Women’s clothing designer Tory Burch has been awarded $164 million in damages from online counterfeiters that have been selling copies of her shoes, bags and clothing on the web. According to Women’s Wear Daily, this is the largest amount of money awarded to a fashion designer for damages from online counterfeiters. For background, in 2008, eBay was forced to pay Louis Vuitton $61 million over the sale of counterfeit bags and accessories on the auction marketplace.
Tory Burch filed lawsuit in December 2010, alleging trademark counterfeiting and cybersquatting by a group of counterfeiters (believed to be based in China) that had set up hundreds of websites selling fake Tory Burch goods.
In addition to monetary damages, the court ordered that 232 domain names that were being to used to sell counterfeit Tory Burch products be permanently disabled and turned over to Tory Burch. The financial accounts used to sell the counterfeit goods were restrained as well. And the court has also allowed for Tory Burch to disable additional rogue websites that the counterfeiters set up in the future without needing a new lawsuit.
Tory Burch Chief Legal Officer Robert Isen tells WWD’s Alexandra Steigrad that the inspiration for the case was a judgement in favor of Polo Ralph Lauren and The North Face against a ring of 130 Chinese cybersquatters. The two brands were awarded $78 million as well as the ability to collect money from payment services that were used on the sites, like PayPal.
Isen says that so far, Tory Burch has collected hundreds of thousands of dollars from PayPal, which many of the online counterfeiters used to collect funds for goods from customers.
What’s interesting about the ruling is how the massive amount in damages will affect future rulings against online counterfeiters. And that online payements companies like PayPal are also held accountable. Clearly, the precedent is set and I wouldn’t be surprised if we see similar lawsuits (and judgements) in the future.