McCree v. State

WATTS, J. We decide whether Maryland’s trademark counterfeiting statute, Md. Code Ann., Crim. Law (2002, 2012 Repl. Vol.) (“CR”) § 8-611—which prohibits, among other things, the willful display of goods that have “retail value” and bear a counterfeit mark—is facially overbroad or facially void-for-vagueness. Analyzing CR § 8-611’s plain language, we hold that CR § 8-611 is neither facially overbroad nor facially void-for-vagueness. ⁸ BACKGROUND The State, Respondent, charged Bernard Delaney McCree, Jr. (“McCree”), Petitioner, with numerous crimes, including violating CR § 8-611.

In the Circuit Court for Queen Anne’s County (“the circuit court”), McCree moved to dismiss the charges for violating CR § 8-611 on the ground that CR § 8-611 is unconstitutional, arguing that the statute is facially overbroad and facially void-for-vagueness. The circuit court denied the motion to dismiss. At trial, a trooper of the Maryland State Police testified that, during a traffic stop of a vehicle that McCree had been driving, 206 DVDs were found in the vehicle. Dennis Supik, an investigator with the Content Protection Office of the Motion Picture Association of America, testified as an expert in the field of the identification of counterfeit DVDs that all 206 DVDs contained “numerous counterfeit marks” and thus were “counterfeit reproductions” of movies on DVD.

On his own behalf, McCree testified that he was a licensed vendor whom the State had authorized to sell the DVDs; McCree denied that he had manufactured the DVDs or that he knew whether the DVDs were counterfeit. A jury convicted McCree of violating CR § 8-611. The circuit court sentenced McCree to ten years’ imprisonment, with all but one year suspended, for the violation of CR § 8-611, consecutive to other sentences, followed by three years of supervised probation. McCree appealed, and the Court of Special Appeals affirmed.

See McCree v. State, 214 Md.App. 238 , 76 A.3d 400 (2013). McCree filed a petition for a writ of certiorari which this Court granted. See McCree v. State, 436 Md. 501 , 83 A.3d 779 (2014). DISCUSSION I. McCree contends that CR § 8-611 is facially over-broad because it criminalizes conduct that the Free Speech Clause of the First Amendment to the United States Constitu ⁹ tion protects.

Specifically, McCree argues that CR § 8-611 broadly applies to the display or distribution of goods (such as signs or pamphlets) that include trademarked words or labels, terms, devices, designs, or words that are not registered with any government entity. McCree asserts that CR § 8-611 is substantively identical to a previous version of Pennsylvania’s trademark counterfeiting statute, which the Supreme Court of Pennsylvania struck down as overbroad. The State responds that CR § 8-611 is not facially overbroad because it applies only to goods that a defendant intends to sell, and thus is distinguishable from the previous version of Pennsylvania’s trademark counterfeiting statute. In reply, McCree contends that CR § 8-611 applies to goods that a defendant displays or distributes, even if the defendant does not intend to sell the goods; and, alternatively, even if CR § 8-611 applies only to goods that a defendant intends to sell, the Free Speech Clause protects such commercial speech.

An appellate court reviews without deference a trial court’s conclusion as to whether a statute is unconstitutional. See generally Corbin v. State, 428 Md. 488, 498 , 52 A.3d 946, 951 (2012) (“[W]e review the ultimate question of constitutionality de novo[.]” (Citation omitted)). In interpreting a statute, a court first considers the statute’s language, which the court applies where the statute’s language “is unambiguous and clearly consistent with the statute’s apparent purpose[.]” State v. Weems, 429 Md. 329, 337 , 55 A.3d 921, 926 (2012) (citation omitted). An overbroad statute criminalizes conduct that the Free Speech Clause of the First Amendment to the United States Constitution 1 protects.

See Grayned v. City of Rockford, 408 U.S. 104, 114-15 , 92 S.Ct. 2294 , 33 L.Ed.2d 222 ¹⁰ (1972) (“A clear and precise enactment may nevertheless be ‘overbroad’ if in its reach it prohibits constitutionally protected conduct.... The crucial question ... is whether the ordinance sweeps within its prohibitions what may not be punished under the First ... Amendment ].” (Footnote omitted)). Even if a statute is not overbroad as applied to a particular defendant’s actions, the defendant may contend that the statute is facially overbroad “because of a judicial prediction or assumption that the statute’s very existence may” chill third parties’ speech.

Hill v. Colorado, 530 U.S. 703, 731-32 , 120 S.Ct. 2480 , 147 L.Ed.2d 597 (2000) (citation omitted). Such a facial challenge succeeds if and only if “the statute is substantially overbroad”—i.e., there is “a realistic danger that the statute [] will significantly compromise” third parties’ speech. N.Y. State Club Ass’n, Inc. v. City of New York, 487 U.S. 1, 11 , 108 S.Ct. 2225 , 101 L.Ed.2d 1 (1988) (citation and internal quotation marks omitted); see also United States v. Williams, 553 U.S. 285, 292 , 128 S.Ct. 1830 , 170 L.Ed.2d 650 (2008) (“[A] statute’s overbreadth [must] be substantial ... relative to the statute’s plainly legitimate sweep.” (Citations and emphasis omitted)). CR § 8-611 states, in relevant part: (a) Definitions.—(1) In this section the following words have the meanings indicated.

(2) “Counterfeit mark” means: (i) an unauthorized copy of intellectual property; or (ii) intellectual property affixed to goods knowingly sold, offered for sale, manufactured, or distributed, to identify services offered or rendered, without the authority of the owner of the intellectual property. (3) “Intellectual property” means a trademark, service mark, trade name, label, term, device, design, or word adopted or used by a person to identify the goods or services of the person. (4) “Retail value” means: ¹¹ (i) a trademark counterfeiter’s selling price for the goods or services that bear or are identified by the counterfeit mark; or (ii) a trademark counterfeiter’s selling price of the finished product, if the goods that bear a counterfeit mark are components of the finished product. (5) “Trademark counterfeiter” means a person who commits the crime of trademark counterfeiting prohibited by this section.

(b) Prohibited.—A person may not willfully manufacture, produce, display, advertise, distribute, offer for sale, sell, or possess with the intent to sell or distribute goods or services that the person knows are bearing or are identified by a counterfeit mark. (c) Penalty—Value at least $1,000.—If the aggregate retail value of the goods or services is $1,000 or more, a person who violates this section is guilty of the felony of trademark counterfeiting^] (d) Penalty—Value less than $1,000.—If the aggregate retail value of the goods or services is less than $1,000, a person who violates this section is guilty of the misdemean- or of trademark counterfeiting^] (g) Evidence of trademark or trade name.—State or federal registration of intellectual property is prima facie evidence that the intellectual property is a trademark or trade name. (Emphasis added). Reviewing CR § 8-611 and the applicable authorities, we conclude that CR § 8-611 is not facially overbroad.

Read in its entirety, CR § 8-611 criminalizes the “display [or] distribution of] goods ... that ... bear[ ] or are identified by a counterfeit mark[,]” CR § 8-611(b), only if the goods have “retail value[.]” CR § 8—611(c), (d). Specifically, by their plain language, the penalty provisions delineate that, “[i]f the aggregate retail value of the goods ... is $1,000 or more, [the defendant] is guilty of [a] felony[,]” CR § 8-611(c), and, “[i]f the aggregate retail value of the goods ... is less than $1,000, ¹² [the defendant] is guilty of [a] misdemeanor®” CR § 8-611(d). “Retail value” means a “selling price®” CR § 8-611(a)(4)®, (ii). In other words, CR § 8-611 does not criminalize the display or distribution of goods that have no retail value and are not meant to be sold. Accordingly, CR § 8-611 does not criminalize conduct that the Free Speech Clause indisputably protects—for example, the mere display of signs or distribution of pamphlets.

Our conclusion is supported by the doctrine of noscitur a sociis (“it is known from its associates”), under which “the meaning of a word is ... known from the accompanying words so that ... general and specific words, capable of analogous meaning, when associated together, take color from each other, so that general words are restricted to a sense analogous to less general®” Emmert v. Hearn, 309 Md. 19, 25 , 522 A.2d 377, 380-81 (1987) (citation omitted). CR § 8-611 criminalizes the “manufacture, production], display, advertise[ment], distribution], offering] for sale, [sale], or possession] with the intent to sell or distribute goods or services that [a defendant] knows are bearing or are identified by a counterfeit mark.” CR § 8-611(b). Six of the eight types of conduct that CR § 8-611 criminalizes—manufacture, production, advertisement, offering for sale, sale, and possession with the intent to sell or distribute—directly relate to commercial acts or purposes. Viewed in context with these six other types of conduct, “display” and “distribute” obviously also relate to commercial acts or purposes.

Indeed, in another statute, titled “Infringement,” that, like CR § 8-611, protects trademarks (specifically, by establishing an express private right of action for the misappropriation of trademarks), “display” is one of multiple types of conduct that directly relate to commercial acts or purposes. See Md. Code Ann., Bus. Reg. (1992, 2010 Repl.

Vol.) (“BR”) § 1^14(c) (“A [trademark’s] registrant may sue to enjoin the display, manufacture, sale, or use of a reproduction or colorable imitation of a mark of the registrant.” (Emphasis added)); see also Mid S. Bldg. Supply of Md., Inc. v. Guard ¹³ ian Door and Window, Inc., 156 Md.App. 445, 460 , 847 A.2d 463, 471-72 (2004) (In a trademark infringement case, under BR § 1-414, “the moving party must show ... that the defendant’s use of the mark occurred in commerce!.]” (Citations omitted)). Simply put, it would lead to an incongruous result to interpret “display” and “distribute” to relate to noncommercial acts or purposes (such as the mere display of signs or distribution of pamphlets) where the six other types of conduct that CR § 8-611 criminalizes directly relate to commercial acts or purposes. A court must give a statute “a reasonable interpretation, not one that is absurd, illogical[,] or incompatible with common sense.” Walker v. State, 432 Md. 587, 615 , 69 A.3d 1066, 1083 (2013) (citation and internal quotation marks omitted).

We reject McCree’s contention that CR § 8-611 applies to goods that a defendant does not intend to sell. In support of his contention, McCree points out that CR § 8-611(b) (the subsection that prohibits trademark counterfeiting) does not mention “retail value.” In attempting to downplay the significance of CR § 8-611(c) and (d) (the penalty provisions, which incorporate “retail value”), McCree essentially asks us to disregard the rule of statutory interpretation that a court considers a “statutory scheme in its entirety rather than segmenting the statute and analyzing only its individual parts.” Haile v. State, 431 Md. 448, 470 , 66 A.3d 600, 612-13 (2013) (citations and internal quotation marks omitted). We decline to disregard this well-established rule. That CR § 8-611(c) and (d) are penalty provisions does not change the circumstance that they are part of CR § 8-611, and must be considered in interpreting CR § 8-611. 2 In support of his contention that CR § 8-611 applies to goods that a defendant does not intend to sell, McCree relies ¹⁴ on the circumstance that the bill file of Senate Bill 410, 1996 Reg.

Sess., 1996 Md. Laws Ch. 582 (“Senate Bill 410”)—which became Md.Code Ann., Art. 27 § 48A, which is CR § 8-611’s predecessor—contains copies of trademark counterfeiting bills from California and North Carolina. 3 Specifically, McCree points out that, in drafting CR § 8-611’s predecessor, the General Assembly chose not to use language from the trademark counterfeiting bills from California and North Carolina. California’s trademark counterfeiting bill would apply only to “willfully manufacturing], intentionally selling], or knowingly possessing] for sale” a counterfeit mark. S.B. 862, 1993-1994 Reg. Sess., 1993 Cal.

Legis. Serv. Ch. 703. North Carolina’s trademark counterfeiting bill would apply only to counterfeit marks on goods that are “intended for sale[.]” H.B. 311, 1995 Reg.

Sess., 1995 N.C. Laws Ch. 436. To be sure, in drafting CR § 8-611’s predecessor, the General Assembly chose not to use specific language from the trademark counterfeiting bills from California and North Carolina. That said, the General Assembly did not need to include such language; instead, the General Assembly drafted CR § 8-611’s predecessor so that it (like CR § 8-611) applied only to goods that had a “selling price[J” Md.Code Ann., Art. 27 § 48A(A)(4)(I), (II); CR § 8-611(a)(4)(i), (ii). Plainly put, CR § 8-611 is not overbroad simply because the General Assembly did not copy-and-paste the trademark counterfeiting bills from California and North Carolina. ¹⁵ McCree’s contention that CR § 8-611 is substantively identical to a previous version of Pennsylvania’s trademark counterfeiting statute, which the Supreme Court of Pennsylvania struck down as overbroad in Commonwealth v. Omar, 602 Pa. 595 , 981 A.2d 179, 189 (2009) is not persuasive.

The previous version of Pennsylvania’s trademark counterfeiting statute criminalized the “display! ]” or “distribution]” of “items” that bore, 18 Pa. Cons.Stat. § 4119(a) (1996), “[intellectual property ... without the authority of the owner of the intellectual property.” 18 Pa. Cons.Stat. § 4119(i) (1996). Nothing in the previous version of Pennsylvania’s trademark counterfeiting statute, including its penalty provision, required an intent to sell or a selling price.

See 18 Pa. Cons.Stat. § 4119(c)(1) (1996) (“Except as provided in paragraphs (2) and (3), a violation of this section constitutes a misdemeanor of the first degree.”). By contrast, as discussed above, CR § 8-611 applies only to goods that have a “selling price[.]” CR § 8-611(a)(4)(i), (ii). Tellingly, since Omar, 602 Pa. 595 , 981 A.2d 179 , Pennsylvania’s legislature has amended Pennsylvania’s trademark counterfeiting statute so that it applies only where a defendant “inten[ds] to sell or to otherwise transfer for purposes of commercial advantage or private financial gain[.]” 18 Pa.

Cons.Stat. § 4119(a) (2010). The parties are correct in agreeing that CR § 8-611 applies to labels, terms, devices, designs, or words that are not registered with any government entity. It is accurate that nothing in CR § 8-611 requires that the labels, terms, devices, designs, or words at issue be registered with any government entity. Indeed, CR § 8-611(g) (“State or federal registration of intellectual property is prima facie evidence that the intellectual property is a trademark or trade name.”) indicates that the labels, terms, devices, designs, or words at issue need not be registered with any government entity.

That said, we disagree with McCree’s position that CR § 8-611 is facially overbroad because it applies to unregistered labels, terms, devices, designs, or words. In assessing McCree’s contentions concerning vagueness, the Court of Special Appeals determined that, “[s]ubsections (a)(3) and (g), ¹⁶ taken together, convince us that a fair reading of the statute is that a person’s use of a ‘term’ or ‘word’ is criminally actionable [ ] if the word or term used has been registered or is subject to registration by a third party.” McCree, 214 Md.App. at 256 , 76 A.3d at 410 . This point is equally well taken in an overbreadth analysis. At the federal level, 15 U.S.C. § 1051 (a)(3) provides that, in an application for use of a trademark, the applicant must specify that, among other things, “the person making the verification believes that he or she ... to be the owner of the mark sought to be registered[,]” and that “to the best of the verifier’s knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such person, to cause confusion, or to cause mistake, or to deceive^]” Similarly, BR § 1-406(c)(8) provides that an application for registration of a mark must contain a statement that “the applicant owns the mark[,]” “another person does not have the right to use the mark in the State[,]” and “the mark is not deceptively similar to a mark that another person has a right to use in the