56:3-13.16 Action for trafficking in counterfeit marks; remedies.

2. a. Subject to the provisions of section 13 of P.L.1966, c.263 (C.56:3-13.13), and with respect to a mark registered pursuant to this act and a mark protected at common law, any person who engages in the conduct specified in paragraphs (1) and (2) of this subsection shall be liable in a civil action by the owner or the designee of the owner of the mark for any or all of the remedies provided in subsections d., e. and f. of this section, except that under paragraph (2) of this subsection, the owner or designee shall not be entitled to recover profits or damages unless the conduct has been committed with the intent to cause confusion or mistake or to deceive.

(1) The use, without consent of the owner or designee, of any reproduction, counterfeit, copy, or colorable imitation of a mark in connection with the sale, distribution, offering for sale, or advertising in this State of any goods or services on or in connection with which the use is likely to cause confusion or mistake or to deceive as to the source of origin of the goods or services; or

(2) The reproduction, counterfeiting, copying or colorable imitation of a mark and the application of a reproduction, counterfeit, copy or colorable imitation of a mark to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with the sale or other distribution in this State of the goods or services.

b. The action shall be brought in the Superior Court of the county in which the defendant resides, is found, has an agent, transacts business, or in which the reproduction, counterfeit, copy or imitation of the mark is found.

c. (1) The plaintiff in the civil action shall establish violation of subsection a. of this section by a preponderance of the evidence. A jury trial shall be available at the request of either party. (2) If the Attorney General determines that the sale or distribution of goods or services related to the conduct specified in paragraph (1) or (2) of subsection a. of this section poses a threat to the health, safety or welfare of any member of the public, the Attorney General may intervene in a pending civil action filed by the owner or designee of the owner of a mark pursuant to subsection a. of this section in order to enforce the remedies provided in subsection d. or e. of section 1 of P.L.2004, c.150 (C.56:3-13.22).

d. In an action brought pursuant to subsection a. of this section, the court may grant temporary restraining orders and injunctions, as may be deemed just and reasonable by the court, to prevent any conduct described in paragraphs (1) and (2) of subsection a. of this section, and may require the defendants to pay to the owner or designee of the owner all profits derived from or all damages suffered by reason of such conduct, or both. The court may also order that any reproduction, counterfeit, copy or imitation in the possession or under the control of any defendant in the case be disposed of or destroyed in accordance with the provisions of section 3 of P.L.1987, c.454 (C.56:3-13.17). The court, in its discretion, may enter judgment for an amount not to exceed three times the profits or damages and may also award reasonable attorneys' fees and costs of suit to the prevailing party in cases where the court finds the other party committed the wrongful acts with knowledge or in bad faith or if the court finds the other party's conduct so egregious as to justify such an award. In assessing defendant's profits, plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed therefrom. In an action in which the Attorney General successfully intervenes in order to enforce the remedies provided in subsection d. or e. of section 1 of P.L.2004, c.150 (C.56:3-13.22)), the defendant also shall be liable to the State for the costs of the suit, including reasonable attorney's fees, costs of investigation and litigation.

e. Upon finding a violation of subsection a. of this section, the court may, in its discretion, award prejudgment interest on the monetary recovery awarded under subsection d. of this section, at an annual interest rate established pursuant to Rule 4:42-11 of the Rules Governing the Courts of the State of New Jersey, commencing on the date of the service of the plaintiff's pleadings which set forth the claim for monetary recovery and ending on the date the judgment is awarded or for a shorter time as the court deems appropriate.

f. Any provisional or equitable remedy that would be available in a comparable civil action commenced under the federal Trademark Act of 1946, 15 U.S.C. s.1051 et seq. may, to the same extent and upon a comparable showing, be made available to a party in an action commenced under this section, subject to the conditions and requirements imposed by the Civil Practice Rules of the Rules Governing the Courts of the State of New Jersey.

g. (Deleted by amendment, P.L.1995, c.171.)

h. In any civil proceeding brought under this section relating to the manufacture, use, display or sale of a counterfeit mark, in addition to the remedies available to an owner as provided in subsections d., e. and f. of this section, the court shall have jurisdiction to prevent and restrain the manufacture, use, display or sale of a counterfeit mark by issuing appropriate orders, including, in appropriate circumstances, an ex parte temporary restraining order without a seizure, or an ex parte order without notice for the seizure of counterfeit goods and the following materials:

(1) Spurious marks;

(2) The means of making the spurious marks;

(3) Articles in the defendant's possession bearing the spurious marks, or on or in connection with which the spurious marks are intended to be used;

(4) Business records documenting the manufacture, purchase or sale of counterfeit marks. Any business records seized through an ex parte seizure order under this subsection shall be taken into the custody of the court. The applicant or its representatives shall not be permitted to see these records during the course of the search or thereafter, except under an appropriate protective order, issued on notice to the person from whom the business records were seized, with respect to confidential business information.

i. Ex parte seizure orders under subsection h. of this section shall not be issued unless the applicant:

(1) Provides an affidavit clearly setting forth specific facts in support of the need for the seizure order, and

(2) Provides security in an amount as the court deems adequate for the payment of damages as any person may suffer as a result of a wrongful seizure or wrongful attempted seizure of his property under subsection h. of this section. These damages shall include but not be limited to lost profits, the cost of materials, and loss of good will. In any case in which it is shown that the applicant caused the seizure without adequate evidence that the goods or materials were counterfeit, damages shall include reasonable attorney's fees.

(3) The court shall place under seal any order for an ex parte seizure under subsection h. of this section, together with the papers upon which the order was granted, until the party in possession of the goods or materials has been given an opportunity to contest the order. j. No order for an ex parte seizure under subsection h. of this section shall be issued unless the court finds that a temporary restraining order on notice to the defendant or an ex parte temporary restraining order would be inadequate to protect the applicant's interest. In particular, no court shall issue an order for an ex parte seizure under subsection h. of this section unless it clearly appears from specific facts offered under oath or affirmation that:

(1) Counterfeit goods or the materials described above are located at the place identified in the affidavit;

(2) The applicant will suffer immediate and irreparable injury, loss or damage if the goods or materials are not seized through execution of an ex parte order, in that:

(a) The person from whom the goods or materials are to be seized would not comply with an order directing him to retain the goods or materials and to make them available to the court, but would instead make the goods or materials inaccessible by destroying, hiding or transferring them; or

(b) The person from whom the goods or materials are to be seized will otherwise act to frustrate the court in a proceeding under this section; and

(3) The applicant has made no effort to publicize the requested seizure and will refrain from doing so until the party in possession of the goods and materials has been given an opportunity to contest the order.

k. An order for a seizure under subsection h. of this section shall particularly describe the goods or materials to be seized, the place from which they are to be seized, and the amount of security provided by the applicant.

l. The court shall set a hearing date not more than 10 court days after the last date on which seizure is ordered at which any person from whom goods are seized may appear and seek release of the seized goods.

m. Except where the court authorizes the Attorney General to make the seizure in a matter in which the Attorney General has intervened in accordance with paragraph (2) of subsection c. of this section, where an order for seizure is made, the court shall direct the sheriff of the county in which the property is located to make the seizure or, where the property to be seized is located in more than one county, the direction shall issue to the sheriff of each of those counties. The sheriff shall make the seizure within 72 hours of the order.

L.1987,c.454,s.2; amended 1995, c.171, s.10; 2004, c.150, s.2.