United States v. Donald Cone, 714 F.3d 197

Cone and Zhao were convicted at a joint trial for trafficking in counterfeit Cisco goods and related counts arising from a counterfeit Cisco scheme.
JDC Networking, Inc. imported Cisco-branded goods from Han Tong (China/Hong Kong) including genuine and counterfeit items, some misdeclared or altered.
In 2010 CBP/ICE intercepted counterfeit Cisco labels and devices, leading to searches at Zhao’s home and a storage unit with substantial Cisco-branded equipment.
The government asserted multiple theories of counterfeiting, including pure counterfeit labels, material alteration of genuine goods, and mislabeling to defeat warranties.
The district court admitted and argued about Bruton issues, hearsay emails, and a challenged material-alteration theory, and the jury returned mixed verdicts.
On appeal, the Fourth Circuit vacated Zhao’s Count 9 (and related counts 27–29) and Zhao’s Count 10 for insufficiency, vacated sentences, and remanded for resentencing; Cone’s conspiracy conviction remained, but sentencing was remanded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether material alteration is cognizable under § 2320	Government contends material alteration fits § 2320 as counterfeiting.	Defendants argue material alteration is not defined by § 2320 and not criminal.	Material alteration theory not cognizable under § 2320.
Effect of ruling on Count 9 and related counts	Count 9 supported by material alteration theory.	Count 9/related counts invalid under the narrowed interpretation.	Zhao’s Count 9 vacated; Counts 27–29 vacated; remanded for resentencing.
Sufficiency of Count 10 evidence	Evidence showed repackaging of genuine Cisco goods.	No proof that the marks on the Vology transceivers were counterfeit; repackaging alone insufficient.	Count 10 insufficient; vacated.
Conspiracy conviction support after invalid Count 9/alteration theory	Conspiracy convictions may rest on independent bases.	Jury verdicts rely on improper theory; potentially invalid.	Conspiracy convictions affirmed for both Cone and Zhao based on independent bases; remanded for sentencing due to noncriminal acts under theory.
Harmlessness of e-mails and closing arguments	Emails show notice; closing arguments argued alteration theory.	Improper closing arguments taint verdict,
requiring reversal.	E-mails admitted for notice; closing argument error deemed harmless for Count 8 findings; however, the alteration-argument issue prompted a separate dissenting view on Count 8.

United States v. Lam, 677 F.3d 190 (4th Cir. 2012) (defines ‘spurious mark’ and analyzes § 2320(a) elements)
United States v. Habegger, 370 F.3d 441 (4th Cir. 2004) (statutory interpretation principles for criminal statutes)
United States v. Milstein, 401 F.3d 53 (2d Cir. 2005) (repackaging/false branding contexts compare civil/criminal theories)
United States v. Farmer, 370 F.3d 435 (4th Cir. 2004) (distinguishes genuine marks vs. spurious marks in counterfeiting)
United States v. Hanafy, 302 F.3d 485 (5th Cir. 2002) (repacking/gray goods exception in civil context; relevance to criminal theory)
United States v. Giles, 213 F.3d 1247 (10th Cir. 2000) (supervises interpretation of Lanham Act vs. § 2320)
United States v. Guerra, 293 F.3d 1288 (11th Cir. 2002) (civil vs. criminal counterfeit standards; narrow reading of statute)
Rolex Watch U.S.A. v. Meece, 158 F.3d 816 (5th Cir. 1998) (civil counterfeit analogies and counterfeit marking standards)
Westinghouse Elec. Corp. v. Gen. Circuit Breaker & Elec. Supply Inc., 106 F.3d 894 (9th Cir. 1997) (confusion test in civil counterfeiting; limits to criminal context)
Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614 (9th Cir. 1993) (civil counterfeiting standards; relevance to language of statute)
United States v. Akinkoye, 185 F.3d 192 (4th Cir. 1999) (redacted co-defendant statements and confrontation clause analysis)