NEW YORK — Cartier International was awarded a $594 million judgment against Chinatown counterfeiters in a lawsuit that was in the court for more than two years.
In a default judgment dated Dec. 21, U.S. District Court Judge Thomas Griesa of the Southern District of New York ordered 33 named defendants to each pay Cartier $18 million in statutory damages plus reimbursement of legal fees. The judge also issued a permanent injunction barring the use or sale of any goods bearing the Cartier trademarks.
According to the order, none of the defendants responded to the complaint.
The case was filed in October 2002, and highlights a strategy employed by Cartier’s legal team at Greenberg Traurig LLP that seeks to break counterfeiting rings by going after shipping companies and money-laundering operations rather than street-level retailers. Rather than filing scores of individual lawsuits, the jeweler relied on the documents obtained in raids to identify and add defendants on a rolling basis, keeping the case moving and giving Cartier the added benefit of having the case kept under the jurisdiction of one judge.
It’s a strategy that already had paid smaller dividends. In April 2003, Judge Griesa determined a group of defendants to be in contempt for violating a temporary restraining order and awarded damages of $4.8 million. On June 28, another group of defendants agreed to settle with Cartier for $1 million. Two more defendants settled on Sept. 14 for $150,000.
The seemingly oversized award is the latest of several such decisions in which Judge Griesa sided heavily in the favor of luxury-goods manufacturers. On Aug. 4, 2004, Griesa ordered 29 Chinatown retailers selling counterfeit Louis Vuitton and Fendi merchandise to each pay LVMH Moët Hennessy Louis Vuitton $16 million in statutory damages plus legal fees — an award of more than $464 million. Griesa found in favor of Rolex on the same day in a separate case, ordering three Chinatown retailers to each pay Rolex $10 million plus legal fees, or more than $30 million. None of the defendants were identified in either case. However, LVMH and Rolex are continuing to pursue action against the retailers’ landlords.
“What you’re seeing here reflects the changing trend in the way companies are approaching counterfeiting actions,” said Gerald Ferguson, an intellectual property partner with Baker & Hostetler LLP here. “Historically, as soon as you got your seizure orders and you got the product, that was the end of the case. What we’re seeing is that the industry is getting a lot more aggressive in pursuing money judgements on the theory of getting every disincentive they can.”
This story first appeared in the January 25, 2005 issue of WWD. Subscribe Today.