Gucci claims win over online counterfeiters
A US court has awarded luxury brand Gucci $144.2 million in damages after it fell victim to online counterfeiters.
The US District Court for the Southern District of Florida ordered 155 websites selling fake Gucci goods to shut down.
Many of the websites copied Gucci’s logos and product images, and used the brand’s name in the domain name.
The decision came down on October 17, around five months after Gucci filed suit. Because the defendants did not respond to the complaint, there was no trial in the case – the court approved Gucci’s motion for infringement.
The court calculated damages by applying the statutory damages provision, which allows for up to $1 million in damages per counterfeit good sold.
Gucci chief executive Patrizio di Marco welcomed the ruling.
The websites exploited "Gucci's unique creativity which has been harmful to Gucci’s image, business and well-known trademark reputation for creating high quality artisanal 'Made in Italy' products," he said.
Ralph Cathcart, partner at Ladas & Parry LLP in New York, said the damages award was “pretty large”, but whether Gucci “ever gets a penny is questionable”.
“It will depend on whether they can actually pursue anybody – if there is any bricks and mortar,” he said.
Gucci’s ability to recover the damages may also depend on the “quality of the investigation” before the case was filed, said Joseph Gioconda, founder of Gioconda Law Group PLLC in New York.
“We engage in a fairly extensive pre-filing investigation with multiple layers. One of the layers is whether the defendants have readily identifiable accounts with banks, PayPal or other transfer vehicles.”
When cases are filed, he said, brands can seek temporary restraining orders directing banks to freeze the defendants’ accounts. If the defendants are found guilty, their funds can be transferred to the brand owner.
Gioconda continued: “These cases are becoming fairly routine for brand owners. What this case (and others) shows is that the federal courts in the US are becoming very aware of the brands’ efforts towards this problem and that the counterfeiters are lawless entities.”
Brand owners also face the problem of counterfeiters creating new domain names and re-starting their operations, often referred to as ‘whack-a-mole’.
Gioconda said: “Brand owners should remain vigilant. Filing one case is not usually enough.
“But this case will send a strong message to counterfeiters, as eventually they will gravitate away from the brands taking action to the ones not taking action. They will pick on the easy targets,” he said.
Cathcart added: “Gucci transferred more than 150 domain names – that is an effective injunction from a practical view.
“What Gucci did serves an important function. It sends a message to counterfeiters.”
One of the largest ever damages awards in an online counterfeiting case came last year, when Deckers, which makes Ugg boots, secured $686 million against more than 3,000 websites.
