“A crippling but necessary deterrent”
Last week, on July 19th, the Southern District of New York put the pedal to the Lanham Act metal in in Coach v. Allen. It’s a summary judgment imposing molto statutory damages — $44 million — for trademark counterfeiting in the Southern District of New York. And it’s not a default judgment. No, it’s even (for the defendants) worse.
The decision is a judicial catalog of, unsurprisingly, picture-perfect anticounterfeiting investigatory and legal enforcement techniques employed on behalf of Coach by Gibney Anthony & Flaherty, led by my former partners Brian Brokate and John Macaluso, against a chronic counterfeiter who, as you will see, really just does not get it.
The court does not say so, but this defendant evidently goes by the nickname “Cleopatra.” Yes, “queen of denial” — because like a lot of these cases, there’s something pretty pathetic about the defense here. The defendants not only sold outright fake Coach stuff brazenly over the Internet but proceeded to “represent themselves” in this action, and to do so, evidently, quite stupidly. Something other than hilarity ensues:
This is an action for counterfeiting and trademark infringement involving defendants Linda Allen and Courtney L. Allen (hereinafter collectively referred to as “Defendants”), who allegedly counterfeited and so infringed on seventeen Coach federally registered trademarks on eleven types of goods for a total of twenty-two separate infringements.
Defendant Linda Allen is an admitted counterfeiter who has previously been sued for trademark infringement. During the course of this case, Defendants proclaimed their innocence despite emails, letters, website registrations and testimony evidencing their infringing activities. Defendants refused to respond meaningfully to legitimate requests to produce documents that detail such illegal sales. Only through subpoenas to the third parties did Coach discover any meaningful information about Defendants’ illegal activities, and it may just be the tip of the iceberg.
There is no genuine issue of material fact that counterfeit and infringing Coach merchandise was being offered for sale and sold on BellaFashions.net (the “Website”) and that defendants Linda Allen and Courtney L. Allen personally engaged in the conduct that forms the basis of this action.
Defendants are pro se. Their opposition to the motion was originally due on May 29, 2012. Defendants missed the deadline. However, on June 5, 2012, they faxed unsworn letters to the Court containing general denials of affiliation with the Website and a reliance on the disclaimers. . . . Defendants presented no admissible evidence in opposition to the summary judgment motion.
This can’t go well for defendants, and it doesn’t. I mean, they’re not even trying:
In March, 2011, Coach discovered the website BellaFashions.net which was being used to promote and offer for sale handbags, duffle bags, wristlets, wallets, scarves, hats, umbrellas, shoes, key chains and sunglasses. The products distributed on the Website were explicitly identified as Coach handbags and accessories. . . .
The Website was registered to “Linda Allen, [XYZ] Cold Spring Road, Syosset, NY 11791. The administrative contact was listed as “Allen, Linda” at the same address indicated above with the following contact information: frog[XYZ]@aol.com and phone number (516) 921-[ABCD}. “[XYZ] Cold Spring Road, Syosset, NY 11791” is the home address of defendants Linda Allen and Courtney L. Allen. Frog[XYZ]@aol.com is the current e-mail address of defendant Linda Allen. (516) 921-[EFGH] is the fax number for the Defendants’ home office.
You know … “It’s sure quiet out here. Almost too quiet!”
Well, the truth is, sometimes cases like this can be the most frustrating, especially where there’s pro se representation — the less rational, the harder it can be, depending on the judge, to pin these folks down. Believe me.
Here, however, Judge Colleen McMahon keeps her eyes on the ball, and methodically demonstrates why Coach is entitled to the full boat: Maximum statutory damages of $2,000,000 for each and every trademark infringed; of which, you will recall, there were two-and-twenty. The court readily finds willfulness here, including by dint of this beauty:
Defendant Linda Allen produced a redacted copy of the sales confirmation sent to Coach’s agent hiding the fact that the logo for her former business was prominently displayed on it, which directly links her to the Website. Additionally, Defendant Courtney L. Allen made misrepresentations in her deposition when she indicated that she had never sold Coach products through eBay.com. However, records subpoenaed from eBay, Inc. indicate that she sold Coach items from her account.
Clever rouses, eh! The court notes also an earlier, essentially identical judgment entered against defendant Linda Allen, and then drops the hammer on the two of them:
Linda Allen plainly requires substantial deterrence because she has not been deterred by prior judgments. She persists in her contumacious behavior. This award may be crippling, but it is plainly needed to prevent Allen from going back once again into the business of counterfeiting. There is no allegation that Courtney L. Allen has been involved in the prior instances of counterfeiting – there has never been a judgment entered against her. However, the evidence against her establishes willfulness, so it is perfectly appropriate to award maximum statutory damages against her.
Because Defendants have clearly acted in bad faith by distributing counterfeit versions of Coach’s merchandise, I grant the request that Coach receive the maximum amount of statutory damages for willful infringement for twenty-two separate acts of infringement.
Yep: “Infinity dollars” — that’s what what $44 million sounds like to me. But note that the court never actually says the number, but instead pulls a yeasty, fresh-baked “maximum amount of statutory damages” formulation out of the oven for full effect.
Effect noted. Unlike in the idiotic made-up-infinity-IP-damages scenario, here an award of infinity dollars against real crooks doing real counterfeiting, doing it spectacularly openly and uber-stupidly — and litigating as if it’s all a big joke — probably makes some sense.
If not here, where? Certainly here, if anywhere. Maybe $10 million wouldn’t have gotten their attention — would it get yours? Who knows. But $44 million, and the magic words “maximum amount” — now that’s a conversation starter! Or a counterfeiting-career ender.
You’d think. Maybe this time, someone will!