While most fashion brands are busy filing lawsuits against long lists of China-based online counterfeit sellers, Michael Kors is taking its fight against fakes to the streets of New York. Michael Kors filed suit last week in a New York federal court, alleging that “certain areas of New York City have long been major distribution hubs for counterfeit goods that are sold throughout the United States,” and that its brand, in particular, “has been plagued by the sale and distribution of counterfeit goods at locations all over New York City for years.”
In its complaint, Michael Kors alleges that Amush Enterprises and a number of other defendants, who own one specific building in New York’s Chelsea neighborhood, “have turned a blind eye to the ongoing sale of counterfeit goods at the property.” According to Kors’ complaint, “Amush Enterprises and the other defendants have allowed a revolving door of counterfeiters to rent or lease space at [155 West 29th Street] since as early as 2007.”
Michael Kors asserts that on multiple occasions, including in April and November 2017 and in September 2018, it has “conducted civil seizures of counterfeit goods bearing [its] federally registered trademarks,” including handbags, watches, fragrances, wallets, footwear, and eyewear, as well as tags that include Michael Kors’ federally-protected trademarks, “in the space rented or leased by” to New York-based company Am-Tex Apparels and other unnamed defendant counterfeit-sellers.
Despite its seizure of “thousands of counterfeit goods … from the space at the property” and its repeated notification of “the defendants of their tenants’ illegal activity,” Michael Kors claims that Amush Entertprises has “ignored [its] correspondences” and “done nothing to stop the ongoing counterfeiting activity at the property.”
As a result, Kors is demanding in its complaint – which sets forth claims of trademark counterfeiting, infringement, and dilution – that Amush Enterprises and any other owners of the building “be held accountable for their complicity in these illegal activities.” In particular, Kors has asked the court to find Amush Enterprises and other defendant owners “contributorily liable for [their tenants’] counterfeiting of [Michael Kors’] federally registered trademarks and for any damages resulting from such counterfeiting activities.”
The case harkens back to a flurry of similar lawsuits filed by fashion brands against landlords and flea market owners, alike, in the early 2000’s, alleging that the property owners should be held contributory liable for counterfeit sales by their tenants because they benefited financially from such tenants (and their activities).
In one such case, which was filed by Louis Vuitton, a New York federal court held in 2005 that Richard E. Carroll, the owner of seven Canal Street properties, was, in fact, liable for his tenants’ counterfeiting because he derived benefit from their presence and “proactively relocated tenants from one property to another to greater conceal infringing activity.” In accordance with the court’s decision, Carroll was forced to evict all tenants found selling counterfeit Louis Vuitton goods, include specific language in all new leases prohibiting the sale of counterfeit goods, and require tenants to submit to random spot-checks of their stores to detect infringing activity.
* The case is Michael Kors, LLC, v. Amush Enterprises, LLC; the Credit Shelter Trust for the benefit of Sophie Garfinkel under the will of Jehuda Garfinkel; Pearl Garfinkel and Steven L. Topal, each individually and in their capacities as trustees of the Credit Shelter Trust for the benefit of Sophie Garfinkel under the will of Jehuda Garfinkel; Am-Tex Apparels Inc.; and John Does, Jane Does, and/or Xyz Companies 1-4, 1:18-cv-09341 (SDNY).