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Cedillo Bill Would Allow Donation of Confiscated Counterfiet Goods to Homeless Shelters

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Sen. Gilbert Cedillo introduced SB 324 on Friday which would enable the donation of confiscated counterfeit goods, such as shoes and clothing, to organizations serving homeless and indigent with the trademark owner's consent.

The underground market for counterfeit goods is sizable and growing rapidly. In 2007 U.S. Customs officials alone seized $197 million in counterfeit goods, up 27% from the previous year. The County Economic Development Corporation estimates about $2 billion worth of counterfeit goods are sold annually in Los Angeles County alone.

Under current law upon conviction those items must be destroyed. In some instances items have been donated by the Los Angeles City Attorney's office to organizations serving the homeless with the permission of the trademark owners. The organizations taking possession of counterfeit goods go to great lengths to ensure the items do not re-enter commerce by removing tags and imprinting the pieces with an indelible stamp. However there is a reluctance to continue this practice because the statute calls for destruction regardless of trademark owner's consent and there is not sufficient case law to guide the protocol for donating goods.

"We simply do not have the funds to purchase the clothing, jackets, shoes, socks and other basic goods that are so desperately needed. We rely on the generosity of donors but the demand is so great right now, there is never enough to fill the need," shared Ruth Schwartz, executive director of Shelter Partnership, Inc. in downtown Los Angeles.

An estimated 150,000 individuals and families are homeless on any given night in the state. This number will likely grow in the next two years because of job loss and the impact of home foreclosures. Many homeless use emergency shelters and transitional housing for sleeping quarters, food, and other basic necessities. These agencies face severe funding cuts under the new state budget and the possibility of increased donations in the form of clothing, shoes, bedding, toothbrushes and other personal care items are welcomed.

There is also an environmental benefit to non-commercial redistribution of the items. Landfills are already at capacity and the destruction of goods adds to the immense waste in our communities.

"We are pleased to work with our sponsor Shelter Partnership on a proposal to assist the most vulnerable members of the community. SB 324 will help ease the pain of lost state funding by providing actual goods to be distributed among homeless and indigent. We'll create a legal and transparent means for trademark owners to authorize donation of confiscated goods and keep additional waste out of our landfills," said Cedillo.

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