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United States v. Lozano

490 F.3d 1317 (2007)

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United States v. Lozano

United States Court of Appeals for the Eleventh Circuit

490 F.3d 1317 (2007)

Facts

In 2004, law-enforcement authorities conducted undercover purchases of counterfeit cell phone parts from retailers in Miami. The parts originated from Suplimet Corporation, a US wholesale distributor of cell phone parts. Subsequently, the police searched the Miami warehouse of Suplimet and recovered 85,000 pieces of counterfeit cell phones. Herman Lozano, the owner of Suplimet, and his brother Xavier (defendants), were indicted for trafficking in counterfeit goods. The Lozanos sold the counterfeit goods mostly in Latin America, though they sold counterfeit goods in the United States as well. The counterfeit parts were indistinguishable from the trademarked goods they imitated. A presentence report calculated the loss attributed to the Lozanos’ counterfeit activity at over $10 million. On the basis of this calculation, the presentence report recommended a sentence of 70 to 87 months for each of the Lozano brothers. The Lozanos objected to the recommendation. They argued that because the primary market they sold the counterfeit items in was Latin America rather than the United States, the loss to the trademark holders was substantially less than the presentence report’s calculation. They maintained that the calculation for the total loss amount, and consequently the recommended sentence, should reflect the market in which the goods were offered for sale. The district court disagreed and used the retail value of the goods in the US market to determine the infringing amount for purposes of sentencing. The court also stated that, based on other sentencing factors, it would have imposed the same sentence even if the loss had been determined by the Latin American market. The Lazanos appealed.

Rule of Law

Issue

Holding and Reasoning (Stagg, J.)

Concurrence (Carnes, J.)

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