Gucci and its parent company have apologized after drawing heavy criticism for threatening legal action against an array of Hong Kong-based shops, accused of selling novelty paper offerings for the deceased that resembled the fashion brand’s luxury products. The brand and its Paris-based owner, Kering, also said in a statement on Friday that they regret any misunderstanding caused by the letters, which were sent to six shops last month. After meeting with the shop owners, “Kering and Gucci would like to reiterate their utmost respect with regards to the funeral context,” the statement said.

In Hong Kong and some other parts of Asia, people burn paper offerings at funerals and during grave-sweeping festivals for deceased relatives to “use” in the afterlife. Specialty shops near funeral parlors sell a diverse array of paper offerings, including bundles of “hell money,” mansions, iPhones, cars, cigarettes and designer handbags.

The PR mess associated with the letters, which were sent as part of the companies’ global intellectual property protection efforts, represents a common woe for trademark owners, who are tasked with the duty to prevent unauthorized uses of their trademarks. Such monitoring and enforcement efforts are essential in order for trademark owners to maintain rights in their marks. Absent such policing efforts, a trademark may become generic in nature and thus, worthless to its owner, which would amount to a significant loss particularly for luxury brand owners, whose brands (and price points) rely on decades – if not centuries – of careful brand building. 

At the end of the day, this situation seems to shed light on the larger dynamics of potential litigation and the multi-faceted approach that smart brands tend to take when deciding if and when to file a lawsuit. Not surprisingly, non-legal concerns come into play when considering whether to file legal action or not. Brands and their legal counsels always balance the resources required to file and actually pursue a lawsuit with the potential outcome to be gained by such a suit – this is a no-brainer.

But then there are things that come into play that must be taken into account, such as an existing symbiotic relationship between the two parties (the potential plaintiff and the potential defendant) and the probable burning of a bridge, so to speak, as a result of the litigation. There is also the potential role that bad press or no press at all could play as a result of filing a lawsuit, which is particularly important in the luxury sector, where bags cost at least $1,000 and dresses even more.