THIRD DI VISI ON JULY 28, 2010

No. 1-08-1105

THE PEOPLE OF THE STATE OF IL LI NOIS, ) Appeal from the

) Circuit Court of Plaintiff-Appellant, ) Co ok Co un ty. ) v. ) No. 07 CR 8843 ) CHUKWUEMEKA EBELECHUKWU, ) The Honorable ) Marcus R. Salone, Defendant-Appellee. ) Judge Presi ding.

JUSTICE COLEM AN delive

red the o pinion of t

he court : The issue we consider on this appeal is whether the Tra demark Counterfeiting Act of 1984 (18 U .S.C. §2320 (a) (20 06)) pre empts the S tate from prosec uting de fendant , Chukwueme

ka Ebele chukwu, u

nder the Illinois Counter

feit Tra demark Act (765 I

LCS 104 0/2 (West 2006)). Defendant was indicted by a grand jury

on one count of possessing over 2,000 pairs of shoes bea ring a c ounterf

eit Nike t radema rk in viola

tion of se ction 2 of

the I llinois Coun

terfeit Tradema rk Act. 7 65 IL

CS 1040/2 (We st 2006). Pr ior to tria l, defen dant file d a motion to

dismiss the indictment claiming federal legislation pree mpted defendant's prosecution for trade mark infringement under the I llinois statute. The trial court granted defendant' s motion and dismissed the indictment. This appeal followed. Whether a state law is preempted by federal legislation is a question of law, which we review de novo

. Kinkel v. Cingular W ireless, L LC, 223 Ill. 2d 1, 15 (2006). Fundamental to our system of gove

rnment is the principle that state and federal gove rnments have the inherent power1-08-1105

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"to determine independently what shall be an offense aga inst its authority and to punish such offenses, and in doing so ea ch is exerci sing its own sovereignty, not th at of the oth er." People v. Lewis, 295 Ill. App. 3 d 587, 589 (1 998), citi ng United Sta tes v. W heeler, 435 U.S. 313, 320, 55 L. Ed. 2d 303, 310, 98 S. Ct. 1079, 1084 (1978). The supremacy clause of the United States Constitution

grants Congre ss the pow er to limit t he state s' exerc ise of the ir sover eignty . U.S. Const., art. VI, Cl. 2. The extent to which federal legislation preempts state law is essentially a matter of legislative intent. Gade v. National Solid Wastes Management Ass'n, 505 U.S. 88, 96, 120 L. Ed. 2d 73, 83, 1 12 S. Ct. 2374 , 2381 (19 92). The re are two broa d categ ories of

legisla tive inten t: express and implied. If Congress, whe n acting within constitutional limits, explicitly mandates the preemption of state law within a stated situation, no further analy sis is required. Gade, 505 U.S. at 98, 120 L. Ed. 2d at 8 4, 112 S. Ct. a t 2383. Abs ent an expr

essed int ention by Congre ss to preempt state law, we may infer preemptive intent in two situations: field preemption and conflic t preemp tion. Fie ld preem ption is impl ied wher

e the scheme of th e feder

al reg ulation is "so per vasive a s to make r

easonab le the inf

erence that Cong

ress lef t no room f

or the Sta tes to supplemen t it." Rice v. Santa Fe Elevator Corp., 331 U.S. 21 8, 230, 91 L . Ed. 1447, 1459, 67 S. Ct. 1146, 11 52 (1947) . Conflict preempt ion arise s in two wa

ys: (1) whe

re "compliance

with both federal and st ate regulation s is a physical imp ossibil ity" ( Florida Lim e &

Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 10 L. Ed. 2d 248, 257, 83 S. Ct. 1210, 1217 (1963)); or (2) where state law create s an obsta

cle or ot herwise impedes the accom

plishment a

nd executi on of the f

ull purposes and objectives of federal law ( Hines v. Davidowit

z, 312 U.S. 52, 67-68, 85 L. Ed. 581, 587, 61 S. Ct. 399, 404 (1941)).1-08-1105

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Where the field that federal legislation is said to have pre empted traditionally has bee n occupied by the

states, we begin with the assumption that the historic police powers of the states

were no t to be supe

rseded by f

ederal legisla tion unles s that was

"the cl ear and

manifest purpose of Congress." Rice, 331 U.S. a t 230, 91 L . Ed. at 14 59, 67 S. Ct. a t 1152. The

power to prosecu te criminal conduct traditionally ha s been within the ambit of state authority. People v. Chicago Magnet Wire Corp. , 126 Ill . 2d 35 6, 367 (1989 ), cit ing Knapp v. Sc hweitzer, 357 U.S. 371, 375, 2 L. E d. 2d 1393, 1398, 78 S. C t. 1302, 13 05 (1958) ; Patterson v. New York, 432 U.S. 197, 201, 53 L. Ed. 2d 281, 287, 97 S. Ct. 2319, 2322 (1977). The instant case requires that we determine whe ther Congress intended the Trademark Counterfeiting Act (18 U.S.C. §2320(a) (2006)) to pree mpt the Counterfeit Trademark Act (765 IL CS 1040/2 (West 2006)). Accordingly , we begin by examining the language of the f ederal statute at issue to discern congressional intent. Nothing in section 2320(a ) refers to state law at all or explicitly states any preemptive intention by Cong ress in enacting the Trademark Counterfeiting Act. However, section 2320(a ), which codifies trademark infringe ment as federal criminal conduct, is not the entirety of federal legislation in the realm of trade marks. Rather, the Trademark Counterfeiting Act, in section 2320(a ), is the criminal parallel to the Lanha m Act (15 U.S.C. §1051 et seq. (2000)) , a purel y c ivil statute

that gov erns fe deral r

egulat ion of tra demarks , including infringement. See Green v. Fornario, 486 F.3d 100, 102 n.1 (3d Cir. 2007). The Lanham Act also does not contain an e xplicit statement of preemptive intent. Having found no express intention from Congress to preempt state prosecution for tradema rk infringement, we procee d to addre ss whethe r Congr ess has imp lied such

intent. Defendant asserts that Congress implicitly intended to occupy the

field of trademark infring ement by

enactin g an ab undance of trade mark leg islation. I n support o f this arg

ument,1-08-1105

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defend ant rec ites t he his tory of fed eral l egisla tion beginn ing in 1881 a nd con tinu ing th rough 1999. Defendant also refers to three se ctions of the Lanham Act as e vidence of congressional intent to exclude state legislation in this area: section 1121(b), which provides that no State may require alteration of a registered mark or marks additional to those contemplated by "the registered mark as exhibited in the certificate of registration issued by

the United States Patent and Trademark Office" ; section 1122, which contains a waiver of sovereig n immunity by

the States and the United States; and section 1127, which recites as one purpose of the Lanham Act the protection of "registered ma rks in such commerce from interferenc e by State, or ter ritorial legislation." 15 U.S.C. §§1121(b), 1122, 1127 (2002). We find defendant' s argument unpersuasive. The thre e sections identif ied by defenda nt as indic ative of

a cong ressiona l effort to exclude state law and occupy the field of trademark infringement do not, in this court' s view, present a full-sc ale fed

eral re gulator

y sc heme of t he sort th at would su

pport an i nferen ce of fi eld preemption. Indeed, both fede ral and state courts have consistently interpreted the Lanha

m Act and federal trad emark legislat ion as not h aving "broad preem ptive reach." JCW Investments, Inc

. v. Novelty, Inc., 482 F.3d 910, 919 (7th Cir. 2007) (stating that "[i]n the area of trademar k law, preemption is the exception rather than the rule, "the court he ld that the Lanham Act did not preempt state-law punitive damages ava ilable under the Illinois unfair competition statute); Attrezzi, LLC v. Maytag, Corp., 436 F.3d 3 2, 42 (1st C ir. 2006)(holding that the Lanham Act did not preempt state law remedies in the form of attorney fees and double damages under New Hampshir e's tra demark i nfring ement an

d antidilut

ion statute s); Sporty's Farm L.L.C. v. Sportsman's Market., Inc., 202 F.3d 489, 500-01 (2d Cir. 2000) (citing a legislative r eport indicatin g that th e feder

al trade mark law s dealing

with cy ber-squ atting w ere not d

esigne d to1-08-1105

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preempt state law remedie s); Viacom Inc. v. Ingram Enterprises, Inc., 141 F.3d 8 86, 891 (8 th Cir. 1998)

(finding that the Lanham Act does not preempt st ate antid ilution law s becaus e Congress made federal trade mark registration a defense to cla ims under state antidilution statutes rather than pre empting

them); Tonka Corp. v. Tonk-A-Phone, Inc., 805 F.2d 7 93, 794-9 5 (8th Cir. 1986) (holding that the Lanham Ac t did not preempt recovery of attorney f

ees under Minnesota's Deceptive Trade Prac tices Act). Moreover, the two state courts that have de cided the prec ise issue here hav e held tha t the fed eral Tr ademar k Counter

feiting Act, embo died in section 2320, does not preempt state criminal statutes penalizing trademark counte rfeiting. See Commonwealth v. Sow

, 2004 PA Supe

r 377, ¶16

(2004); State v. Frampton , 737 P.2d 183, 191 (Utah 1987). Although defendant corre ctly points out that the Pennsy lvania and Utah cases have merely per

suasive value and urges this court to conduct an indepe ndent evaluation of the issue, he makes no attempt to distinguish those cases from the case sub judice. Accordingly , defendant has faile d to demons trate tha t the "c lear an

d manife st" inten

t of Cong ress was to comprehensively

control all aspects of the trademark field. See Rice, 331 U.S. at 230, 91 L. Ed. at 1459, 67 S. Ct. at 1152. Next, we c onsider w

hether c omplianc e with both the fede ral law a nd the sta te law wo uld be a physica

l impossibility, thus preempting the I llinois statute through "conflict preemption." See Florida Lim e &

Avocado Growers, Inc., 373 U.S. at 142-43, 10 L. Ed. 2d at 248, 83 S. Ct. at 1217. Since both the Illinois statute section 2 and section 2320(a) of the federal Trademark Counterf eiting A ct provid

e for cr iminal penalties ar

ising fr om traff icking i n counter feit tradema rk good s and ser

vices, w e fail to s ee how c omplianc e with both the fede ral and t he state law would create a physical impossibility. Simply put, comply with both laws by avoiding trafficking in counterfeit goods.1-08-1105

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Defendant asserts that section 2 of the Counterfeit Tra demark Act conflicts with section 2320(a)of the fe deral Tr

ademar k Counter

feiting Act bec ause the

federa l statute i ncorpor ates a series of affirmative defenses ava ilable under the Lanham Ac t and the Illinois statute contains no similar lis t of affi

rmative d efense s. Howeve r, the que stion pose d in confl ict pree mption is not

whether any conceiv able inconsistency exists between the statutes, but whether the state law poses an obstacle or impediment to the accomplishment of the objectives of Congress. The question then bec omes whether section 2 320(a) a

nd feder al trade mark infr ingeme nt legis lation is c ompromise d by the I llinois law or the Illinois law otherwise c onflicts w ith fede ral obje ctives. We

find no dis cernab le conflic t. The Lanham Act wa s enacted "in order to provide national protec tion for trademarks used in interst ate and foreign co mmerce." Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 193, 83 L . Ed. 2d 582 , 587, 105 S. Ct. 658, 661 (1985). T he La nham Act i

tself con tains a

statemen t of intent in section

1127, whic

h states: "The intent of this Act is to regulate commerce within the control of Congress by

making actionable the deceptive and misleading use of marks in such commerce; to protect re gistered marks used in such commerce from interfere nce by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and de ception in such commerce by

the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rig hts and remedies stipulated by tre aties and conventions respecting trade-1-08-1105

7 marks, trade names, and unfair competition entered into betwe en the United States and foreign nations." 15 U.S.C. §1127 (2000). Likewise, the Tradema

rk Counterfeiting Act is not simply a n anti-consumer-fraud statute, but rather, "a central policy

goal of the [Trademark Counterfeiting] Act is to protect tra demark holders' ability to use the ir marks to identify themselves to their c ustomers and to link that identity to thei r reputatio ns for quali ty goods and services. " United States v. Torkington, 812 F.2d 1347, 1353 (11th Cir. 1987), citing S. Rep. No. 98-526, at 1-2, 4-5 (1984), reprinte d in U.S.C.C.A.N. 3627-28, 3630-31 and H.R. Rep. No. 997, at 5-6. The Counterfeit Trademark Act in no way interferes with the federal tradema rk regist ration sc heme or t he righ ts of registered mark holde rs. At most

the I llinois law

augmen ts and supple

ments the f

ederal scheme by pr

oviding c riminal pe

nalties f or traff icking i n counter feit goods to which a trademark is attached. See Mead Dat a Central, I

nc. v. Toy ota Motor S

ales, U.S.A., Inc., 702 F. Supp. 1031, 1041 (S.D.N.Y. 1988). Rather than impeding congr essional objectives, in fact, the state law furthers the same purpose s as the federal statute. Both statutes are i nten ded to pro tect

trad emar k hold ers f rom mi sappropr

iation of their i

nves tment

and p enal ize th os e i nd iv id ua ls wh o i nf ri ng e o n t ra de ma rk s b y tr af fi ck in g i n c ou nt er fe it go od s. Co ns eq ue nt ly, we find no implied conflict preemption. A state la w is not pre empted sim

ply because it seeks to

regula te criminal conduc

t that is identical to conduct subject to federal reg ulation. See Chicago Magnet Wire Corp. , 126 Ill. 2d at 371. Without evidence of Congress's intention, express or implied, to preempt state prosecution under the Counterfeit Trademark Act, we c onclude that prosecution thereunder is not preempted. Therefore, we reverse the trial court's dismissal of the indictment and remand for furthe r procee dings.1-08-1105

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Reversed and remanded. MURPHY, P.J., and QUINN, J., concur.