IP Law Daily, TRADEMARK—S.D. Fla.: Tory Burch counterfeiter’s asserted innocent intent no defense to infringement claims, (Nov 5, 2018)

By Robert Margolis, J.D.

A seller of counterfeit Tory Burch products on eBay cannot avoid infringement liability by claiming that she thought her conduct was legal, a federal district court in Miami has held. The court granted Tory Burch’s summary judgment motion on its Lanham Act claims for trademark infringement, unfair competition, counterfeiting, dilution, and false advertising, as well as for copyright infringement (River Light V, L.P. v. Tanaka, November 2, 2018, Scola, R.).

Since 2004, Tory Burch has, through use of its distinctive and famous logo as well as its investment of time and hundreds of millions of dollars in advertising, developed into a billion dollar fashion company selling distinctive handbags, wallets, jewelry, clothing, footwear, accessories, eyewear, fragrance, housewares, and other products. Tory Burch sued Emily Guzman Tanaka in federal district court, claiming that she operates an extensive counterfeiting operation, which includes selling counterfeit Tory Burch products on eBay. The parties cross-moved for summary judgment on all of Tory Burch’s claims.

Trademark infringement. The court granted Tory Burch’s summary judgment motion on its infringement claim. Tory’s Burch’s registration of its logo in 2009 and its continuous use since renders it incontestable. The rejected Tanaka’s argument that seeing other eBay sellers "reselling" the same items as her somehow allowed her to assume her sales were legal. Even if she held that belief, it would not overcome Tory Burch’s showing that it owns valid and enforceable trademark rights, the court held.

The court then evaluated several likelihood of confusion factors to determine that Tanaka’s products are confusingly similar to Tory Burch’s. Tory Burch’s logos are strong marks, the court found, given their worldwide recognition and significant unsolicited media attention. Tanaka did not dispute that the marks on her products are identical to Tory Burch’s. The court also found that Tanaka’s products were "knock-offs" of genuine Tory Burch products. Even if some of Tanaka’s sales were resales of products she purchased from authorized Tory Burch sellers, that would not defeat her liability for the other, infringing, sales, the court held.

As for similarity of marketing channels, Tanaka argued that merely listing items for sale on eBay is not "advertising," a contention that the court found to be "unworkable." Listings on eBay are a form of advertising, and when the parties are direct competitors, courts presume they use similar methods of doing business using similar advertising channels, according to the court. The court next found "overwhelming" evidence of Tanaka’s bad faith, in that her products feature counterfeit packaging, which includes a tag on each item providing that the item was "100% guaranteed authentic."

Finally, given the "compelling evidence" that Tanaka was attempting to palm off her goods as genuine Tory Burch products, the fact that Tory Burch did not provide evidence of actual consumer confusion was not fatal to establishing likelihood of confusion. Tory Burch’s in-house counsel provided a declaration showing a side-by-side comparison of Tory Burch products with Tanaka’s, including Tanaka products bearing a Tory Burch logo. The court found this evidence sufficient to establish Tanaka’s infringing conduct.

Unfair competition. Because the legal standard for unfair competition is the same as trademark infringement, the court granted summary judgment to Tory Burch on this claim as well.

Counterfeiting. Tanaka did not dispute that she sold items bearing marks identical to, and substantially indistinguishable from, Tory Burch’s marks. The evidence described above of the side-by-side comparison of Tanaka’s and Tory Burch’s products sufficiently established this, the court found.

Dilution. The court also granted Tory Burch summary judgment on its claim that Tanaka diluted its marks by "blurring"—using Tory Burch’s mark to identify her goods in a way that creates the possibility that the mark will lose its ability to serve as a unique identifier for Tory Burch. Tory Burch established (1) that the marks on the parties’ products are identical; (2) Tory Burch’s marks are famous and commercially strong; (3) Tory Burch has engaged in substantially exclusive use of the marks; (4) the public recognizes and associates Tory Burch’s marks with its products; (5) Tanaka acted in bad faith, including by passing off her products as "100% guaranteed authentic"; and (6) potential customers would associate Tanaka’s products with Tory Burch’s. The fact that others on eBay were using the mark did not serve as a defense, the court held.

False advertising. The court granted Tory Burch summary judgment in its false advertising claims (federal and state), citing Tanaka’s false "Guaranteed Authentic" statements in advertising her products. Because those representations are false, Tory Burch did not need to show actual consumer deception, the court noted. Tanaka’s deception was material, the court found, because representations about "authenticity" concern an inherent quality or characteristic of the products, and influenced purchasing decisions.

Copyright infringement. Tory Burch has a copyright registration for its logo, which it established Tanaka had copied and affixed to her products. Thus, the court granted Tory Burch summary judgment on this claim as well.

Affirmative defenses. Tanaka contended that she should not be liable because she believed her transactions were legal. But because trademark and copyright infringement are strict liability torts, her state of mind is irrelevant, the court held. The court also rejected her defenses of equitable estoppel and waiver. She made no showing that Tory Burch made any material factual representations to her on which she relied, or that Tory Burch intended to waive any rights.

This case is No. 1:17-cv-22843-RNS.

Attorneys: David Kenneth Friedland (Friedland Vining, PA) for River Light V, LP and Tory Burch LLC 1. Heather Norton (Law Office of Heather Norton) for Guzman Emily Tanaka.

Companies: River Light V, LP; Tory Burch LLC 1

Cases: Copyright Trademark FloridaNews