Counterfeiting Law Ruled Unconstitutional by Pa. Supreme Court

The Pennsylvania Supreme Court has struck down the state's trademark counterfeiting law, concluding that it is unconstitutionally overbroad.

The dissenters in the 4-3 decision said the law should not be deemed unconstitutional merely because the drafters used clumsy grammar.

"This decision may pave the way for the Pennsylvania Legislature to act quickly to revise Pennsylvania's trademark counterfeiting statute," said attorney Sam Apicelli of Duane Morris in Philadelphia, who is not involved in the case.

Apicelli noted, however, that the state Senate considered a proposed amendment of the language in 2007 but has not taken any action since then.

The Supreme Court's ruling came in its review of two consolidated criminal cases.

One defendant was charged with violating the trademark counterfeiting statute by allegedly selling counterfeit Nike sneakers; the other was arrested for selling hats bearing the Penn State logo.

The cases represent the first time that the state Supreme Court has been asked to review the counterfeiting law, although in 2000 a lower court concluded that the language of the statute was constitutionally overbroad because it criminalized any use of a trademark without the express permission of the owner.

Arguing in support of the statute, the state asserted that the law was not overbroad because it was limited to those people with the intent to sell or distribute items with counterfeit trademarks.

The state maintained that the law did not reach a substantial amount of constitutionally protected speech.

The defendants argued that by criminalizing the mere "use" or "display" of items bearing a counterfeit mark and defining a mark to include "any term or word," the statute was unconstitutionally overbroad.

Under the plain words of the counterfeiting statute, the defendants argued, even the brief they submitted to the court violated the letter of the law because it contained the unauthorized reproduction of the words Nike and Penn State.

The defendants' argument won the day.

The Supreme Court rejected the state's argument that the limiting phrase "with intent to sell or distribute" applied to the entire list of verbs included in the statute, including "use" or "display."

Grammatically, the court said, the phrase only applied to a person who "possesses" a counterfeit item.

The high court acknowledged that the legislative intent behind the statute was to prohibit the deceptive, unauthorized use of a trademark for profit, not to prohibit the use of trademarked words in constitutionally protected speech.

Nonetheless, "the plain language of the statute as written prohibits a much broader range of uses of trademarks, many of which involve constitutionally protected speech," the court said.

"Taken to the extreme," the justices said, "even our use of the words 'Nike' and 'Penn State' in this opinion without the permission of the company or the university would fall under the current definition of a counterfeit mark."

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