Damages for Counterfeit Goods – A Significant Award

Louis Vuitton Malletier S.A. et al v. Yang et al. provides a useful analysis of the damages that can be awarded against a Defendant trading in counterfeit goods.

In this case, the owners of the well-known brand had been attempting since 2001 to stop the sale of counterfeit goods at K2 Fashions, a Richmond, British Columbia retail store, having obtained two previous judgments, having sent numerous letters and having made a number of seizures. This latest action, against the persons who controlled and operated the business and premises, was not defended and the Plaintiffs brought a motion for default judgment, including an assessment of damages.

The Federal Court concluded that the Defendants had been properly served and the time to file a defence had expired. The Court was also satisfied that infringement was established.

The Court then assessed damages for both copyright and trademark infringement.  

The Plaintiffs had elected an award of statutory damages pursuant to section 38.1 of the Copyright Act. After considering the relevant factors set out in section 38.1(5) (the good or bad faith of the Defendant, the conduct of the parties during the proceedings and the need to deter other infringements of the copyright in question), the Court concluded that the Plaintiffs were entitled to the statutory maximum of $20,000.00 for each of the two copyrighted works at issue.

With regards to trademark infringement, the Court concluded that it could not quantify the damages suffered by the Plaintiffs, it being difficult to determine what depreciation of goodwill or loss of sales may have occurred.

The Court chose instead to assess the profits made by the Defendants “based on the best available evidence, reasonable inferences, the Plaintiffs’ experiences in similar situations and a dose of common sense”. However, since its estimate of $76,000.00 was only the minimum, the Court applied a “nominal award per infringing activity” and assessed damages at $87,000.00. To this the Court also added punitive damages of $100,000.00, being satisfied that the requisite elements were present (conduct that was planned and deliberate, outrageous conduct over a lengthy period of time, an attempt to conceal, an awareness by the Defendants that they were wrong, and profiting from the misconduct).

Finally, the Court awarded solicitor and client costs of $36,699.14, given the Defendants’ intentional infringement and ongoing behaviour that was “scandalous and outrageous”.

The total judgment amounts to $263,699.14.

A Globe & Mail article notes that this is believed to be the “highest amount ever awarded in an undefended action involving counterfeit goods”. Clearly, the Court is sending a message that counterfeiting should and will be treated harshly.

Another RIM Trademark Suit

In a complaint filed in the U.S. District Court for the Central District of California, Research In Motion (“RIM”) based in Waterloo, Ontario, is again alleging that another company is using trademarks that are similar to those used by RIM. In this most recent complaint, RIM seeks to prevent LG Electronics Inc. from using such names as Black Label, Strawberry and Black Cherry. An earlier claim brought against Samsung Electronics regarding its use of the mark BlackJack was settled earlier this year.

Olympic Trademark Legislation Closer to Becoming Law

Following up on an earlier story regarding the unique aspects of Bill C-47, we note that the Olympic and Paralympic Marks Act, has now received Royal Assent. We understand that the legislation has not yet come into force by order of the Governor in Council, as required by section 15 of the Act, and that regulations are contemplated.

While similar legislation has been enacted in other Olympic host countries in recent years, the removal of the normal requirement that the Canadian Olympic Committee, the Canadian Paralympic Committee or the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (“VANOC”) prove irreparable harm in order to obtain an injunction has certainly raised some eyebrows in the legal community.

The controversy noted earlier continues, as evidenced in an article in the Globe and Mail, “Olympics Bill Toughens Trademark Muscle“.

London Olympic Brand Under Fire

We recently reported on concerns that the Vancouver Organizing Committee for the 2010 Olympic Games has regarding ambush marketing.  Ambush marketing occurs when persons who are not properly licensed, market their wares and services in a manner which suggests a connection with the Games, often resulting in trade-mark infringement of protected Olympic marks.

Now it appears the that London Organizing Committee for the 2012 Olympic Games may face the opposite problem. The official emblem for the 2012 Olympics, which is a coloured jagged design based on the date 2012, was unveiled on Monday. However, animated footage promoting the brand launch had to be quickly removed from the organizers’ website amid fears it could trigger epileptic fits. The particular footage showed a diver diving into a pool which had a multi-colour ripple effect. The emblem itself, which cost £400,000, is also attracting the wrong kind of attention. Only two days after its launch, nearly 50,000 people had signed an on-line petition to have the logo scrapped, describing it as “ridiculous” and “an embarrassment to London”. The UK Daily Mail newspaper called it “the work of a painting chimp”.

There was controversy when the symbol for the Vancouver Games was first introduced, but that was mild in comparision.

More Olympic Trade-mark Issues

Protecting the official trademarks of the Olympic Games is proving to be an ongoing challenge for the organizers of the Beijing 2008 Games, as well as the Vancouver 2010 Games. We reported some time ago regarding possible new Canadian legislation. Beijing organizers are now threatening legal action against pranksters that are using the Internet to poke fun at several of the official marks of the Beijing Games.

The website of the Vancouver Organizing Committee includes a 36-page list setting out the official marks of the Vancouver Organizing Committee and the Canadian Olympic Committee, including the Beijing Games marks that are currently being targeted. A portfolio of that size will likely generate some interesting new developments in trademark law as we draw closer to the 2010 Games.

RIM Battles Samsung Over Use of BlackJack

Canadian based Research in Motion is suing Samsung over its use of the mark BlackJack in association with a recently launched smart phone device. The Samsung smart phone competes directly with RIM’s BlackBerry Pearl smart phone. In the lawsuit, filed in California, RIM argues that the BlackJack name will cause confusion with consumers who are familiar with the established BlackBerry brand, as well as constituting false designation of origin, unfair competition and trademark dilution.  Interestingly, both devices are offered on Cingular’s network in the U.S.