As trademark and copyright counterfeiting and piracy has grown, courts have become more willing to grant meaningful relief to rights owners and to penalize counterfeiters and those who facilitate their illicit activities. For example, for many years courts have held that landlords and operators of flea markets may be contributorily liable in civil cases for their tenants’ sale of counterfeit products. Recently, in United States v. Jack Frison, the Court of Appeals for the Eighth Circuit affirmed the conviction of a flea market operator for aiding and abetting copyright infringement and the trafficking in counterfeit goods, and for conspiracy to commit offenses against the United States. The conviction resulted in a two-year prison sentence, which was upheld on appeal.
Jack Frison Sr., the defendant in the case, asserted that the criminal laws under which he was convicted, imposing penalties for conspiracy, for aiding and abetting copyright infringement in violation of 17 U.S.C. § 506(a)(a)(A) and 18 U.S.C. § 2319(b)(1) and (2), and for aiding and abetting the trafficking in counterfeit goods in violation of 18 U.S.C. §§ 2329(a), (b)(1) and 18 U.S.C. § 2, were unconstitutionally vague, claiming that he did not have notice that his behavior was criminal. The facts belied that assertion, however.
Frison owned the Frison Flea Market, where he rented booths to vendors. He derived income by charging rent for the booths and by charging customers a $1 entry fee. Many vendors sold counterfeit goods and pirated music and movies. Over a period of nearly ten years, Frison received repeated warnings from the local police, the Recording Industry of America, the Department of Homeland Security and Customs Enforcement, and the Better Business Bureau. He was also the defendant in a suit for trademark counterfeiting brought by Coach, after which Frison required the vendors who sold counterfeit COACH purses to pay him a $500 fine to offset his legal expenses. The failure to pay the fine would result in the vendor being expelled from the market, but Frison continued to permit vendors to sell merchandise containing counterfeit trademarks other than COACH. Eventually, law enforcement agents posing as a potential vendor interested in renting a booth at Frison’s market from which to sell counterfeit iPhones proved to be his undoing. Based on evidence obtained through the undercover investigation, a federal search warrant was executed at Frison’s market at which agents seized approximately 10,000 counterfeit purses, 60,000 counterfeit movie DVDs and 50,000 counterfeit music CDs. The retail value of this merchandise, had it been authentic, was more than $20 million. The agents also seized documents showing that Frison was involved in running the day-to-day activities of the flea market, that he met regularly with his vendors, and that he was well-aware of their sale of counterfeit products: he charged vendors who sold counterfeit products additional rent for protection against the police.
A statute is void for vagueness if it “(1) ‘fails to provide a person of ordinary intelligence fair notice of what is prohibited,’ or (2) ‘is so standardless that it authorizes or encourages seriously discriminatory enforcement.’” Here, the court found that Frison was actively involved in running his flea market. He also received many notices that his conduct in operating his flea market was unlawful. The evidence showed that he knew that his tenants were acting contrary to the law, and actively helped to facilitate the unlawful conduct to his and his tenants’ financial benefit. The Court accordingly found the challenged statutes to be constitutional, and affirmed Frison’s conviction and two-year prison sentence.
Although this case is a particularly egregious example of a landlord assisting his tenants in the sale of counterfeit products, the threat of a meaningful prison sentence may get the attention of owners of flea markets and other premises where the sale of counterfeit products is prevalent, and provide rights holders and law enforcement with a useful tool in reducing the availability of counterfeit and pirated merchandise at these venues.