What does a counterfeit look like?

Coach, Inc. v. Chung Mei Wholesale, Inc., 2016 WL 7470001,
No. 15-22829 (S.D. Fla. Jul. 17, 2016)
Interesting case involving alleged counterfeiting of Coach
products.  The defendants ran a business
importing goods from China and selling them to retailers and wholesalers,
including merchants who sell items at flea markets or operate 99-cent retail
stores.  Customs and Border
Protectionseized a shipment imported by Chung Mei from China, which CBP
determined contained 1,800 “Coach Design Handbags,” identified as constituting
“counterfeit copies” of the Coach trademarks. A private investigator observed
approximately “2,000 units of handbags bearing Coach trademarks” from that
shipment.  CBP intercepted a similar
second shipment, this time with “approximately 3,000 units of clutch purses
bearing Coach trademarks.” The private investigator took photographs of the
imported handbags. A Coach employee trained to identify counterfeits examined the
photos and concluded the pictured items were counterfeit and bore counterfeit
representations of four registered Coach trademarks as well as trade dresses.
Coach sought summary judgment on its counterfeiting and
related claims, which the court denied because a reasonable jury could conclude
that the bags didn’t use counterfeit marks. A counterfeit mark is defined as a
“spurious mark which is identical with, or substantially indistinguishable from,
a registered mark”; the standard is “more rigorous than the test for likelihood
of confusion.”  The private investigator
and Coach employee’s opinions were not sufficient, nor was one of the
defendant’s acknowledgement at his deposition that the exterior—but not the
interior—of the confiscated bags bore resemblances to Coach products.  
The court’s own review of the photos showed
undoubted similarities, but also that there was a genuine issue whether they
could be considered “identical” or “substantially indistinguishable” from
Coach’s marks. “For example, the design on the clutch bags confiscated in the
second seizure consists of a series of thick black ovals, some containing four
smaller ovals inside forming a flower-like pattern, while the marks Coach
claims are infringed consist of a series of the letter ‘C’ in bold black font.”  The court also mentioned factors that seemed
to go more to likely confusion (which is understandable, as Coach also alleged
regular infringement), such as the differing zippers and interiors on the bags
and the extremely low prices ($2.50 each) and resultant likely quality of the
bags.  The CBP’s notice of seizure letter
was also insufficient to prove the goods counterfeit—which, as my suit against
ICE indicates, is a good call given that, despite what ICE initially told me,
they don’t have any independent standards or training on what constitutes a
counterfeit; ICE instead relies entirely on what trademark owners say.


close-up comparison

Coach argued that it didn’t have to show likely confusion,
but that’s only true when there’s no disputed factual issue over whether the
defendant’s products are identical to or substantially indistinguishable from
the plaintiff’s products.  For similar
reasons, the court declined to grant summary judgment on the trade dress
infringement and trademark dilution claims.
Denouement: Defendants lost a jury trial on
infringement/counterfeiting and also had to pay attorneys’ fees, though not all
individual defendants were found liable.

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