Counterfeiting is a very risky business. At least that was the case for one of the counterfeiters of Fendi products. Fendi, an Italian luxury fashion house, sued Ashley Reed Trading Inc. (“Ashley Reed”), distributor of the counterfeited Fendi goods, and its directors, for trademark counterfeiting and related offenses. Fendi Adele, S.R.L. v. Ashley Reed Trading, Inc., 507 Fed.Appx. 26 (2d Cir. 2013). Fendi alleged that over the period of six years Ashley Reed was selling counterfeited Fendi bags and other products.
The District Court, on summary judgment, awarded Fendi more than $12 million. Fendi Adele S.R.L. v. Ashley Reed Trading, Inc., No. 06 Civ. 0243(RMB) (MHD), 2011 WL 3176795, 1 (S.D.N.Y. June 30, 2011). Ashley Reed appealed the Court’s decision and Fendi cross-appealed seeking additional damages. The Second Circuit not only denied Ashley Reed’s appeal but also vacated the District Court’s damages award and remanded the case for further determination of whether additional damages are warranted.
The District Court increased its award to almost $30 million in damages (Corrected Order (S.D.N.Y. Apr. 22, 2013)), thus possibly deterring any potential counterfeiter from not only litigating with Fendi but also selling counterfeited Fendi goods in the first place.