The fight against the proliferation of counterfeit goods in Puerto Rico has been escalating in recent months, with the latest round taking place last week when local and federal law enforcement officials conducted seizures of knock-offs of nearly 20 brands sold by a handful of retailers that now face thousands of dollars in fines for violating copyright laws.
Several sweeps took place throughout the island headed by the Justice Department’s Office of Monopolistic Affairs, or OMA, which conducting an investigation into unfair competitive practices. Raids took place in stores in Fajardo, Ponce, Yabucoa, Hatillo, and Bayamón.
Law enforcement officials hauled away bags with counterfeit handbags, sunglasses, and jewelry copies of items originally sold by Tous, Folli Follie, Michael Kors, Coach, Louis Vuitton, Cartier, Bulgari, Chanel, Tori Burch, Furla (Candy Bag), Guess, Lacoste, Nautica, Techno-Marine, Nixon, G-Shock, Niky, Tom-Tom, Ray Ban, Oakley, and others. The confiscated goods had a value of about $84,000, officials said.
The OMA proceedings mostly resulted from complaints presented by Tous and Folli Follie, represented in Puerto Rico by attorney Dora M. Peñagarícano, of the McConnell Valdés law firm, which last year also represented pop artist Romero Britto in his war against fakes of his colorful line of goods.
“The stores selling the counterfeit items, in addition of violating the intellectual property rights of the named designers, have not been paying the corresponding sales and use tax to the Treasury Department. These acts are repeated by hundreds of sellers for the commissions that each one of these stores get,” said Peñagarícano.
The businesses the government intervened with last week were Stilo In, Koketa Boutique, Chic-K Fashion, Karteras Levittown y Karteras Hatillo. Shop owners were issued penalties in the amount of $5,000 per each trademark infringement and were summoned to appear in court.
“Since each store was infringing between 10 and 22 trademarks, the penalties per store range between $50,000 and $110,000. In Puerto Rico, the original Tous items are only sold at the eight Tous stores and the original Folli Follie items are only sold at Kury jewelers in Plaza Las Américas and in Ponce,” the attorney said.
Since July, the OAM has received several complaints and confidences from retailers who are being affected by unfair competition and piracy by others. The agency has signed 29 agreements transaction with retailers investigated for counterfeiting, collecting more than $15,000 in fines. Bureau of Special Investigations and Treasury agents assisted in the raids.
“The state has to ensure the protection of rights, including intellectual property. We have come across retailers who are involved in selling items in clear violation of these rights, to gain a competitive advantage that is clearly unjust and unfair,” said Jesús Alvarado-Rivera, deputy secretary of the OAM. “In several instances, we found merchandise hidden behind false walls.”