After mentioning the trademarks of Burberry and Louis Vuitton I did some research and came across some of their prior legal cases. Burberry v. Euro Moda, John Fanning & Moda Oggihas a lot of great language for defining counterfeiting and trademark dilution. While my blog is still in its introductory phase, I’m going to be documenting my research trail while I learn about this law. That said, bear with me and enjoy some basic info on infringements and dilution…
In this 2009 case, Burberry sued company Euro Moda and its owner, John Fanning, as well as company Moda Oggi for multiple counts, including counterfeiting, trademark infringement, false designation of origin and unfair competition, and trademark dilution. These claims originated from a prior settlement agreement between Burberry and Euro Moda from 2005, that followed the Defendant’s use of counterfeit Burberry merchandise. Euro Moda agreed to cease all purchases and distribution of nearly 75,000 counterfeit Burberry products. They also agreed to refrain from causing, enabling or assisting in any other infringement in the future. (Guess what happens next…)
Burberry filed this suit after investigators found Euro Moda’s “Burberry” products for sale at several Cohoes Fashions retail stores, as well as a Tannery House store. However, it wasn’t until they sued Cohoes that they found out in discovery that the products were actually supplied by Euro Moda. Thousands of fake hats, scarves and polo shirts, as well as four counterfeit purses, all bearing the Burberry name and/or trademarks were found to be linked to the Defendants.
A little bit about Burberry, they’ve been an established company since the first shop was opened in the UK in 1856. They own many registered trademarks; their name, the check pattern (see my Louboutin briefcase), and their equestrian knight on horseback icon, to name a few. Apparently, they also made about $2 billion worldwide in 2008, and have a brand value of about $3.2 billion (2007). A pretty desirable target for counterfeiters, but also a big company to try and mess with. They employ their own Store Investigators, a Brand Protection Manager (and department, presumably), and IP counsel Fabio Silva (since 2003), all of which are trained specifically to identify counterfeit Burberry products.
This case (citing the Lanham Act, section 1127) identifies a counterfeit good as containing “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” Furthermore, its unauthorized use in commerce qualifies as trademark infringement and is prohibited by the Lanham Act (s. 1141(1)(a)). Use in commerce is defined as “in connection with the sale, offering for sale, distribution, or advertising of any goods or services.”
Aside from the blatant breach of contract issue, this Court determines that Euro Moda, et al, without a doubt infringed upon Burberry’s trademarks and was liable for false designation of origin and unfair competition. They also find the Defendants guilty of trademark dilution by tarnishment.
This area of law is governed by section 43(c) of the Lanham Act (15 USC 1125(c)), also known as the Federal Trademark Dilution Act (FTDA). This statute was revised by the Trademark Dilution Revision Act of 2006 (TRDA) and both versions are applicable to dilution claims, depending on the type of relief sought and when the conduct which the claim arises from occurred. Under both versions, there are four general requirements. For each, a plaintiff must demonstrate that the mark is famous, AND that the unauthorized use of the mark occurred after it became famous. The other two requirements change depending on the version that applies.
The TDRA lessened the burdens of the original FTDA by requiring mere “use in commerce” rather than “commercial use of the mark in commerce;” and a mere “likelihood of dilution” over actual dilution. If a claim is for pure injunctive relief, the TDRA applies regardless of when the conduct occurred. If it’s for monetary damages, the more stringent restrictions apply, and the distinctions gets a little more complicated than this case warrants. Luckily for Burberry, its claim passes either test.
The Court found that Burberry’s mark were undoubtedly “famous” after analyzing a number of factors relating to its marks’ distinctiveness, the reach of their products, advertising, sale channels and whether the marks were actually registered. Their fame has dated back for decades before the Defendant’s actions occurred.
The Defendant’s “use in commerce” is satisfied by their sale of merchandise regardless of whether it was as a third party to the retail market. The only element really in consideration here is the dilution itself. Burberry claims that the Defendant’s dilution was by way of “tarnishment.” (Either done by tarnishment or “blurring”) It’s the claim that the senior mark will suffer from negative associations with the defendant’s product, provided the product is so similar and a willful intent to deceive exists. It’s typically proven by consumer report evidence or surveys if a defendant’s product is remarkably similar to the trademark.
In this case, the Defendant’s used exact replicas of the Plaintiff’s trademarks that were so identical the Court didn’t need such circumstantial evidence. However, they weren’t exactly similar… the reason why the inspectors were able to identify them as counterfeits was due to their poor quality; loose stitching, substandard fabric and even misspellings on care tags. The claim is based on the theory that if people buy these things believing they’re authentic Burberry, they’ll come to think that Burberry products are crap.
The Court easily found in favor of Burberry on all counts, under the presumption that creating a counterfeit is inherently for the purposes of deceiving or creating a likelihood of confusion as to the origin of the product.