January 16, 2024 - BY Admin

Protecting Assets and Intellectual Property

By Kelly Riddle

The United States has been a world leader in developing new products, designing everything from purses and apparel to high-end technology. Unfortunately, when you are successful, others will zoom in to try to duplicate your success. This is why patent and trademark attorneys go through a rigorous process to insure that these trade secrets, logos, assets, intellectual property and merchandise are legally protected.

The process seems relatively straightforward and simple. A person or company comes up with a new idea. They pay for research and product development, often utilizing the talents of engineers and other experts. As the product and brand is pushed forward, attorneys file the appropriate legal documents to protect this new business treasure.

Along the way in this seemingly simple process, the brand and merchandise is copied and some of the anticipated profits and return on investments get hijacked. As a result, protection of the trademark, logos and merchandise is becoming an increasingly larger part of the private investigation industry.


Whether sold via the Internet or at sidewalk stands on New York's famous Canal Street, the harm to the U.S. economy from IP theft is substantial. The Commission on the Theft of American Intellectual Property says the annual losses range from about $225 billion to $600 billion. Counterfeit goods cost the United States $29 billion to $41 billion annual; pirated software costs an additional $18 billion a year.[1]

While most countries have some trade in counterfeit goods, some have become notorious for producing and exporting large quantities of fakes. Information from the customs services of the United States and EU Member States provides an insight into which countries are the biggest exporters of fakes and the types of products that are being counterfeited.

For private investigators, working closely with all levels of law enforcement is an absolute necessity. It is common to find someone involved in counterfeiting and trademark infringement with tentacles reaching to other countries. Since this is a criminal activity, other types of criminal enterprises are often associated with this element.

Depending on the scope of the investigation, we may start off working with local law enforcement and, due to the sheer monetary figures involved, may end up partnering with federal agents. Typically a private investigator’s client in these types of cases is the company (Gucci, Ray ban, etc.) or the law firms that represent these entities.

Many times a private investigator is hired because the company has seen a trend, received an anonymous tip or has developed other information that leads them to believe a specific geographic area is a hotspot for this activity. The investigator is given the task of intelligence gathering to verify these leads or suspicions. Should there be some credibility to the information, the PI will generally reach out to law enforcement and develop a task force mentality. A game plan is developed and the criminal elements are pursued.


Before moving forward, the company hiring the investigator will usually provide some training materials that outline what a legally registered trademark, logo and product looks like. They will often provide examples and further training regarding common “fakes” or look-alike products and how to quickly distinguish the two. Many of the fakes or “knock-offs” are actually “seconds,” meaning quality control spotted something that caused the item to be rejected as legitimate product. There is an increasing number of knock-off products that are not seconds and are purposely manufactured as fake.

The economics of knock-off products are plain and simple and is based on the economic principle of supply and demand. As long as consumers keep buying the fake products, and many buy them knowing they are not an original, then the demand is present. As an investigator, logic would dictate that if you see a product that normally sells for $300 “on sale” for $85, it is probably a knock-off.
The sale of knock-off items is often done at flea markets, discount stores and street vendors. Large crates are shipped into the U.S. Due to the volume, these peddlers get the items at rock bottom prices. They then resell them on the streets.

A game plan should be outlined that would include the private investigator being the person to identify the items as counterfeit by inspecting merchandise at a suspect venue. Few law enforcement agencies will have this training available, and the PI will therefore be instrumental in determining if the items are in fact knock-offs.

If the PI determines that there are enough fake products to warrant involvement by law enforcement, the PI should discretely exit the area where a briefing can be conducted with all officers involved. Once it is agreed to move forward, the PI should return to the vendor and purchase at least one item to document that they are actually selling the products. At least one law enforcement officer should be in a position to observe this transaction.

Once the purchase of the item is completed, the PI should exit the main entrance of the flea market or store and telephone the detective in charge of the operation. The detective can then order the team to move in and identify themselves as law enforcement officers to the vendor. The money in the cash register should be reviewed to further prove the purchase was made by matching the money to “buy” money previously recorded. An inventory should then be conducted and the items seized and placed into law enforcement holding. As a side note, be prepared by bringing a box of large garbage bags or cardboard boxes that can be used to package the seized items.

The private investigator should have a working knowledge of the criminal and civil statutes that may be involved in these types of cases. In the majority of cases, the criminal charges will be made based on state statutes but federal laws may come into play based on the circumstances.

For instance, in Texas, a penal code violation has occurred if “a person intentionally manufacturers, displays, advertises, distributes, offers for sale, sells, or possesses with intent to sell or distribute a counterfeit mark or an item or service that (a) bears or is identified by a counterfeit mark (b) the person knows or should have known bears or is identified by a counterfeit mark.”[2]

The statute outlining Trademark Counterfeiting identifies a counterfeit mark as “a mark that is identical to or substantially indistinguishable from a protected mark the use of which is not authorized by the owner of the protected mark.”[3]

While many state and federal laws are similar, a working knowledge is critical to fully utilize the tools available. In addition to criminal statutes, the PI should also understand that the case may have civil ramifications as well. The manufacturer has the right to file civil litigation against the peddlers for economic losses. In most cases there is a distinction made between an “infringement” and a “counterfeit”. The counterfeit product is an absolute violation of the trademark and logo of the company. Simply put, the peddler intentionally copied the logo and used it in an unauthorized manner. An infringement is where they attempted to alter or mislead the buyer by implying that it is an original but without exactly copying the logo. This would usually fall under the infringement statutes.


Each brand, logo and trademark is protected to insure the merchandise meets the rigid standards set forth by the company. This company or entity, such as the NFL, has entered into contracts with manufacturers and producers of apparel such as Nike, Reebok, etc. For these companies to utilize the logos, team names and trademarks of the NFL, they pay the NFL prearranged fees. The entity (in this case the NFL) has to enforce adherence to their trademark and copyrighted materials to insure companies like Nike and Reebok have a protected product line. Without this enforcement, the licensing fees paid to the NFL would be worthless.

As in other criminal cases, such as drugs, the producer and supplier is what law enforcement officers ultimately try to obtain. If they can get to the supply chain a larger impact can be made on the criminal activity. Likewise, if the private investigator can obtain the cooperation of the vendor to determine where they get their merchandise a sting operation, surveillance and additional investigative techniques can be utilized to catch the larger criminal. Due to the close relationship that is required between law enforcement and private investigators, companies hiring PIs often require the PI to have prior law enforcement experience with good contacts within the law enforcement community.

The bulk of counterfeit merchandise flows into the U.S. through the main ports in New York, Miami, Houston and Los Angeles. Although New York is a distribution channel, the other ports pass more of the merchandise into the wider distribution channels. It also stands to reason that the trail of counterfeit merchandise is often tracked back to these areas.

The enforcement of trademarked products, logos and copyrighted material is an increasing area of private investigations. While law enforcement is often brought into the case, resources are being pulled in an array of areas, making the PI’s role even more essential.

[1] Associated Press, Feb. 27, 2017 [2] Section 32.23 Trademark Counterfeiting of the Texas Penal Code [3] Section 32.23 Trademark Counterfeiting of the Texas Penal Code

Kelly E. Riddle is the President of Kelmar and Associates Investigations ( as well as a certified member of the Texas Association of Licensed Investigators (