The battle over the sale of counterfeit goods on online marketplace platforms does not appear to be waning at all. Not only are brands taking action against individual sellers — and in the case of Kering v. Alibaba, the platforms themselves — but platforms are looking to hold sellers accountable in light of diminishing consumer confidence as to the legitimacy of the goods being offered for sale.
On the sportswear front, Adidas is facing some legal troubles of its own — and it’s not alone. Puma lost another round in its fight against Forever 21’s Fenty copies, and somewhat ironically, Adidas is actually on the receiving end of a lawsuit this time around.
The Fight Against Fakes: Online Marketplace Edition
Online marketplaces such as Alibaba, Amazon and eBay have lately been particularly vocal in their quests to fight counterfeits on their platforms. EBay introduced a new service this year in which sellers can pay to have the platform authenticate their products, thereby providing consumers with confidence as to the legitimacy of the goods. Alibaba has revealed its various steps in fighting fakes, including filing a small handful of lawsuits against sellers on its platform. Seattle-based Amazon — which has struggled with the widespread availability of counterfeit goods on its site, largely since it began allowing Chinese entities to join as third-party sellers — said it was expanding a program to remove counterfeit goods from its web site this spring as part of a broader push to weed out fake goods.
Yet brands are not necessarily taking these e-commerce giants’ assurances at face value, and their approaches have varied. Conglomerate-owned labels, such as those that are part of Kering and LVMH Moët Hennessy Louis Vuitton, have opted to take legal action against the platforms. As of now, the case filed by Kering’s Gucci, Balenciaga, YSL and Bottega Veneta against Alibaba is still under way in federal court in New York.
Other brands have distanced themselves from these sites entirely: Roughly a year ago, for example, Birkenstock severed ties with Amazon. Plagued by counterfeits and unauthorized distribution on the Jeff Bezos-launched web site, the footwear company said as of Jan. 1, 2017, it would no longer supply products to Amazon.
One of the more common tactics has seen brands filing suits against individual users of the e-commerce marketplaces. Chanel is the latest to do so, naming 48 Amazon users — from “Mystery Man. Das” and “Xiaotiao Bao” to “Luxury bags monopoly” and “CC bags” — in a new trademark infringement and counterfeiting lawsuit filed this past week in a federal court in Southern Florida. Not surprisingly, given existing precedent in the U.S., namely the Tiffany & Co. v. eBay case, Amazon is not named in the Paris-based brand’s lawsuit.
In this same vein, Amazon has attempted to fight public perception of the widespread availability of fakes on its platform by filing its own suits against such users. In November 2016, Amazon filed two lawsuits against individual sellers of counterfeit products, claiming that more than 20 companies and individuals were involved in selling counterfeit exercise and furniture moving equipment.
The Sportswear Giants Keep Losing
Puma and Adidas are being dealt one blow after another recently. Over the past week, the German activewear giants have landed on unfavorable sides of the law, with litigious Adidas being slapped with a lawsuit and Puma losing yet another round in the case it filed against Forever 21.
Rather ironically given its history of intensely calling “Copy!” in trademark lawsuits initiated against brands ranging from Marc Jacobs to Juicy Couture, Adidas has, itself, been named in a trademark infringement lawsuit. MCH Swiss Exhibition (Basel) Ltd., the owner of the famed international art fair Art Basel, filed suit against Adidas alleging that it “willfully distributed at least 1,000 pairs of sneakers bearing an unauthorized reproduction of plaintiffs’ registered and incontestable Art Basel trademark.”
According to MCH, Adidas never procured authorization to use the fair’s name, which was stitched into the tongue of the limited edition sneakers, and as a result, “deliberately misrepresented an association, partner[ship], sponsorship or other affiliation” between the two that did not exist.
While the shoes never actually made it to stores — they were given away for free as part of a promotion at an Adidas event during Art Basel last year — no shortage of the sneakers found their way to the web. Some have been made available for sale via marketplace web sites, including eBay, fetching around $250 a pair, according to MCH’s complaint.
Puma is not faring much better in its own suit against Forever 21. After filing a copyright, trade dress and design patent infringement lawsuit against the Los Angeles-based retailer, the company has lost one round after the next. California federal court judge Philip S. Gutierrez refused — right off the bat — to grant Puma’s request for a temporary restraining order to require Forever 21 to immediately refrain from selling the allegedly infringing Fenty shoes. As such, Puma was forced to wait and file for a preliminary injunction, which was then rejected roughly two months after the case was filed.
Gutierrez found that such injunctive relief was unnecessary and that monetary damages — if they are warranted at all — will be enough. As a result, Forever 21 may keep on selling the lookalike footwear either forever or until the court orders it not to at the conclusion of a trial, which would not be for quite a while.
Julie Zerbo is the Founder of The Fashion Law.