, 1058 [2d Dept 2009]).  The Appellate
Division also held that the evidence was legally sufficient to
establish Levy's guilt of trademark counterfeiting.  A Judge of
this Court granted leave to appeal, and we now affirm.
The Penal Law defines a trademark as a mark that is
"registered" and "in use" which identifies and distinguishes
goods from those manufactured by others (Penal Law § 165.70 [1]). 
A "counterfeit" mark is simply a "spurious" or "imitation" mark
that is used in the trafficking, sale or distribution of goods
that are "identical with or substantially indistinguishable from"
the genuine article (Penal Law § 165.70, [2]; and "goods" are
defined as "products, services, objects, materials, devices or
substances which are identified by the use of a trademark" (Penal
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No. 191
2The full text of Penal Law § 165.70, as relevant to this
appeal, defines these terms as follows:
"1. The term 'trademark' means (a) any word, name, symbol or
device, or any combination thereof adopted and used by a
person to identify goods made by a person and which
distinguish them from those manufactured or sold by others
which is in use and which is registered, filed or recorded
under the laws of this state or of any other state or is
registered in the principal register of the United States
patent and trademark office . . .
 
"2.  The term 'counterfeit trademark' means a spurious
trademark or an imitation of a trademark that is:
"(a) used in connection with trafficking in goods; and
"(b) used in connection with the sale, offering for
sale or distribution of goods that are identical with
or substantially indistinguishable from a trademark as
defined in subdivision one of this section . . . 
"4.  The term 'goods' means any products, services, objects,
materials, devices or substances which are identified by the
use of a trademark."
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Law § 165.70 [4]).2
  
Levy contends that the evidence was insufficient to
sustain his conviction because allegedly counterfeited goods
seized from his warehouse -- a hubcap cover bearing the "Lincoln
star," for example -- were not protected by a mark that was in
use and registered, and which identified a good.  Levy reasons
that there would be no crime, for example, if someone affixed the
"Ford oval" to a baseball bat: the bat is not "identical or
substantially indistinguishable from a trademark" because Ford
does not use the "Ford oval" on baseball bats, and it therefore
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No. 191
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cannot be "counterfeit" within the meaning of the trademark
counterfeiting statute.  By parity of reasoning, the hub cap
cover bearing the "Lincoln star" cannot be counterfeit because
that particular mark covers cars, structural parts, wheels, and
wheel covers, but not hub caps.
  
Levy's argument is unpersuasive.  As the People
observe, statutory interpretation always begins with the words of
the statute, and New York's trademark counterfeiting statute is
simply not on its face restricted in the way that Levy advocates. 
By contrast, the definition of "counterfeit" under the federal
Trademark Counterfeiting Act does, in fact, reach only those
instances in which the counterfeit mark is used in connection
with the same goods or services as those for which the mark is
registered on the Principal Register at the United States Patent
and Trademark Office, and is in use (see 18 USC § 2320 [e] [1]
[defining "counterfeit mark" as a spurious mark "used in
connection with trafficking in any goods [or] services" and "that
is identical with, or substantially indistinguishable from, a
mark registered . . . and in use" and "that is applied to or used
in connection with the goods or services for which the mark is
registered" [emphasis added]).  But the federal act was adopted
in 1984 to create a criminal sanction for trademark infringement,
which itself requires that the accused infringer use the mark on
the same goods as those for which the mark is registered.
Nonetheless, Levy takes the position that because
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"[p]ortions of the definitions [in New York's statute] were taken
from then-existing federal law" (Donnino, Practice Commentaries,
McKinney's Cons Laws of NY, Book 39, Penal Law § 165.70, at 312-
313), we should interpret the State statute as incorporating the
federal act's identity-of-goods requirement.  But if our
Legislature had intended to impose such a limitation, it could
have done so easily enough by enacting the relevant language of
the federal act in toto.  New York's legislators obviously did
not make that choice, and we decline to make it for them.
As the People point out, the Legislature's decision not
to parrot federal law in this regard and enact an identity-of-
goods requirement may "reflect[] the understanding that the
consumer relies on the mark itself and is not in a position to
know or determine the precise product for which the mark is
registered."  For example, assume that Ford makes brake pads for
all of its cars, but that it expressly does not place the
familiar "Ford oval" on those pads, and therefore does not
register the "Ford oval" trademark for that purpose.  If a
counterfeiter places the "Ford oval" on brake pads, the use of
that mark nevertheless "identifies" the good as a genuine Ford
product; in fact, the lack of registration for that purpose would
seem to be prima facie evidence that the product is, in fact, a
counterfeit since Ford never made or even intended to make that
product bearing that mark.  This is precisely the kind of product
that would deceive a consumer because the mark "identifies" the
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No. 191
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product as a genuine Ford part when it is not.
Moreover, Levy's example of the "Ford oval" appearing
on a baseball bat presumes that a buyer would not consider the
baseball bat to be a genuine Ford product.  With respect to
automotive parts, however, the average purchaser expects any
parts bearing the "Ford oval" to be genuine even if Ford never
placed or intended to place that mark on that particular good. 
Finally, Levy objects to the instructions given by the
trial judge because there was no "knowledge charge."  As the
judge observed, however, it would be impossible to "intend to
evade a lawful restriction" on the sale or distribution of goods
without knowing that those goods were fake.  It was not error for
the judge to decline to instruct the jury further on mens rea
(see Greenberg, New York Criminal Law § 15:29, at 792-793, 6
West's NY Prac Series 2007 [noting that trademark counterfeiting
requires criminal intent, but that knowledge that a good is
counterfeit is only required for simple possession]).  Jurors are
presumed to have sufficient intelligence to make elementary
logical inferences presupposed by the language of a charge, and
defendants are therefore not "entitled to select the phraseology"
to illustrate such inferences (People v Samuels, 99 NY2d 20, 25-
26 [2002]).  Here, the evidence could lead a rational juror to
find beyond a reasonable doubt that Levy intended to evade a
lawful restriction on the sale of goods: the Black & Yellow
warehouse was searched three times for counterfeit Ford parts;
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Ford representatives visited on two other occasions to inventory
counterfeit Ford parts; and Levy agreed to the terms of a
preliminary injunction prohibiting the sale and distribution of
counterfeit Ford parts.
Accordingly, the order of the Appellate Division should
be affirmed.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order affirmed.  Opinion by Judge Read.  Chief Judge Lippman and
Judges Ciparick, Graffeo, Smith, Pigott and Jones concur.
Decided November 18, 2010