Posts Tagged: "counterfeits"

Fashion is a brand-driven industry, and few brands in the fashion space carry the same cachet as Chanel. But how much control do brands like Chanel have over merchants who resell name-brand items in the secondary market? The answer, according to a federal jury in the Southern District of New York, is “Quite a bit.” The jury awarded Chanel $4 million in statutory damages on Chanel’s claims of trademark infringement, false association, unfair competition, and false advertising related to What Goes Around Comes Around’s (WGACA) reselling and marketing of Chanel products. The plaintiffs prevailed on all claims.

The U.S. Supreme Court today denied certiorari to Diamond J Wholesale, LLC, who petitioned the Court in December 2023 to clarify how individual liability for willful trademark infringement by a corporation should be assessed. The U.S. Court of Appeals for the Eleventh Circuit in August 2023 backed a Georgia district court’s finding that Diamond and its owner, Raj Solomon, willfully infringed trademarks owned by Top Tobacco, L.P., Republic Technologies (NA), LLC, and Republic Tobacco, L.P. (Top Tobacco) for cigarette rolling papers. The ruling upheld an $11 million verdict in favor of the tobacco companies.

The Lanham Act provides for special remedies in cases of trademark infringement “involving” the use of a “counterfeit” mark. 15 U.S.C. § 1117(b), (c); 15 U.S.C. § 1127. Absent “extenuating circumstances,” if the use of a counterfeit mark is intentional and knowing, the Act requires entry of judgment of three times the amount of actual damages or profits found, as well as an award of attorney’s fees. 15 U.S.C. § 1117(b). Alternatively, in any case of infringement “involving” a counterfeit mark, the Act provides for awards of statutory damages of up to $200,000; it provides for statutory damages of up to $2,000,000 if the use of the counterfeit mark was willful. 15 U.S.C. § 1117(c)…. In our view, a straightforward interpretation of the Act allows access to the special remedies in cases that involve knock-off products, as well as cases where an identical logo or word mark is used on the same type of product that is in the plaintiff’s trademark registration, even if the defendant’s products and/or their packaging do not resemble the plaintiff’s products.

The U.S. District Court for the Eastern District of New York, in a decision published Monday, denied the defendants’ motions to vacate asset freezes in a case brought by Gilead alleging a massive HIV drug counterfeiting ring that involves “hundreds of millions of dollars’ worth” of fake medications. In January 2022, the court unsealed documents in the suit against a slew of defendants who Gilead said sold, marketed, and distributed counterfeits of its HIV medications. Gilead’s complaint sought immediate monetary and injunctive relief, including seizure at certain of the defendants’ premises, as well as relief for trademark and trade dress infringement and trademark dilution, among other alleged violations.

On Friday, July 21, an Illinois district court ruled that a Pakistani employee of a medical device distribution company infringed on Ethicon’s trademark when he bought, marketed and sold counterfeit Ethicon devices. Ethicon is a subsidiary of Johnson & Johnson and won an $18 million default judgment. Ethicon first filed a complaint against the defendant Mudassar Shah in July 2020 and alleged federal and state trademark infringement of five different trademarks. The laundry list of accusations also included trademark dilution, false advertising, common law unjust enrichment, common law tortious interference with contract, and breach of settlement agreement.

“The true crime in ecommerce fraud is that creators will stop creating.” That grim assessment has driven Jennifer L. Cook of SnakeArts to fight like heck against rampant infringements and counterfeits globally. Her ongoing class action lawsuit against Meta Platforms claims their subsidiary Facebook knowingly permits copyright infringement via advertisements featuring stolen product images from artists. It seems to be in Meta’s best interest to do so: FB generates the bulk of its billions of dollars in annual revenue from advertisements, without regard to the legitimacy of content.

A report released  Wednesday by MarqVision found that 68% of direct-to-customer (DTC) brands have had their products counterfeited. The report surveyed 295 representatives from DTC brands across the world. The report also provides information about how worried DTC brands are about IP infringement and counterfeiting. The DTC market has tripled over the last five years, accounting now for $1 of every $7 spent, according to the report.

Protecting brands and going after counterfeiters is like herding cats. There are hundreds, if not thousands, of ways that online counterfeiters illegally monetize brands. Companies have many ways to combat them, but it can traditionally take lots of time, cost, and resources to do it. Now there is a less publicized option in the United States which can deter counterfeiters, takes little time, and often even pays for itself. This ultimately can result in true deterrence of counterfeiters for a brand in online marketplaces. With online sales exploding, there has been a marked increase in sales of counterfeit products, despite various solutions available to combat it. Indeed, the industry as a whole will see over $1.7 trillion of sold counterfeit products on various online platforms each year—and that estimate, by the International Anti-Counterfeiting Coalition, was in 2015. Counterfeit sales result in the loss of millions of U.S. jobs and lost profits, and is by far the world’s largest criminal enterprise, with eCommerce counterfeit sales expected to grow to $6 trillion by 2024 in the United States alone. 

The U.S. District Court for the Eastern District of New York unsealed multiple documents last week that named the kingpins behind an alleged counterfeit HIV medication conspiracy. An unsealed amended complaint filed in late September names the two alleged kingpins as Lazaro Roberto Hernandez and Armando Herrera, both of Florida. The two “kingpin defendants” are accused of being “at the head of the conspiracy” and “career criminals who organized the conspiracy and controlled the flow of the counterfeits, all while operating from the shadows and using extensive measures to conceal their identities.” Hernandez was identified by basic geolocation data associated with burner phones used to communicate details about the conspiracy.

During the final day of IPWatchdog LIVE in Dallas, Texas on Tuesday, a panel of attorneys discussed issues surrounding “dangerous fakes,” which are counterfeit goods that pose health risks to consumers. The panelists began with a brief overview of how U.S. Customs and Border Protection (CBP) identifies and seizes infringing goods. The panel also outlined the role that U.S. Consumer Product Safety Commission (CPSC) plays in working to identify dangerous fakes in conjunction with CBP.

Earlier this month, e-commerce giant Amazon.com issued its latest Brand Protection Report detailing steps taken by the tech titan to reduce the tide of counterfeit products being sold to consumers around the globe. While the report identifies several concrete steps taken by Amazon to prevent knock-offs from being listed for sale, there are plenty of questions that yet remain as to whether Amazon is genuinely committed to eliminating sales of fake branded products that the company has been known to ignore.

StockX, which describes its e-commerce resale platform as “[t]he current culture marketplace,” is primarily used by consumers to resell and buy sneakers, among other items. In January 2022, StockX announced its plans to launch The Vault, which uses non-fungible tokens (NFTs) to allow buyers to track ownership of physical products resold on its e-market and warrant their authenticity, including Nike shoes. Swiftly thereafter, Nike sued StockX in the United States District Court for the Southern District of New York (SDNY), alleging that StockX’s use of Nike’s famous marks in connection with its NFTs constitutes trademark infringement. Nike, Inc. v. StockX LLC, 1:22-cv-00983-VEC. In its original February 3, 2022, complaint, Nike alleged that StockX mints NFTs using Nike’s trademarks without authorization and sells them to consumers, who either believe or are likely to believe that StockX’s NFTs are connected with Nike when they are not.

A new study on trade in counterfeit goods that pose health, safety and environmental threats has found that China and Hong Kong account for some three-quarters of exports of dangerous counterfeits. It also found that online sales represent 60% of seizures of dangerous products destined for the EU. The 90-page study was published on March 17 and jointly conducted by the Organisation for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO). It is based on customs seizure data and other enforcement data from 2017 to 2019, as well as interviews with enforcement experts.

The U.S. District Court for the Eastern District of New York yesterday unsealed documents in an anticounterfeiting suit filed last year by Gilead Sciences, Inc. against a slew of defendants who Gilead alleges sold, marketed, and distributed counterfeits of its HIV medications. Gilead’s complaint seeks immediate monetary and injunctive relief, including seizure at certain of the defendants’ premises, as well as relief for trademark and trade dress infringement and trademark dilution, among other alleged violations…. According to the unsealed complaint and motion for relief, the accused companies sold “authentic-looking bottles of Gilead HIV and other medication to distributors and pharmacies throughout the United States, including in New York City, who in turn dispensed them to patients.”