According to WWD, a jury in Memphis, Tennessee awarded Coach Inc. a little over $5 million on Tuesday March 21, 2012. The jury awarded this sum after it found that Frederick Goodfellow, an owner of a flea market, was guilty of infringing upon the brand’s trademarks. Based upon the lawsuit filed back in 2010 in the Western District of Tennessee, Goodfellow rented space to vendors who were selling counterfeit Coach products. Coach responded by suing Goodfellow along with the offending vendors for $2 million per counterfeit mark, the maximum in statutory damages. The jury subsequently found that the defendants infringed upon 21 of Coach’s trademarks and therefore awarded Coach $240,000 per mark infringed. According to WWD, this amounted to $5.04 million.
On February 21, the Court of Appeals for the Federal Circuit made yet another influential holding. You may want to sit down, because this will come as a shocker to our readers who are immersed in both the legal and fashion worlds- the court held that Coach, the luxurious leather American handbag brand, is not “famous.”
The story begins in 2004 when Triumph Services, a company that sells test prep educational materials under the name “Coach,” sought to register “Coach” with the USPTO. Naturally, Coach opposed Triumph’s application. Their opposition was heard in front of the Trademark Trial and Appeal Board (TTAB) where Coach claimed that Triumph’s registration application should fail on three counts: 1) that the registration, if allowed, would create a likelihood of confusion with Coach’s registered mark; 2) That Triumph’s mark would dilute Coach’s mark; and 3) that “COACH” in the educational context is “merely descriptive” therefore lacking any sort of secondary meaning to have established proper distinctiveness.
The TTAB rejected all three of Coach’s claims and in turn the luxury brand appealed to the Court of Appeals of the Federal Circuit. At the Appellate level, Coach’s did not bring home the gold either. Before we continue to analyze the Federal Circuits decision, it is important to note that although Coach did not bring home the gold; they did not go home entirely empty handed. The court did not find in favor of Coach on their likelihood of confusion, or the dilution claim, but the court did vacate the TTAB’s decision solely on its finding of acquired distinctiveness and remanded the claim for further proceedings.
Approximately three years ago, Coach launched an aggressive national civil litigation program called Operation Turnlock in an attempt to redouble their efforts against counterfeiting. According to WWD, this zero-tolerance program targets companies and individuals who are involved in the sale or distribution of counterfeit products in both state and federal courts. Statistics from the U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement show that in 2010 alone these agencies made approximately 20,000 counterfeit seizures valued at $188.1 million. Approximately $15 million of the seizures were fake handbags, wallets and backpacks.
According to Todd Kahn, Coach senior vice president and general counsel, “Coach has always taken counterfeiting very seriously, but the missing piece was shoring up the civil lawsuits.” He alleges that counterfeiters are more afraid of paying a penalty as opposed to spending time in jail. And Kahn may be right- under federal law, counterfeiters can be ordered to pay as much as $2 million per counterfeit item.
Since beginning the program in May of 2009, Coach has initiated over 500 lawsuits with about 250 of them judged in favor of Coach. According to Kahn, in addition to these judgments there have also been many out-of-court cash settlements, leaving the company with a sum of money “in the eight figures.” The company says its largest settlement was for more than $2 million and its largest seizure at one time was more than 500,000 units.
Recently, in Manila, Philippines, Rhona Vergara, Senior Partner of the Vergara Mamangun Jamero Gonzales (VMJG) said “in coordination with the Intellectual Property Office of the Philippines, fake Louis Vuitton goods were removed from the Greenhills Shopping Center in San Juan.” Vergara is amongst the retained counsel of LV in the Philippines to try and stop the sale of counterfeit LV products. A noted 1.2 billion Philippine peso (roughly $27 million) worth of fake LV products and bags were destroyed.
Italy recently confiscated 9 million of counterfeited watches and bracelets in the Palermo, Sicily. The items were counterfeiting famous designers such as Louis Vuitton and D&G. Many Hello Kitty counterfeited health-threatening goods for kids were also seized. A criminal complaint has been filed against the shop owner.
Also, in Friuli, Italy, over 250 million items coming from China with the words “Made in Italy” were seized. The Italian PTO report can be found here.
In a city in Michigan, Clinton Township police found and confiscated 21 boxes of counterfeited jewelry, purses, perfume, and shoes. Prada, Gucci, and Coach were among the fake brands found.
Woman’s Wear Daily reported earlier today that three people have pleaded guilt in federal court (counterfeiting is a federal offense) to conspiring to smuggle counterfeit Coach handbags into the United States.
I was talking to my friend the other day and she invited me to a “purse party.” I asked her what a “purse party” is, and she told me her friend has people come to her house and she displays and takes orders for ”high-end designer knockoffs.” To me this sounds like a contradiction in itself. How can something be high-end and a knockoff at the same time? I have seen some good knockoff on Canal street but nothing I would call “high-end.” I figured this idea of a “purse party” was the equivalent of Canal street coming to your living room. I was left wondering if these “purse parties” are legal and if there is any sources out there?
NBC Washington recently reported that two airline employees were caught attempting to smuggle over $35,000 worth of counterfeit goods. The two were caught at Dulles International Airport in Chantilly, VA. The brands of choice? None other than Louis Vuitton, Fendi, Coach, Prada and Ray Ban. Country of origin has been identified as China.
It is common practice for fashion houses to sue flea market owners when the vendors at the flea market are selling counterfeit pieces. However, Coach went after the City-owned New Maxwell Street Market in Chicago and filed a compliant against the City of Chicago on May 19 as the owner of that flea market. They claim that several of New Maxwell Street Market vendors were selling fake Coach bags last summer and are seeking over $2 Million in damages.
How will Coach prove its case?
In October 2009, Coach filed its second law suit against Target claiming trademark infringement. The action revolved around Coach’s “Ergo” bag design and its “Signature Patchwork” bag design being too similar to the handbags Target was selling.
However, another opportunity to have a judge rule on the issue of design imitation has passed as the parties settled the dispute. According to Bloomberg Businessweek, “…Coach said that all parties, including consumer goods sourcing company LF USA, “have amicably resolved the recent lawsuit.” The terms of the settlement are confidential.”
This is not the first time Coach and Target settle an infringement action. Coach had sued and settled with Target in 2006 for selling handbags that appeared to be infringing a Coach design.
Aggressive. That is the best way to describe the way Christian Louboutin is combating those who are destroying his soul by copying his soles…
This May 11th Wall Street Journal blog post announced the launch of Christian Louboutin’s new website - www.stopfakelouboutin.com. The website features this video of a truck running over an exceptionally large pile of fake Christian Louboutins seized from a factory in China.