Guilty Verdict in Cigar Counterfeiting Case

Jury: trademark violations against Altadis, General Cigar

MIAMI -- A federal jury returned a guilty verdict today in U.S. v. Juan Penton, a criminal counterfeiting case pending in the U.S. District Court for the Southern District of Florida (case number: 06-20169 CR-MORENO).

The jury found the defendant had violated the federally registered U.S. trademark rights of Altadis USA Inc. and General Cigar Co. Inc.

Obviously we're pleased with the outcome of the case, said Theo Folz, president and CEO of Altadis USA. There was a fair trial and the jury has applied the law and found the defendant [image-nocss] guilty of illegally using trademarks owned by Altadis USA and others on counterfeit cigars.

Industry experts estimate that annually the cigar counterfeiting problem involves the sale of hundreds of millions of dollars of fake and inferior products to unsuspecting consumers, said the company.

The verdict is yet another in a series of actions that have taken place over the past year as part of an ongoing aggressive campaign by federal, state and local officials to put a halt to cigar counterfeiting, Altadis added. This conviction sends an important note to counterfeiters: counterfeiting will not be tolerated. It reconfirms the message Altadis USA has been conveying to those who produce, distribute and/or sell so-called Cuban replica' cigars: Any unauthorized use of Altadis USA's trademarks is illegal. Labeling cigars Habana' or calling them Cuban replicas' does not make them legal. Individuals who participate in the manufacture, distribution or sale of Cuban replica' cigars will be held personally liable for their counterfeiting activities.

This was another important victory for Altadis USA and its distributors and consumers, as well as the entire industry, said Folz. In today's competitive world, protecting brand names and trade designs is critical for the successful marketing of brands, particularly those that have established a loyal following. Altadis USA remains committed to ensuring that Altadis USA's trademarks are only associated with the cigars it produces under the high standards of quality for which they are known.

Altadis USA said that it is strongly committed to the vigorous enforcement of its trademark rights and will seek criminal prosecution of anyone who would infringe those rights. It said that it will continue to work with state and federal law enforcement officials to use anti-counterfeiting laws to secure convictions of counterfeiters of its brands.

If we learn that any importer, distributor, retailer or other member of the trade is dealing in counterfeit cigars or cigar packaging, we will proceed against the offender aggressively through civil and/or criminal channels. In addition to criminal prosecution, in appropriate cases, we will invoke the civil provision of the federal trademark law that allows courts to award trademark owners like Altadis USA up to $1 million in statutory (noncompensatory) damages per counterfeited mark, as well as their attorney's fees. We have been awarded damages and attorney's fees of $1 million to $2.25 million in such cases, the company said.

Altadis USA said that it also will continue to work with U.S. Customs to arrange for the seizure and destruction of shipments of counterfeit cigars and packaging materials. Members of the trade who have paid for cigars that turn out to be counterfeits and are thus seized by U.S. Customs should be aware that in such circumstances they will find themselves without recoursecounterfeiters do not refund monies nor are they in a position to make good with legitimate product.

Fort Lauderdale, Fla.-based Altadis USA's brands include Montecristo, H. Upmann, Romeo y Julieta, Trinidad, Don Diego, Santa Damiana, Cabanas, Por Larra aaga, La Corona, Saint Luis Rey and Quintero.

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