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Adidas, Nike Awarded Damages

The recommendation by Magi­strate Ronald Ellis was handed down on Feb. 27, but was not immediately available.

NEW YORK — A U.S. magistrate here has recommended that Adidas and Nike be awarded $22 million and $16 million in damages, respectively, plus almost $250,000 in combined fees and expenses, in a trademark infringement lawsuit against Top Brand Co. and several co-defendants.

The recommendation by Magi­strate Ronald Ellis was handed down on Feb. 27, but was not immediately available. U.S. District Court Judge Kimba Wood here granted a combination of default and summary judgments in July in the lawsuit, which had been under way for five years. Wood referred the case to magistrate court for three issues: an accounting of profits against some defendants, whether certain profits should be trebled and an accounting of attorneys’ fees. Ellis’ recommendation is subject to approval by Wood.

MHK Products Inc., Transfund Capital LLC and the owner of both firms, Jay Enis, were ordered to pay $12 million in statutory damages to Nike and $5 million to Adidas. Top Brand, Global Surplus, Rosson Sport Inc. and executives Vincent Mili­tano and Hanoch Rosner were told to pay Nike $4 million and Adidas $17 million in statutory damages. Neither the defendants nor their lawyers could be reached for comment.

The statutory damages recommended are the maximum available, $1 million per trademark.

“The size of the defendants’ infringing operations, which led to the production of millions of infringing goods produced; the willfulness of their conduct, and their behavior in this litigation all weigh towards a grant of the maximum in statutory damages,” Ellis said in his written opinion.

The counterfeit goods were discovered in 2000. Two other related, but separate, actions were filed in Pennsylvania and New Jersey. Among the goods listed as counterfeit in the court documents were T-shirts, fleece sweatshirts and polo shirts bearing allegedly counterfeit Nike trademarks, and T-shirts, sneakers and soccer balls bearing allegedly counterfeit Adidas trademarks, court documents said. The goods were manufactured in the Philippines, Hong Kong, Taiwan and the U.S. and were sold through jobbers and off-price retailers, said Martin Feinberg, a law partner with the Gursky Group of Dreier LLP, which represented the two brands.

The original complaint filed by Nike and Adidas alleged 20 counts of trademark counterfeiting, trademark infringement, false designation of origin, trademark dilution (both federal and common law), trade dress infringement and unfair competition.

The lawsuit was one of three related actions filed in three states that involved a ring of counterfeit Nike and Adidas goods, Feinberg said. “What’s significant about this is it was a piece of a multistate litigation involving counterfeit goods … They were part of a multistate and multinational operation or ring,” he said. The breadth and scope of the counterfeit organization was extensive, involving $30 million in counterfeit goods overall, he said.