Gucci Won $144M Lawsuit Against Counterfeiters

It is making (fashion) headlines that Gucci won a nearly $150 million dollar award in a recent counterfeiting case. On Wednesday, Gucci America Inc. was awarded $144.2 million in damages by the US District Court Southern District of Florida, against several websites/companies engaged in an online counterfeiting scheme. The sites at issue were registered in Britain, Canada, the Cocos Islands, France, Italy, Japan and the United States. They bore Gucci campaign advertisements, logos, product images and descriptions from official websites, and many also used Gucci in their domain name. A total of 155 domain names, whose operators did not show up in court (as is pretty customary in cases like this), have been ordered to shut down within 30 days from Wednesday, and Gucci has been granted ownership of those domains.

As for the $144 million dollars. Gucci won't see even a fraction of that amount for a couple reasons.

One - no one showed up in court, and so, there is no one to necessarily hold accountable. Quite often, websites selling counterfeit goods are registered under fake names and contact information, and as a result, when lawsuits happen, default judgments are awarded because very few, if any, of the defendants actually show up in court.

Two - while the U.S. has put Operation in Our Sites into effect, that isn't actually much help anymore. Operation in Our Sites is a government initiative that allows U.S. Immigration and Customs Enforcement to work with PayPal to seize funds in the accounts associated with the individuals and the websites  selling counterfeit goods. However, it seems the individuals who run these websites, many of which are owned and run by the same individuals/companies, seem to have caught on and remove any large sums of money from their accounts. As a result, only small amounts of money, say $200, are often seized from these accounts. As a result, that $144 million dollars that Gucci was awarded is likely not even going to amount to $1 million.

Thus, the big reward it seems in cases like this are the domain names. As a result of such court proceedings, legitimate trademark holders, such as Gucci, are able to obtain ownership of the domain names, many of which include the word "Gucci," and also prevent these sites from operating on that specific domain. At the same time, however, these individuals often have many, many more counterfeit-selling sites up and running already and if not, will have more in a very short time. So, while these lawsuits are a win for fashion brands, don't be fooled by the big judgment awards.