Almost everything in the world sells at auction; auctioneers sell almost everything — that is almost … Today, we look at some items which may or may not be able to be sold at auction.
Take a look at this $1,000 Federal Reserve Note. In fact, it’s not a $1,000 Federal Reserve Note at all, but rather a forgery, counterfeit, replica, reproduction, copy, knockoff, and/or fake — largely depending upon the intent of the person who made such representation and the reasonable understanding of the ordinary purchaser.
Let’s look at these terms as they possibly relate to this not-really-$1,000-bill:
Forgeries involve the process of making, drawing, or altering something (often a document) with the intent to defraud. The forger is guilty if the writing or altering is done without the authorization of the original maker.
Counterfeits are products that are essentially identical to another product, and thereby infringe upon the trademark of that product trademark owner. The original product trademark owners can take action to protect their rights. Also known as “fake.” We previously wrote about counterfeit property here: https://mikebrandlyauctioneer.wordpress.com/2016/09/14/auctioneers-selling-counterfeit-property/
Replicas can be considered counterfeits if they are identical to other products, but likely not an issue if the product only resembles another product. Here, the reasonable understanding of the ordinary purchaser could be the deciding factor.
Reproductions are copies of something which either resembles or is very much like the original. Here too, the reasonable understanding of the ordinary purchaser could be the deciding factor.
Knockoffs are products that resemble other items, but are not exactly identical. Typically here, the reasonable understanding of the ordinary purchaser would be that they can plainly see this is not the original maker’s item. Possibly — but not likely — actionable by the original maker.
In summary, auctioneers should avoid selling (nor act as an agent for a seller) counterfeit, forged and/or fake property. On the other hand, auctioneers can (and do) sell replicas, reproductions and knockoffs so long as there is no intent to deceive and the ordinary purchaser would have a reasonable understanding that this property is a replica, reproduction and/or knockoff.
As long as the subject property is not a forgery nor counterfeit, and there is adequate disclosure of the true makeup (and no misrepresentation) of the subject property (for example, “These are knockoffs …”) auctioneers/sellers are largely safe from liability.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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