Tory Burch Awarded $146 Million In Internet Counterfeit Case

Online counterfeiters would do well to heed this cautionary tale: Yesterday, a judge in New York awarded Tory Burch $146 million in damages against a slew of website operators who sold fake Tory Burch Goods.

It’s a big victory for designers, not only because the sum is probably the highest amount ever awarded to a fashion company in an online counterfeiting case. In addition to the money (most of which Burch and company will likely never see) the court ordered that the websites selling the goods be shut down, and that their URLs be turned over the Tory Burch label. And in the future, the brand will be able to take down any sites that sell fake Tory Burch goods without having to go to court.

Women’s Wear Daily reports that precedent for this type of case was set last September, when Polo Ralph Lauren and The North Face filed suit against a ring of online counterfeiters. The two brands won $78 million and the right to shut down the sites, and cybersquatters who operated them, that sold fake goods.

In the Tory Burch suit, the fashion label named 41 cybersquatters, primarily of Chinese origin, which it discovered were linked to 232 domain names in total, including Web sites like “ToryBurchOutletShop.com,” “LouboutinTime.com” and “JimmyBoots.com.”

Polo and The North Face collected their money through third-party sites like PayPal, which facilitated the transactions between customers and the counterfeiters. Tory Burch was awarded the right to do the same thing, and while the company has recouped a few hundred thousand dollars of its damages, its executives realize they probably won’t get it all back.

Despite such a “staggering judgment,” Robert Isen, president of corporate development for Burch and its chief legal officer, said that the brand’s “motivation was really not financial,” although he admitted the company likely suffered “material” and “intangible losses.” Isen is also the designer’s brother.

“Counterfeiting is a blight on the industry,” he said, stressing the larger significance of the ruling. “This judgment will continue to make this an issue in the industry.”

And here’s hoping it’s an issue we can actually resolve.

[WWD]

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