The North Face Apparel Co. and PRL USA Holdings Inc. recently were awarded a $78 million default judgment over a huge Chinese counterfeit ring that was selling counterfeit versions of their trademark goods via the Internet. The case, filed in the Southern District of New York, marks a huge victory against online counterfeiters and shows that the courts and plaintiffs are becoming savvier when combating online infringement.

The two companies joined forces after determining that 6,500 domain names were marketing or distributing knock-off versions of their popular brands. This meant that the case involved in more than 130 websites that were either advertising the brands via potentially “lifted” images or otherwise selling the counterfeit products.

North Face and Polo alleged that the sites and domain names were actually a network that was mainly traced back to one website, B2BSharing.com. B2BSharing.com is a sophisticated operation that appears to be located in Hong Kong. The sites at issue also sold merchandise bearing other trademarks, including Balenciaga, Louis Vuitton, Gucci, Coach, Ugg, Timberland, Nike and Ed Hardy. The plaintiffs learned that B2BSharing.com is operated by Fujian Sharing Import & Export Ltd., which has an unknown address in China.

As a result of the court’s ruling, any domain name used by the defendants for the sale of counterfeit products will be disabled and transferred to the ownership and control of the plaintiffs. Further, more than 100 payment accounts used by the counterfeit ring were captured and the judge requested that a dollar amount high in the six figures be transferred from the defendants PayPal account to the companies for partial payment. Thus, even though the plaintiffs are not likely to recover even close to the $78 million payout, they will likely receive enough to cover the cost for the plaintiffs to bring the action and will also serve to deter future counterfeiters.

Arent Fox is monitoring this issue. For more details, please contact Anthony V. Lupo or Sarah Bruno.

Anthony V. Lupo
lupo.anthony@arentfox.com
202.857.6353

Sarah L. Bruno
bruno.sarah@arentfox.com
202.775.5760