Cartier clocks up massive win against counterfeiters

Judge Thomas P Griesa of the US District Court for the Southern District of New York has given new hope to trademark owners looking to protect their marks against manufacturers of replicas. In Cartier International v Liu (unpublished), Griesa ordered that five individuals working through numerous businesses and websites pay Cartier treble damages under the Lanham Act for contempt of an earlier, preliminary injunction which had instructed the defendants to cease dealing in counterfeit merchandise.

Cartier, the famous French watch company, has partnered with specialized investigators in a global brand enforcement effort to shut down alleged replica watch websites, as well as traditional brick-and-mortar establishments supplying these website owners. In October 2002, as part of this enforcement effort, Cartier filed a complaint in the US district court claiming that a number of individuals and companies were violating the Lanham Act by counterfeiting its trademark and selling replica watches over the Internet and in New York's Chinatown. The court granted a temporary restraining order and ordered the seizure of the defendants' assets. Based on the evidence gathered from this seizure, the court granted Cartier the preliminary injunction.

Not long after, Cartier received shipping documents indicating that, notwithstanding the court's restraining order, certain of the defendants continued to operate their counterfeiting business by importing blank watch parts and affixing Cartier's trademark. Cartier then went back to the court on a motion for contempt (the underlying action is still pending).

Upon presenting strong evidence that the defendants were operating an elaborate counterfeiting and money laundering scheme from New York to Hong Kong with many interrelated parties and numerous bank accounts, Griesa granted Cartier its contempt judgment, awarding treble damages amounting to $4.8 million - one of the largest contempt judgments ever issued in a case of this nature.

Harley I Lewin, G Roxanne Elings and Allison Lucas, Greenberg Traurig LLP, New York