The COVID-19 crisis may be putting a sizable dent in fashion industry revenues, with the fashion and luxury goods segments slated to lose between $450 and $600 billion in sales in 2020, but that is not stopping brands from enforcing the rights they have in their valuable trademarks. In a multi-million trademark infringement and counterfeiting complaint filed in a federal court in Florida late last week, Versace is calling foul on dozens of counterfeit-sellers, alleging that “like many other famous trademark owners in the luxury goods market, Versace suffers ongoing daily and sustained violations of its trademark rights” at the hands of bad actors.
According to Versace’s recently-filed complaint, the defendants, who are identified almost exclusively by domain name, are “wrongfully reproducing and [using] counterfeit Versace trademarks” – from the brand’s well-known name to its protected Greca chain pattern – in connection with the sale of “inferior quality garments and accessories for the twin purposes of duping and confusing the consuming public; and earning substantial profits across their e-commerce stores.”
To be exact, Versace claims that in furtherance of their digital scheme, the defendants are using its “famous brand name and trademarks to drive internet consumer traffic to their e-commerce stores,” thereby, “decreasing the size and value of Versace’s legitimate marketplace and intellectual property rights at Versace’s expense.” More than that, the Versace asserts that the defendants are also “directly engaging in unfair competition with Versace by advertising, offering for sale, and selling goods bearing and/or using counterfeits and infringements of one or more of Versace’s trademarks to consumers in the U.S.,” where the brand says that it has “spent millions of dollars promoting the Versace trademarks and products bearing the Versace Mark,” and where the “annual sales of products bearing the Versace trademarks have totaled into the hundreds of millions of dollars.”
By using Versace’s trademarks “to initially attract online consumers, drive them to [their] e- commerce stores,” and ultimately, offer for sale and sell “different quality goods [that bear] identical copies of one or more of Versace’s trademarks,” the defendants are “likely to cause confusion of consumers at the time of initial interest, sale, and in the post-sale setting,” according to Versace, which argues that consumers “will believe all of the defendants’ goods … are genuine goods originating from, associated with, and/or approved by Versace.”
In addition to harming consumers, the defendants are “causing individual, concurrent and indivisible harm to Versace” by “depriving Versace and other third parties of their right to fairly compete for space within search engine results and reducing the visibility of Versace’s genuine goods on the web; causing an overall degradation of the value of the goodwill associated with the Versace trademarks; and increasing Versace’s overall cost to market its goods and educate consumers about its brand via the Internet.”
Versace argues that the “in order to combat the indivisible harm caused by the combined actions of the defendants and others engaging in similar conduct, [it] expends significant monetary resources in connection with trademark enforcement efforts each year,” particularly since “the exponential growth of counterfeiting over the Internet has created an environment that requires companies, such as Versace, to expend significant time and money across a wide spectrum of efforts in order to protect both consumers and itself from the ill effects of confusion and the erosion of the goodwill connected to the Versace brand.”
With the foregoing in mind, Versace sets forth claims of trademark infringement and counterfeiting, false designation of origin, and unfair competition, and has asked the court for injunctive relief, which would immediately and permanently prevent the defendants from engaging in such counterfeiting and infringement. Additionally, the Italian brand is seeking an order requiring the defendants to pay up “all profits and damages resulting from [their] trademark counterfeiting and infringing and unfairly competitive activities,” or to pay statutory damages in the amount of $2,000,000 per each counterfeit trademark used and product type sold.
*The case is Gianni Versace S.R.L. v. The Individuals, Partnerships and Unincorporated Associations Identified on Schedule “A,” 0:20-cv-60618 (S.D. Fla.).