Salvatore Ferragamo is on the receiving end of “the highest ever [amount of damages] awarded for this type of violation” in connection with a recently decided counterfeiting case, the brand’s Chairman and CEO, Ferruccio Ferragamo, said on Monday. The Italian design house, which filed a counterfeit and trademark infringement lawsuit against the 60 unidentified operators of over 100 counterfeit-selling websites in a New York federal court this time last year, was handed a default judgment by Judge Richard J. Sullivan after none of the defendants responded to the lawsuit or appeared in court (as is customary in cases like this).
While Salvatore Ferragamo will likely see only a small fraction of the $60 million damages amount that the court awarded late last month, Ferruccio Ferragamo told WWD that the brand is “extremely pleased with the decision of the New York court,” which, in addition to whatever monetary sums that can be accessed by way of the defendants’ linked PayPal and bank accounts, includes a permanent injunction barring the defendants from further infringing Ferragmo’s trademarks. Still yet, Ferragamo has been granted ownership of the domains at issue.
The suit at hand, with its $60 million damages award, comes on the heels of similarly eye-popping judgments for fashion brands, including Louis Vuitton, Chanel, Christian Dior, and Hermes, among others. These types of cases are quite common for large design houses, and they all tend to play out in the exact same way in large part because the counterfeit-selling defendants are able to hide fake names and fictitious contact information, and as a result, when lawsuits are filed, default judgments are awarded because very few, if any, of the defendants have incentive to actually show up in court.
All the awhile, the operators of these individual sites tend to maintain huge networks of counterfeit-selling sites already up and running and if not, will have new sites to replace the court-seized ones in a very short time.
Why do brands continue to file these arguably rather fruitless cases, you ask? Well, they do it because these rather uncomplicated matters are a relatively inexpensive way to send a message of deterrence to counterfeit-sellers.
As Todd Kahn, General Counsel of Coach, was quoted in 2012 in connection with a press release announcing that the New York-based brand was awarded a $257 million default judgment in a counterfeiting case, “The magnitude of this judgment underscores the severity and illegality of counterfeiting, and sends a clear message that our courts will enforce the law. This judgment should serve as a warning to everyone involved in any aspect of trafficking in counterfeit goods that Coach will find you and will seek to impose the harshest penalties available against you.”
Given that the number of counterfeit goods seized in the U.S. last year grew by 10 percent compared to 2016, with the apparel and accessories being the merchandise category with the highest number of seizures, it is another matter entirely as to whether these types of suits, in particular, are actually proving to be an effective form of deterrence.
* The case is Salvatore Ferragamo S.p.A. v. Does, 1:17-cv-01612 (SDNY).