In something of a first for Amazon, the Seattle-based e-commerce giant has teamed up with a fashion brand to wage a legal battle centering on the sale of fakes on its sprawling third-party marketplace platform. According to a newly-filed trademark infringement, counterfeiting, and patent infringement complaint filed in a federal court in Washington on Thursday, Amazon and Italian fashion giant Valentino allege that defendants Kaitlyn Pan Group, LLC and Hao Pan “introduced a line of shoes,” which they have actively advertised and sold on their own site, as well as on Amazon. The problem? The stud-accented footwear blatantly copies “the iconic look and design of Valentino Garavani Rockstud shoes,” and makes use of one of Valentino trademarks, thereby, “infringing Valentino’s trademark rights and design patents.”
In the 36-page complaint, Amazon and Valentino assert that “in or around March 2019,” Valentino discovered that Kaitlyn Pan Group, LLC and Hao Pan were selling lookalike footwear using Valentino’s “Rockstud” trademark on Amazon’s marketplace site, and “conducted a test purchase from the defendants … of a product that [was being] advertised as a ‘RockStud Slingback Leather Pump.” Upon receiving and examining the shoes, Valentino – which does not stock its products on Amazon’s marketplace – “determined that the product sold by the defendants was a counterfeit,” which prompted counsel for Valentino to send a cease and desist letter to the defendants, alerting them of its rights in the footwear designs and in its “Rockstud” trademark, and to demand that they immediately and permanently cease their sales of the infringing shoes.
On the heels of Valentino’s letter, Amazon claims that it similarly put the defendants on “notice” regarding what the plaintiffs characterize as their “knowing and willful” manufacture and sale of the allegedly counterfeit footwear. The plaintiffs assert that despite such notice, Kaitlyn Pan Group and Hao Pan sold the allegedly infringing products “up and until September 25, 2019,” when Amazon – “exercising its rights under [its third-party seller agreement] to protect its customers, Valentino, and the integrity of its store” – shut down the defendants’ account.
In addition to breaching “numerous provisions” in Amazon’s third-party seller agreement, which “strictly prohibits” the sale of counterfeits (i.e., a “spurious mark [that] is identical with, or substantially indistinguishable from, a registered trademark” that is used on the same types of goods as the ones for which the mark is registered) and entitles Amazon “to injunctive relief to stop the defendants from infringing and misusing Valentino’s intellectual property,” Amazon and Valentino assert in their complaint that the defendants are also running afoul of federal trademark law. They are doing so by using the “Rockstud” mark on lookalike footwear, and thereby, giving rise to a likelihood that consumer may be confused as to the source of the copycat footwear.
More than that, though, Valentino and Amazon claim that the defendants have infringed four of Valentino’s design patents that protect the ornamental elements of its various Rockstud shoes. “Rather than innovate and develop their own shoe designs, the defendants chose to copy the [designs embodied in] Valentino’s design patents” – and to use to brand’s name – to “sell shoes that infringe Valentino’s intellectual property rights through Amazon.com and their website, www.kaitlynpan.com,” the plaintiffs assert.
Finally, the plaintiffs assert that in furtherance of their “bad faith” attempt to bank on Valentino’s intellectual property, Kaitlyn Pan Group and Hao Pan went so far as to filed a trademark application for registration with the U.S. Patent and Trademark Office (“USPTO”) on September 10, 2019 for “ROCK’N STUDS BY KAITLYN PAN,” for use on “footwear; shoes; boots; handbags.” The application, which is currently pending before the USPTO, “fully incorporates Valentino’s [Rockstud] trademark,” the companies claim, and “was filed after the defendants received notice from Valentino of their infringing activities.” (The USPTO issued an Office Action in December 2019, mandating that in order for the mark to proceed, the applicant must disclaim rights in the word “Studs.”).
With the foregoing in mind, Amazon and Valentino set forth claims of trademark infringement, counterfeiting, patent infringement, unfair competition, and breach of contract, with the latter referring to the defendants’ failure to abide by Amazon’s third-party seller agreement. The “defendants also contractually agreed to be bound by the Conditions of Use of the Amazon website,” the plaintiffs assert, which they breached when they began “advertising, selling, and distributing counterfeit Valentino products.”
The parties are seeking injunctive relief to bar the defendants from further “infringing and misusing Valentino’s intellectual property; willfully deceiving Amazon and its customers; attempting to compromise the integrity of Amazon’s store, [thereby] risking undermining the trust that customers place in Amazon and Valentino; and harming Amazon and Valentino and their customers.” Amazon asserts in the complaint that while it permanently shut down the defendants’ seller account, “in [its] experience, it is not uncommon for bad actors who attempt to sell counterfeit and infringing products and are blocked by Amazon to then attempt fraudulently to create new selling identities to obtain access to the Amazon store.”
As a result, the plaintiffs argue that “unless the defendants and all of their affiliated and/or successor entities are immediately and permanently enjoined [by the court] from using Amazon’s store to sell goods, the harm [that they have] caused to Amazon, legitimate third-party manufacturers/sellers like Valentino, and consumers is likely to continue.” Additionally, Amazon and Valentino claim that they are entitled to monetary damages in a sum to be determined at trial, but which could easily reach into the millions based on the various statutory damages at play.
In a statement released in conjunction with the case, Dharmesh Mehta, Amazon’s vice president of Customer Trust and Partner Support, said, “The vast majority of sellers in our store are honest entrepreneurs but we do not hesitate to take aggressive action to protect customers, brands, and our store from counterfeiters. Amazon and Valentino are holding this company accountable in a court of law and we appreciate Valentino’s collaboration throughout this investigation.”
The suit comes as Amazon has tried – and save for some very recent exceptions, largely found it difficult – to win over fashion industry entities, with luxury giants like LVMH Moët Hennessy Louis Vuitton, for instance, explicitly swearing off potential partnerships with the $1 trillion site, and pointing to the prevalence of “counterfeits” on its third-party marketplace as a key part of the issue.
The case is Amazon, Inc. and Valentino S.P.A., v. Kaitlyn Pan Group, LLC and Hao Pan, 2:20-cv-00934 (W.D. Wash.).
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