RETAILER JAILED

JURY RETURNS GUILTY VERDICT IN FLORIDA CIGAR COUNTERFEITING CASE

A Florida jury returned a guilty verdict on Wednesday, October 1, 2008 in State of Florida v. James David Joiner, pending in the Circuit Court of the Seventeenth Judicial Circuit, Broward County, Florida, Case No. 06-2201CF10A (Rodriguez-Powell).

The jury found the defendant had violated the federally registered U.S. trademarks of Altadis U.S.A. by vending goods with counterfeit trademarks. After the jury’s verdict was announced, the defendant was immediately remanded into custody and is currently in county jail awaiting sentencing on Monday, October 6, 2008 at 8:30 am.

Altadis U.S.A. considers Joiner’s conduct to be particularly egregious especially since Joiner’s retail store had been a direct buying account of Altadis U.S.A. for many years. “Consumers expect a high level of quality from our cigar brands and a level of trust and professionalism from their tobacconist,” said an official of Altadis U.S.A., the world’s largest manufacturer of cigars. “When retailers knowingly sell inferior counterfeit cigars they not only break the law, they violate that trust.”

“Obviously we are pleased with the outcome of the case,” stated a key Altadis U.S.A. executive. “There was a fair trial and a jury has applied the law and found the defendant guilty of illegally vending counterfeit cigars. The cigars were not made by Altadis U.S.A. but illegally bore trademarks owned by our company. Such conduct must be stopped as it clearly defrauds consumers.”

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

The verdict is yet another in a series of actions that have taken place in recent years as part of an on-going aggressive campaign by federal, state and local officials to halt cigar counterfeiting. This conviction sends an important note to retailers: sales of counterfeit cigars will not be tolerated. It confirms the message Altadis U.S.A. has been conveying for years to those who retail, distribute and/or produce counterfeit cigars:

Any unauthorized use of Altadis U.S.A.’s trademarks is illegal.

Labeling cigars “Habana” or “Cuban replica” does not make them legal.

Individuals who participate in the retail sale, distribution or manufacture of counterfeit cigars will be held personally liable for their counterfeiting activities.

“This was an important victory for Altadis U.S.A., its distributors, legitimate retailers and the entire industry,” said the Altadis U.S.A. executive. “It is also a major victory for our consumers, because it protects the consumer from unknowingly purchasing counterfeit and inferior products. Altadis U.S.A. remains committed to ensuring that the company’s trademarks are only associated with the cigars it produces under the high standards of quality for which they are known. In today’s competitive world, protecting brand names and trade designs is critical.”



NOTICE TO THE TRADE

Altadis U.S.A. is strongly committed to vigorous enforcement of its trademark rights and will seek criminal prosecution of anyone who would violate those rights. Altadis U.S.A. continues to work with local, state and federal law enforcement officials to use anti-counterfeiting laws to secure convictions of counterfeiters of our brands.

If we learn that any importer, distributor, retailer or other member of the Trade is dealing in counterfeit cigars or cigar packaging of our brands, we will proceed against them 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 U.S.A. up to $1 million in statutory (non-compensatory) damages per counterfeited mark, as well as their attorney’s fees. We have been awarded damages and attorney’s fees of $1 million to $3.5 million in such cases.

Altadis U.S.A. also continues to work successfully with U.S. Customs to arrange for the seizure and destruction of shipments of counterfeit cigars and packaging materials. Any retailer who has paid for cigars that turn out to be counterfeits and are thus seized by officials should be aware that in such circumstances they will find themselves without recourse. Counterfeiters do not refund monies paid nor are they in a position to make good with legitimate product with the quality and prestige of Altadis U.S.A.’s brands. Additionally, Altadis U.S.A. reserves the right to cancel as direct accounts those parties who trade in counterfeit cigars.

Altadis U.S.A.’s premium cigar brands include, among others: Montecristo, H. Upmann, Romeo y Julieta, Trinidad, Don Diego, Santa Damiana, Cabañas, Por Larrañaga, La Corona, Saint Luís Rey and Quintero.

We caution the Trade against engaging in illegal activity in violation of our rights in any of our brands and ask you to inform us immediately if you receive solicitations for products that violate such rights.