DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, DECISION OF 13 MAY 2011, TORY BURCH LLC ET AL. V. YONG SHENG INT’L TRADE CO., LTD ET AL., NO. 1:10-CV-09336
In a blow against online counterfeiters, the District Court for the Southern District of New York awarded luxury fashion company Tory Burch LLC $164 million in damages — reckoned by the company to be the biggest award of its kind.
On 13 May 2011, Judge Deborah A. Batts of the Southern District Court of New York awarded Tory Burch LLC and River Light V, L.P., a Tory Burch subsidiary, a considerable $164 million in damages after entering default judgment against over 40 defendants that had allegedly engaged in the "distributing, offering for sale and/or selling [of] [...] goods bearing counterfeit reproductions of Tory Burch’s federally registered trademarks."1
Click here to see Tory Burch trademarks.
The court found that the defendants — which included various corporations that offered for sale and sold, inter alia, counterfeit versions of Tory Burch handbags, shoes and accessories in the United States via the Internet — went “to great lengths to conceal themselves and their ill-gotten proceeds from Tory Burch’s and this court's detection including by using multiple false identities and addresses associated with their operations as well as purposelydeceptive contact information.”2 Accordingly the court awarded the plaintiffs maximum statutory damages under 15 U.S.C. § 1117(c)(2), which amounted to $2 million for each of two trademarks — a TORY BURCH word mark and an associated logo — or $4 million from each defendant, for a grand total of $164 million.
In addition to the monetary award, the court also granted Tory Burch significant equitable relief. Not only did the court enjoin the defendants from, inter alia, using any of Tory Burch’s trademarks or colorable imitations thereof, selling any counterfeit Tory Burch products, and operating or hosting any infringing websites, but also the court prohibited any third party internet service providers from providing services to any of the defendants. Moreover, the court transferred to Tory Burch over 230 domain names associated with the defendants’ infringing websites, issued a prospective injunction freezing any financial accounts later discovered by Tory Burch to belong to or be controlled by any of the defendants and allowed Tory Burch to recover any monies in such accounts until the damages award is satisfied.
Overall, this award is a significant blow to online counterfeiters and may help pave the way for similar awards against counterfeiters in the future. Even if collecting the actual damages from counterfeiters ultimately proves difficult — which is especially likely if, as purportedly here, the counterfeiters are foreign companies — awards of this caliber may at least make some potential counterfeiters second guess themselves before affixing another’s trademark to an unauthorized good.