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Home > What's New > Cigarmaker Wins Appeal Against Counterfeiter
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Cigarmaker Wins Appeal Against Counterfeiter
Posted: Friday, January 23, 2009
By Jennings Brown
Altadis U.S.A. Inc. won its most recent battle against cigar
counterfeiting when a federal appeals court upheld a Florida cigarmaker's conviction December 17.
A Miami jury had found Juan Jose Penton guilty of three counts of trafficking and attempting to traffic in counterfeit goods. Penton was arrested after he sold a confidential informant and a Miami-Dade County undercover police officer
60 boxes of Cohiba, Partagas, Montecristo, Romeo y Julieta and Hoyo de Monterrey cigars. Each box and label stated that the cigars were made in Cuba.
According to authorities, Penton made the cigars and boxes in his warehouse
in Hialeah, Florida, and grew the tobacco on his estate
in the Dominican Republic.
The Eleventh U.S. Circuit Court of Appeals affirmed Penton's sentence of five years' probation and five months of house arrest, and ordered him to pay a fine of $7,500 and a $300 special assessment for violating the Trademark Counterfeiting Act.
The Miami-Dade Police Department began investigating Penton's operation after receiving information on Penton from Altadis U.S.A., a Fort Lauderdale, Florida–based cigarmaker. The police department also worked with the U.S. Secret Service and the U.S. Postal Inspectors Service to raid and arrest Penton.
Penton's lawyer, Jose Herrera, told Cigar Insider that his client had not sold counterfeit cigars before the sting operation that led to Penton's arrest.
According to Herrera, Penton made his own cigars that he intended to sell under a brand called El Dictador.
Penton also made and sold counterfeit Cuban cigar boxes. Herrera said that the undercover officer and the informant approached Penton and told him that they would only buy his cigars if he labeled and packaged them in the counterfeit boxes.
The Helms-Burton Act, which codified the regulations of the U.S. embargo against Cuba, states that Cuban trademarks cannot be protected in the United States. Penton claimed that U.S. law could not protect the brands he was convicted of counterfeiting since they were trademarked in the embargoed country. However, Altadis U.S.A. and Richmond, Virginia-based General Cigar Co. hold U.S.-registered "parallel trademarks" on most of the counterfeit brands that Penton sold.
Herrera argued that parallel branding is the greater injustice
in this matter. "To develop a Dominican cigar and call it a Montecristo—to create the appearance to the neophytes that they are getting my father's Montecristo—is dishonest," said Herrera. "So who is actually defrauding the consumer?"
The appeals court disagreed with Penton and Herrera's defense. "We are very pleased with the Court's decision," said Eric Workman, Altadis U.S.A.'s senior vice president of marketing and national accounts, in a press release. "The decision clearly confirms that the excuses used by counterfeiters
such as Penton to try to avoid prosecution will not hold water in court."
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