A federal jury on Friday handed a $32.4 million victory to LVMH Moët Hennessy Louis Vuitton when it found that two service providers that hosted Web sites selling fake goods shared responsibility with the actual counterfeiters.
After two days of deliberations in U.S. District Court in San Jose, Calif., an eight-member jury found that Akanoc Solutions Inc. and Managed Solutions Group Inc., and Steven Chen, manager of the two firms, were liable for contributory trademark and copyright infringement. It awarded the luxury house $32.4 million in statutory damages.
LVMH filed its suit in 2007. In an amended complaint filed in July 2008, the firm alleged Akanoc and Managed Solutions hosted more than 75 commercial Web sites with names like LVBagz.com and Louivuittonbagz.com that offered counterfeit LVMH wares to Internet shoppers.
The luxury brand said it had repeatedly warned the Fremont, Calif.-based Web hosts that sites on their servers sold counterfeit merchandise, but that the two firms continued to allow the sites to function.
“Louis Vuitton had given the defendants very specific notice of the infringing activity and it hadn’t changed,” said attorney Andy Coombs, who argued the case for the luxury house in the two-week trial.
A lawyer for Akanoc, Managed Solutions and Chen did not return a call seeking comment.
The case is one of a number of lawsuits in recent years filed by luxury brands and other intellectual property holders that have targeted trade service providers for their roles in the counterfeit economy. Last month, Gucci America Inc. sued a bank and two card processors it alleged had handled payments to Web sites selling knockoffs.
“It’s like going after the warehouse, instead of the guy on the corner,” said Susan Scafidi, a professor at Fordham Law School who maintains the blog Counterfeit Chic. “It’s much easier to go after that central provider of services instead of going after every tiny retailer.”
Louis Vuitton’s complaint against Akanoc, Managed Solutions and Chen did not specify who actually ran the sites hosted on their servers.
Jurors found LVMH had proven Chen and the two Web hosts knew, or should have known, their customers used their services to infringe on the company’s trademarks.
The jury granted $31.5 million in damages related to trademark infringement and $900,000 for copyright violations.
In its amended complaint, LVMH also sought an injunction barring the three defendants from further contributing to counterfeit sales. The judge hearing the case has not yet ruled on that request. (For more on Vuitton, see page 13.)
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty