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Fake 5-hour ENERGY lawsuit marks first criminal indictment of counterfeiters.

Summary: The Northern District of California has recently issued criminal indictments and executed arrest warrants for 10 members of a counterfeiting network that flooded the nation ...

The Northern District of California has recently issued criminal indictments and executed arrest warrants for 10 members of a counterfeiting network that flooded the nation with millions of bottles of fake 5-hour ENERGY, marking the first-ever U.S. criminal prosecution stemming from a food/beverage counterfeiting operation.

Nutritional supplements, foods and beverages are unfortunately counterfeited all of the time. But, the criminals that sell these potentially dangerous products consider it a low-risk, high-profit business and when they are caught they are surprised.

This operation was discovered and shut down over five years ago, but this indictment marks a dramatic shift in U.S. District Attorneys' approach to handling counterfeit food products, which have the potential to pose significant public health risks.

Geoffrey Potter, lead counsel to 5-hour ENERGY and chair of the Anti-Counterfeiting practice at Patterson Belknap Webb & Tyler LLP in New York, sat down with InsideCounsel to discuss how to handle counterfeit litigation.


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"We are very pleased that the U.S. Attorney took action here with the ultimate deterrent, prison, where these individuals won't have much need for 5-hour ENERGY. This case is of monumental importance--it's the first-ever U.S. criminal indictment relating to a food counterfeiting matter. Unfortunately, it may not be the last, as we are seeing rampant counterfeiting across many industries," he explained.

In the past, federal prosecutors have avoided these cases because of the difficulty of proving that the sellers knew that the goods were counterfeit. 5-hour ENERGY, brought a civil anti-counterfeiting action and caught these counterfeiters manufacturing the counterfeits in San Diego.

So, what does this mean for the food and beverage industry?

Many will misunderstand this prosecution as a sign that the government is protecting their brands and consumers. "That is exactly wrong," said Potter. The fact that this is a first, is a reminder that the only effective way to protect your product from counterfeiting is to do it yourself, according to Potter. Fortunately, the U.S. has extraordinary civil anti-counterfeiting laws that if skillfully used lets a brand owner effectively stop counterfeiting.

"In this case, the putrid behavior of these individuals endangered the lives of tens of thousands of consumers," said Potter. "It is important to note that the counterfeits were removed from stores years ago, and because of 5-hour ENERGY's aggressive efforts, today only high quality, authentic 5-hour ENERGY product can be found in retail stores."

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Publication:Inside Counsel
Geographic Code:1U9CA
Date:Jun 26, 2015
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