Chanel, Gucci, Louis Vuitton File Suits Against Individual Online Marketplace Sellers

While we are used to seeing design houses file trademark claims against a large number of websites and website operators in connection with the sale of counterfeit goods, it is not quite as commonplace for them to file suit against individual marketplace users, but that may be changing.

It is common, for instance, for Chanel to file suit against a handful of defendants, including replicachanel2015.com, chanelhongkong.com, bagsworld-online.com, chanelcybermonday2014.com, and ichanelsite.com, which are just a few of the 104 sites named in a recent suit that Chanel, Inc. filed in Florida Southern District Court.

Increasingly common is an approach Louis Vuitton first took in July 2013, when it filed suit against individual iOffer users. In case you’re not familiar, iOffer is a San Francisco-based online trading community that consists almost entirely of China-based sellers hawking fake Louis Vuitton, Gucci, Chanel, and just about any designer good you can think of.

Well, it seems others have begun bringing similar lawsuits. Lacoste filed suit against an array of iOffer sellers in December, Gucci filed against iOffer sellers in December, and as of late last month, both Chanel and Adidas have filed suit against a handful of individual Amazon.com and iOffer sellers for offering counterfeit Chanel jewelry and iPhone cases, and fake Adidas wares.

It is interesting that these brands are targeting individual online sellers for selling counterfeit goods, as opposed to suing the main platforms, Amazon and iOffer. As we have seen in previous cases, such as Tiffany & Co. v. eBay, designer brands have filed lawsuits against online marketplace sites in the past, but not individual sellers.

Chances are, the design houses are going by the ruling in the Tiffany case, which found that while a large number of counterfeit goods were being sold on eBay, the online marketplace was not liable for trademark infringement. The Second Circuit found for eBay, holding that eBay had taken the necessary steps in order to combat infringement (namely, implementing VERO, a fraud prevention program, actively pursuing counterfeit Tiffany sellers, etc.), and ultimately held that the duty falls in the trademark holder to police its mark.

This relatively new approach, in which design houses are naming individual sellers (by their user names, of course) as defendants, is an interesting one in terms of the development of tactics for fighting online sellers of counterfeits, but it may not be the most effective. Chances are, the vast majority of the individual sellers will not be identified and even if they are, they will not be located.

As a result, their individuals shops within Amazon and/or iOffer will be shut down (thanks to a court order) and if the Department of Justice, in connection with the National Intellectual Property Rights Coordination Center, can locate funds that these sellers have amassed from the sale of such counterfeits, they will be turned over to Chanel or whatever design house filed suit. The result of these lawsuits should provide some helpful guidance regarding litigation involving individual online marketplace sellers.