Hermès Wins $100 Million Judgment Against Websites in Counterfeiting Suit

The French luxury brand Hermès has been awarded $100 million and a permanent injunction in an action against 34 websites that sold counterfeit Hermes products. In Hermes International v. John Doe, 12-CV-1623(DLC) (SDNY April 30, 2012), the Court entered a Default Judgment and Permanent Injunction against the owners of 34 websites, which included domains such as DiscountHermesBag.com, HermesOutlet.org, HermesOutletBags.net, Outlet-Hermes.net, and others. The Order found that the Defendants, who did not appear in the action, were guilty of federal trademark counterfeiting and infringement, false designation of origin, trademark dilution and cybersquatting, as well as various state laws.

The Court noted in the Judgment that collectively, the Defendants sold and offered for sale at least nine distinct types of goods bearing counterfeits of the Hermès trademarks and designs. The Court further noted that the Defendants had disregarded the temporary restraining order and preliminary injunction previously ordered by the Court.

In addition to the hefty judgment and permanent injunction, the Court ordered that the domain names be permanently transferred to Hermès and that all money currently restrained in the Defendants' PayPal accounts be released to Hermès as partial payment of the awarded damages. Additionally, the Court ordered that domain name registry or other third party providers, including internet service providers, immediately and permanently cease rendering any services to Defendants in connection with the infringing websites and domain names. The Court further ordered that Internet search engines and social networks, such as Google, Bing, Yahoo, Facebook, Google+ and Twitter, de-index and remove any search results pages for the offending websites from their search results.

In a similar case, Burberry was recently awarded $180 million dollars in a default judgment against China-based counterfeiters who used a sophisticated online store network. In that judgment, 236 domain names that were used to sell knockoffs are to be transferred to Burberry.

While these types of cases may be useful as another tool in the ongoing fight against counterfeiters and cybersquatters, it is unlikely that companies such as Hermès and Burberry will ever be able to actually collect on these judgments given the nature of the defendants. In addition, many of these counterfeiters and cybersquatters will simply form a new company and purchase another domain to continue their counterfeiting activities as the ability to sell counterfeit products over the Internet has made it much easier for professional counterfeiters to distribute their goods. However, the publicity generated by these types of lawsuits and the knowledge that a company will actively pursue infringers and counterfeiters may serve to have a chilling effect on future infringements.

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