People v. Ebelechukwu

THIRD DIVISION
JULY 28, 2010
No. 1-08-1105
THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. ) No. 07 CR 8843
)
CHUKWUEMEKA EBELECHUKWU, ) The Honorable
) Marcus R. Salone,
Defendant-Appellee. ) Judge Presiding.
JUSTICE COLEMAN delivered the opinion of the court:
The issue we consider on this appeal is whether the Trademark Counterfeiting Act of
1984 (18 U.S.C. §2320(a) (2006)) preempts the State from prosecuting defendant,
Chukwuemeka Ebelechukwu, under the Illinois Counterfeit Trademark Act (765 ILCS 1040/2
(West 2006)).
Defendant was indicted by a grand jury on one count of possessing over 2,000 pairs of
shoes bearing a counterfeit Nike trademark in violation of section 2 of the Illinois Counterfeit
Trademark Act. 765 ILCS 1040/2 (West 2006). Prior to trial, defendant filed a motion to dismiss
the indictment claiming federal legislation preempted defendant's prosecution for trademark
infringement under the Illinois 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 Wireless, LLC, 223 Ill. 2d 1, 15 (2006). Fundamental to our
system of government is the principle that state and federal governments have the inherent power
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"to determine independently what shall be an offense against its authority and to punish such
offenses, and in doing so each is exercising its own sovereignty, not that of the other." People v.
Lewis, 295 Ill. App. 3d 587, 589 (1998), citing United States v. Wheeler, 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 Congress the power to limit the states' exercise of their sovereignty. 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, 112 S. Ct. 2374, 2381 (1992). There are two broad categories of legislative intent:
express and implied. If Congress, when acting within constitutional limits, explicitly mandates
the preemption of state law within a stated situation, no further analysis is required. Gade, 505
U.S. at 98, 120 L. Ed. 2d at 84, 112 S. Ct. at 2383. Absent an expressed intention by Congress to
preempt state law, we may infer preemptive intent in two situations: field preemption and
conflict preemption. Field preemption is implied where the scheme of the federal regulation is
"so pervasive as to make reasonable the inference that Congress left no room for the States to
supplement it." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 91 L. Ed. 1447, 1459, 67 S.
Ct. 1146, 1152 (1947). Conflict preemption arises in two ways: (1) where "compliance with both
federal and state regulations is a physical impossibility" (Florida Lime & 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 creates an obstacle or otherwise impedes the accomplishment and execution of the full
purposes and objectives of federal law (Hines v. Davidowitz, 312 U.S. 52, 67-68, 85 L. Ed. 581,
587, 61 S. Ct. 399, 404 (1941)).
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Where the field that federal legislation is said to have preempted traditionally has been
occupied by the states, we begin with the assumption that the historic police powers of the states
were not to be superseded by federal legislation unless that was "the clear and manifest purpose
of Congress." Rice, 331 U.S. at 230, 91 L. Ed. at 1459, 67 S. Ct. at 1152. The power to prosecute
criminal conduct traditionally has been within the ambit of state authority. People v. Chicago
Magnet Wire Corp., 126 Ill. 2d 356, 367 (1989), citing Knapp v. Schweitzer, 357 U.S. 371, 375,
2 L. Ed. 2d 1393, 1398, 78 S. Ct. 1302, 1305 (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 whether Congress intended the Trademark
Counterfeiting Act (18 U.S.C. §2320(a) (2006)) to preempt the Counterfeit Trademark Act (765
ILCS 1040/2 (West 2006)). Accordingly, we begin by examining the language of the federal
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 Congress in enacting the Trademark
Counterfeiting Act. However, section 2320(a), which codifies trademark infringement as federal
criminal conduct, is not the entirety of federal legislation in the realm of trademarks. Rather, the
Trademark Counterfeiting Act, in section 2320(a), is the criminal parallel to the Lanham Act (15
U.S.C. §1051 et seq. (2000)), a purely civil statute that governs federal regulation of trademarks,
including infringement. See Green v. Fornario, 486 F.3d 100, 102 n.1 (3d Cir. 2007). The
Lanham Act also does not contain an explicit statement of preemptive intent. Having found no
express intention from Congress to preempt state prosecution for trademark infringement, we
proceed to address whether Congress has implied such intent.
Defendant asserts that Congress implicitly intended to occupy the field of trademark
infringement by enacting an abundance of trademark legislation. In support of this argument,
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defendant recites the history of federal legislation beginning in 1881 and continuing through
1999. Defendant also refers to three sections of the Lanham Act as evidence 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 sovereign immunity by the
States and the United States; and section 1127, which recites as one purpose of the Lanham Act
the protection of "registered marks in such commerce from interference by State, or territorial
legislation." 15 U.S.C. §§1121(b), 1122, 1127 (2002). We find defendant's argument
unpersuasive.
The three sections identified by defendant as indicative of a congressional effort to
exclude state law and occupy the field of trademark infringement do not, in this court's view,
present a full-scale federal regulatory scheme of the sort that would support an inference of field
preemption. Indeed, both federal and state courts have consistently interpreted the Lanham Act
and federal trademark legislation as not having "broad preemptive reach." JCW Investments, Inc.
v. Novelty, Inc., 482 F.3d 910, 919 (7th Cir. 2007) (stating that "[i]n the area of trademark law,
preemption is the exception rather than the rule, "the court held that the Lanham Act did not
preempt state-law punitive damages available under the Illinois unfair competition statute);
Attrezzi, LLC v. Maytag, Corp., 436 F.3d 32, 42 (1st Cir. 2006) (holding that the Lanham Act did
not preempt state law remedies in the form of attorney fees and double damages under New
Hampshire's trademark infringement and antidilution statutes); Sporty's Farm L.L.C. v.
Sportsman's Market., Inc., 202 F.3d 489, 500-01 (2d Cir. 2000) (citing a legislative report
indicating that the federal trademark laws dealing with cyber-squatting were not designed to
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preempt state law remedies); Viacom Inc. v. Ingram Enterprises, Inc., 141 F.3d 886, 891 (8th
Cir. 1998) (finding that the Lanham Act does not preempt state antidilution laws because
Congress made federal trademark registration a defense to claims under state antidilution statutes
rather than preempting them); Tonka Corp. v. Tonk-A-Phone, Inc., 805 F.2d 793, 794-95 (8th
Cir. 1986) (holding that the Lanham Act did not preempt recovery of attorney fees under
Minnesota's Deceptive Trade Practices Act). Moreover, the two state courts that have decided
the precise issue here have held that the federal Trademark Counterfeiting Act, embodied in
section 2320, does not preempt state criminal statutes penalizing trademark counterfeiting. See
Commonwealth v. Sow, 2004 PA Super 377, ¶16 (2004); State v. Frampton, 737 P.2d 183, 191
(Utah 1987). Although defendant correctly points out that the Pennsylvania and Utah cases have
merely persuasive value and urges this court to conduct an independent evaluation of the issue,
he makes no attempt to distinguish those cases from the case sub judice. Accordingly, defendant
has failed to demonstrate that the "clear and manifest" intent of Congress 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 consider whether compliance with both the federal law and the state law would
be a physical impossibility, thus preempting the Illinois statute through "conflict preemption."
See Florida Lime & 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
Counterfeiting Act provide for criminal penalties arising from trafficking in counterfeit
trademark goods and services, we fail to see how compliance with both the federal and the state
law would create a physical impossibility. Simply put, comply with both laws by avoiding
trafficking in counterfeit goods.
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Defendant asserts that section 2 of the Counterfeit Trademark Act conflicts with section
2320(a) of the federal Trademark Counterfeiting Act because the federal statute incorporates a
series of affirmative defenses available under the Lanham Act and the Illinois statute contains no
similar list of affirmative defenses.
However, the question posed in conflict preemption is not whether any conceivable
inconsistency exists between the statutes, but whether the state law poses an obstacle or imped-
iment to the accomplishment of the objectives of Congress. The question then becomes whether
section 2320(a) and federal trademark infringement legislation is compromised by the Illinois
law or the Illinois law otherwise conflicts with federal objectives. We find no discernable
conflict.
The Lanham Act was enacted "in order to provide national protection for trademarks used
in interstate and foreign commerce." 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). The Lanham Act itself contains a
statement of intent in section 1127, which 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 registered
marks used in such commerce from interference by State, or
territorial legislation; to protect persons engaged in such commerce
against unfair competition; to prevent fraud and deception in such
commerce by the use of reproductions, copies, counterfeits, or
colorable imitations of registered marks; and to provide rights and
remedies stipulated by treaties and conventions respecting trade-
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marks, trade names, and unfair competition entered into between
the United States and foreign nations." 15 U.S.C. §1127 (2000).
Likewise, the Trademark Counterfeiting Act is not simply an anti-consumer-fraud statute, but
rather, "a central policy goal of the [Trademark Counterfeiting] Act is to protect trademark
holders' ability to use their marks to identify themselves to their customers and to link that
identity to their reputations for quality 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), reprinted 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 trademark
registration scheme or the rights of registered mark holders. At most the Illinois law augments
and supplements the federal scheme by providing criminal penalties for trafficking in counterfeit
goods to which a trademark is attached. See Mead Data Central, Inc. v. Toyota Motor Sales,
U.S.A., Inc., 702 F. Supp. 1031, 1041 (S.D.N.Y. 1988). Rather than impeding congressional
objectives, in fact, the state law furthers the same purposes as the federal statute. Both statutes
are intended to protect trademark holders from misappropriation of their investment and penalize
those individuals who infringe on trademarks by trafficking in counterfeit goods. Consequently,
we find no implied conflict preemption.
A state law is not preempted simply because it seeks to regulate criminal conduct that is
identical to conduct subject to federal regulation. 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 conclude that prosecution thereunder is not preempted.
Therefore, we reverse the trial court's dismissal of the indictment and remand for further
proceedings.
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Reversed and remanded.
MURPHY, P.J., and QUINN, J., concur.
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