In the most rewarding new industries, there is often a convergence of factors that make them lucrative and sustainable. Factors like the emergence of new technologies, a ripening of the consumer market, or a political climate that spawns laws and regulations that give a particular business model oomph can revolutionize an industry. Over the last two decades, the counterfeit cigar industry in the United States saw all three of these factors converge to create the perfect storm of the illicit trades market.
It began in the 1960's as the trade of authentic Cuban cigars was banned in the United States. This immediately created a situation in which there was a consumer demand for a product that was all but inaccessible through conventional retail channels. More recently, the explosion of computer and printing technology has allowed for the easy duplication of cigar boxes, labels and seals of authenticity. Finally, the growing popularity of cigars over the last fifteen years has fueled a consumer market that is eager to get its hands on any kind of Cuban cigar possible.
In this environment, producing counterfeit cigars is all but the perfect business move. Add to this fact that the punishment in the U.S. for this type of counterfeiting is among the most minimal for illicit, black-market crimes, and the reward seems well worth the risk.
Altadis, USA has consistently been a prime target for counterfeiters with the reputation of its ubiquitous cigar lines. Montecristo, Romeo y Julieta, and H. Upmann are all among the most notoriously spoofed cigar lines in the United States, and Altadis is beginning a major crackdown.
On March 25th, 2005, Altadis, USA was awarded $3.5 million in counterfeiting and trademark infringement against two Florida corporations. The corporations have now been disbanded. In addition to the damages, the counterfeiters were ordered to recall their entire product line including promotional and packaging material and deliver it to Altadis for destruction. The participants in the two corporations are also permanently enjoined from employing graphics that are confusingly similar to trademarks within the Altadis cigar line.
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