Chanel Sues Over Counterfeit Jewelry That Infringe On Its Trademarks and Trade Dress In Riverside, California

Los Angeles, CA – On February 20, 2008, Chanel, Inc., the luxury goods company, filed a complaint for counterfeiting, trademark infringement, and Lanham Act 43(a) unfair competition against numerous individuals in the California Central District Court – Eastern Division, in Riverside. Chanel asserts that it is the owner of the USPTO registered trademarks CHANEL and the CC MONOGRAM for use on necklaces and costume jewelry, including earrings, rings, bracelets, and pendants in International Classes 14 and 28. Chanel asserts that its trademarks are “symbols of Plaintiff’s quality, reputation, and goodwill” and customers “readily identify merchandise bearing the Chanel Marks as being high quality merchandise sponsored and approved by Chanel.”

Chanel alleges that Defendants are “promoting, and or otherwise advertising, distributing, selling, and/or offering for sale counterfeit products, including at least necklaces and costume jewelry bearing trademarks which are exact copies of Chanel Marks” and are counterfeit, lower quality goods that also incorporate Chanel’s trade dress. The complaint further alleges that the “net effect of Defendants’ actions is to confuse consumers who will believe Defendants’ Counterfeit Goods are genuine goods originating from and approved by Chanel.” In addition to preliminary and permanent injunctive relief, Chanel seeks three times its actual damages under 15 U.S.C. § 1117, or, at its election, seeks statutory damages of $1,000,000.00 (one million dollars) from each defendant under 15 U.S.C. § 1117(c)(2) of the Lanham Act. The case is styled as Chanel, Inc. v. Kin Fung Poon et al., EDCV08-0224 VAP (CD CA 2008).

PRACTICE NOTE: The Ninth Circuit Court of Appeals recently held that if a trademark owner seeks counterfeiting statutory damages under 15 U.S.C. 1117(c) – instead of actual damages, then it is not entitled to attorneys’ fees under section 1117(b). K and N Engineering, Inc. v. Bulat, 510 F.3d 1079, 1081 (9th Cir. 2007). The Ninth Circuit vacated the trial court’s award of $100,000 to K and N, but let stand the $20,000 in statutory damages. In counterfeiting cases where the actual damages are low, Plaintiffs must weigh the option of receiving lower actual damages and their attorneys’ fees, against the award of higher statutory damages and no attorneys’ fees.

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