Audemars Piguet Wins $11 Million in Counterfeit Case

Audemars Piguet Holding SA has won nearly $11 million in a trademark infringement lawsuit in the Southern District of New York. The Swiss watchmaker filed suit in suit in July 2012 against Swiss Watch International, Inc. and ILS Holdings (the company behind worldofwatches.com and "Swiss Legend"), alleging that the companies "intentionally and knowingly" sold counterfeit versions of its Royal Oak Watch, which generally start at $20,000, in violation of an array of federal trademark and trade dress registrations.

According to Audemars' complaint, "No defendant in this action has saught or received a license from Audemars Piguet for any purpose whatsoever" and that the sale of such watches by the defendants "is likely to cause confusion, mistake, or to deceive the consuming public into believeing that such items origiante from or are sponsored by or associated with [Audemars]".

U.S. District Judge Loretta A. Preska ruled on the case in January but this week brought news of the damages award, including $10.9 million in damages in the trade dress infringement suit. That damages amount includes profits that the defendants derived from the sale of the counterfeit watches and damages sustained by Audemars in connection with such sales. This is pretty standard. But it doesn't end there.

Judge Preska also awarded Audemars additional damages; namely, treble and punitive damages. Put very simply, these are both forms of special damages awarded in addition to actual damages. Punitive damages are may be awarded in addition to actual damages in certain circumstances when the court deems the defendant's behavior to be especially harmful. Treble damages may be awarded if the requisite statute permits, and allow a court to triple the amount of damages awarded in cases where the defendant acted willfully and in bad-faith, as the court found here. And finally, the court further ordered Swiss Watch to pay $888,000 in attorneys’ fees and costs.

Unlike the big design houses that win large judgments in counterfeit-related cases, but are rarely able to collect any of the funds, as the defendants are located outside of the U.S., both outside of the court's jurisdiction and often extremely difficult to locate, Audemars may be able to collect here. Turns out, not only were the two companies responsible for the sales named as defendants in the lawsuit, Lior Ben-Shmeul was, too. Ben-Shmeul, who serves as the President and CEO of Swiss Legend and worldofwatches.com, is a U.S. resident doing business in Florida, which gives Audemars a much greater chance of actually seeing some of the damages award.