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27 April 2017Trademarks

Man gets seven years in prison over counterfeit energy drinks

Walid Jamil, a member of an operation that sold counterfeit versions of energy drink 5-Hour Energy, was sentenced to seven years in prison yesterday.

Jamil was also sentenced to an additional three years of supervised release and ordered to pay more than half a million dollars in tion by District Judge Lucy Koh at the US District Court for the Northern District of California, San Jose Division.

In June 2015, the US Department of Justice (DoJ) charged the counterfeiting ring with conspiracy to traffic in counterfeit goods, to commit criminal copyright infringement, and to introduce misbranded food into interstate commerce.

The operation was shut down in 2012 and the fake drinks are now out of circulation.

The group of 11 had been selling counterfeit bottles of 5-Hour Energy, a “shot” which contains no sugar, four calories and “as much caffeine” as a cup of coffee.

Jamil participated in the scheme by hiring a printing company to design and print cardboard boxes that mirrored authentic 5-Hour Energy products and by providing authentic bottle sleeves to be illegally reproduced.

Midwest Wholesale Operators, owned by Jamil, distributed more than four million bottles of counterfeit drinks between May 2012 and October 2012, according to the DoJ in its indictment.

The DoJ said the defendants had set up an illegal factory in San Diego that repackaged more than 350,000 bottles of fake bottles and sold them for a price that was 15% lower than the genuine products.

It also said that the defendants had mixed unregulated ingredients in plastic vats in an unsanitary facility and used untrained workers.

From 2011 to 2012 the defendants ordered more than seven million counterfeit label sleeves and “hundreds of thousands” of fake display boxes, according to the indictment.

Living Essentials, the manufacturer of the drink, owns trademarks for the term ‘5-Hour Energy’ at the US Patent and Trademark Office, as well as copyright for graphical elements on the products’ labelling.

In December last year, husband and wife Joseph and Adriand Shayota were found guilty of running the operation.

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1 December 2016   A jury at a California district court has found two US citizens guilty of illegally selling counterfeit versions of energy drink 5-Hour Energy, which is manufactured by Living Essentials.