By  on April 6, 2005

NEW YORK — Another Chinatown landlord is feeling the heat from LVMH Moët Hennessy Louis Vuitton’s legal department.

In a complaint filed in Manhattan federal court, Louis Vuitton Malletier — LVMH’s fashion and leather goods division — named landlord Richard E. Carroll as the lead defendant in a case involving the alleged sale of counterfeit goods out of seven Canal Street retail locations. More than 8,000 LVMH-branded goods were seized in raids at these locations. Also named in the complaint are five real estate companies, all of which it alleges Carroll is in charge of, as well as two retailers and several named individuals.

Carroll did not return a call seeking comment at press time. A representative at Canal Sound City, one of the named retailers, declined to comment.

According to intellectual property lawyers, the case reflects a growing trend where major design labels combat counterfeiters by holding landlords accountable for the actions of their tenants.

“The designers have gotten together and decided to make use of the landlord liability doctrine,” said Joseph C. Gioconda, a partner with Kirkland & Ellis LLP. “The concept is that the landlord becomes a contributory infringer when the landlord provides what is essentially a safe haven for people to engage in the sale of counterfeit goods.”

LVMH set out to address the landlord’s accountability from the first paragraph of its complaint, characterizing their role in the problem as an “unlawful alliance between certain real estate companies and their principal owners and the unscrupulous storefront retailers to whom they rent property.”

According to the complaint, Carroll and his companies — Mid-Center Equities Associates, Canal Funding Inc., Canal Venture Inc., EJP Realty Associates LLC and Transworld Equities Inc. — own and control seven Canal Street properties where the counterfeit LVMH products were seized.

Eight pages of the complaint, which was filed March 30, are devoted to a breakdown of the number and type of counterfeit goods seized in each location. The largest seizure occurred in June 2004 at 386 Canal, yielding more than 5,600 items, including nearly 1,000 Louis Vuitton watches and hundreds of scarves, bags, wallets and jewelry.

The suit contends that Carroll had been sent written notices from LVMH and “other trademark holders” about what was going on at his properties and should be held accountable for his “willful blindness” in allowing the activity to continue. LVMH alone sent six letters starting in October 2004, according to the complaint.

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