WWD.com/business-news/designer-luxury/burberry-scores-100-million-judgment-5916060/
government-trade
government-trade

Burberry Scores $100 Million Judgment

A Manhattan federal court awarded the British brand damages and a permanent injunction against Chinese Internet counterfeiters.

Rack one up for the Burberry check.

This story first appeared in the May 18, 2012 issue of WWD.  Subscribe Today.

Burberry Ltd. scored a $100 million default judgment in Manhattan Federal court Thursday against a network of Chinese Internet counterfeiters, selling goods that infringed upon the brand’s trademark.

The defendants sold at least 22 distinct types of goods, each bearing numerous counterfeits of Burberry trademarks, including imitations of the brand’s plaid check and its equestrian knight design.

The judgment follows several static months spent waiting for a response from the defendants.

RELATED STORY: INTA Launches Anticounterfeiting Effort >>

According to presiding Judge Thomas Griesa, the defendants, who ran Web sites such as yesburberryvision.com and buyburberry.com, had not only failed to appear in court when summoned earlier this year, but they also failed to answer the complaint, which was filed in January.

As a result, the judge awarded Burberry the princely sum of $100 million, as well as any monies held by payment service provider, PayPal Inc.

Awarding damages held by third-party payment processors is part of a developing trend, as it is almost impossible for brands to collect from Web operators located overseas.

In addition to damages, Judge Griesa granted a permanent injunction and ordered that the infringing domain names be transferred to Burberry. This allows Burberry the power to stop Internet service providers, Web designers, sponsored search engine or ad-word providers, merchant account providers, payment processors and others from doing business with the defendants in this matter.

Working with the court, Burberry will also have the ability to shut down any related offending Web sites, and it will be able to hold third-party hosts; payment processors; search engines, such as Google, and social media sites, such as Facebook and Twitter, accountable for associating with the infringing sites.

Accountability comes in the form of no longer providing services to the infringing parties or eliminating their sites from Web searches altogether.

The ruling is nearly identical to decision last month in favor of Hermès International, which also won a $100 million judgment against 34 counterfeit Web sites. In both cases, the judges called out Internet search engines, ad-word providers and social media sites, effectively casting a wider net of accountability when it comes to Internet counterfeiting.

Previously, the courts had focused mainly on holding payment processors, Internet service providers and domain name registrars liable.