Speaker 1: You're listening to Bloomberg Law. I'm June Grasso in New
Speaker 1: York with Greg's store in Washington, d C. It's a
Speaker 1: top French luxury brand known for craftsmanship, design, limited supply
Speaker 1: and long waiting lists, and it protects that brand. June
Speaker 1: ms the dawn of a new fragrance. That's why the
Speaker 1: luxury giant Ramez is suing a small chain of Melbourne
Speaker 1: boutiques for selling what it claims our knockoff bracelets. The
Speaker 1: bracelet in question is a leather bracelet with the distinctive
Speaker 1: ermez h clasp Ermez claims that it made three attempts
Speaker 1: to contact the owner of the boutiques called E M Style,
Speaker 1: to order her to stop selling the bracelets, but got
Speaker 1: no response. Our guests are Terence Ross, a partner at
Speaker 1: Captain Yuchen Rosenman, and Susan Scoffiti, director of the Fashion
Speaker 1: Law Institute at Fordham University School of Law. They're joining
Speaker 1: us now in the Spectrum Enterprise Phone Line Spectrum Enterprise
Speaker 1: Nationwide Fiber based Network and I T Infrastructure Solutions Terry.
Speaker 1: You can go online and look up replica ORMs bracelets
Speaker 1: and get them for thirty five dollars or so. So
Speaker 1: why is Ermez pursuing this against this small chain of
Speaker 1: Australian boutiques. Well, in this case, June, the boutiques seem
Speaker 1: to be particularly aggressive in pushing this out as counterfeit
Speaker 1: RMS product and resistant repeated requests to cease and desist
Speaker 1: from Hermez um and at some point enough becomes enough. Um.
Speaker 1: These fashion retailers, who depend so much upon the value
Speaker 1: of their trademark simply cannot ignore this sort of blatant counterfeiting. Susan.
Speaker 1: What's the legal standard that Hermes would have to meet
Speaker 1: if this case we're to go forward and in court,
Speaker 1: is it that the consumer has to be confused about
Speaker 1: the origin of the products or something else? Well, it
Speaker 1: is the case as as alleges that these copies are
Speaker 1: in fact substantially identical, then we're not even so concerned
Speaker 1: about consumer confusion, right, But if they were merely showed
Speaker 1: a resemblance of some sort then we might ask that question.
Speaker 1: But overall, you're right, the general trademark standard is one
Speaker 1: of likelihood of consumer confusion um, And the Australian Trademark
Speaker 1: Office of course would have taken this into account in
Speaker 1: considering this trademark, Terry, do the boutiques have any defense here?
Speaker 1: Can they say this really isn't the same, the h
Speaker 1: looks a little bit different, or the leather is different.
Speaker 1: It's hard to see a viable defense that the boutiques
Speaker 1: might have. UH. I note in particular that UM, the
Speaker 1: investigators who went in on behalf firm as UM to
Speaker 1: follow up on the complainants they had received. UM spoke
Speaker 1: Tom on an undercover basis, spoke to one of the
Speaker 1: retail clerks who was very proud and expressed that these
Speaker 1: were counterfeits. UM. And I think in that sort of circumstance,
Speaker 1: it's very hard UM to claim that you were within
Speaker 1: some sort of legal right. Um, that consumers weren't really confused.
Speaker 1: They were purposely counterfeiting these herms products, and counterfeiting as
Speaker 1: in Australia is against the law just as it is
Speaker 1: here in the United States, without regard to consumer confusion. So, Terry,
Speaker 1: even though they say this is a copy, this isn't
Speaker 1: the real thing, it's still considered a counterfeit when the
Speaker 1: person knows they're not buying in their miss bracelet. In
Speaker 1: traditional trademark law, there was a requirement of consumer confusion. UM.
Speaker 1: Most Western nations, including the United States, have enacted anti
Speaker 1: counterfeiting laws that set aside that requirement and simply say,
Speaker 1: if you are free riding off of the um name
Speaker 1: brand of another famous mark. Her As is clearly a
Speaker 1: famous mark under any definition, then you have committed an
Speaker 1: independent civil wrong which can be stopped by the court. Susan,
Speaker 1: why should that be? Why? I mean, you have a
Speaker 1: willing buyer, willing seller, Uh, you know, buying a product.
Speaker 1: I you know, I'm buying something. I know it's not
Speaker 1: you know of the quality of of her Mes or
Speaker 1: or some other name brand. Uh you know, why shouldn't
Speaker 1: we let this kind of say? I'll go through. I
Speaker 1: think the greatest concern here for m AS here is
Speaker 1: a dilution of their brand, because the more replicas are
Speaker 1: out there, especially if they are indeed substantially identical to
Speaker 1: the originals, at least in an appearance perhaps from a distance,
Speaker 1: or if you don't actually touch the leather, which is
Speaker 1: probably fleather in this case. But the concern is that
Speaker 1: if there are enough replicas out there at the consumer
Speaker 1: who would have bought em AS will simply pass it
Speaker 1: up and not bother to buy the real thing, so
Speaker 1: there's that kind of market revolution. There's even a possibility
Speaker 1: of market substitution why by the MS when you can
Speaker 1: get the replicas so much cheaper, So those two things
Speaker 1: are really primary in the mind of MS. I think
Speaker 1: the other thing to remember is um you describe the
Speaker 1: chain as a small chain, and the Australian Crust described
Speaker 1: it as a tiny chain. But there are only four
Speaker 1: MS boutiques in all of Australia, So in that sense
Speaker 1: it may be that staring consumers would have more access
Speaker 1: to these particular boutiques than they would do the real thing,
Speaker 1: So there's that kind of concern about perception of the
Speaker 1: brand overall. Terry d According to the to the MS attorneys,
Speaker 1: there was no response from the boutique owner and the
Speaker 1: case will be heard on March tenth unless it's resolved
Speaker 1: earlier by the parties. Is it likely that the owner
Speaker 1: is just going to keep dragging her feet until the
Speaker 1: case until the case time comes or is a settlement likely?
Speaker 1: What we typically see in these counterfeit goods cases is
Speaker 1: attempt by the defendant the counterfeiter to drag the matter out,
Speaker 1: drag the matter out try to UM obtain the best
Speaker 1: possible settlement from the trademark owner from the brand UH
Speaker 1: and in the hopes that the cost of the enforcement
Speaker 1: of the trademark is so high that the brand owner
Speaker 1: is willing UH to settle for relatively inexpensive payment UM
Speaker 1: as well as secession of selling the goods. The most
Speaker 1: frequent thing you see is that the counterfeiter wants the
Speaker 1: right to sell off its stock of counterfeit goods before
Speaker 1: it stops UM engaging in the counterfeit practices, which has
Speaker 1: always amazed to me. And yet if they drag things
Speaker 1: on long enough, they often get the brand to agree
Speaker 1: to something like that, Susan. According to news reports UH
Speaker 1: at the store, there are other UH what appear to
Speaker 1: me knock off the whole whole number of other brands.
Speaker 1: Is Hermes being especially aggressive impressing this suit, whereas the
Speaker 1: other companies apparently haven't filed suit again against this boutique. Yet,
Speaker 1: I think every brand really has to pick and choose
Speaker 1: their battles. It's not possible to simply ignore counterfeiting where
Speaker 1: it occurs, lest your trademark actually become generic and you
Speaker 1: lose it. So every brand out there that wants to
Speaker 1: keep its trademarks, has to do a certain amount of
Speaker 1: anti counterfeiting enforcement. But that doesn't mean that every brand
Speaker 1: will pick the same chain or the same vendor every time.
Speaker 1: It's just a matter of doing enough enforcements to make
Speaker 1: to a g to attack those particular vendors that are
Speaker 1: that you feel are actually harming your market or of
Speaker 1: which you might make an example. Um, and at the
Speaker 1: same time to maintain the integrity of your brand. Jerry,
Speaker 1: just a little time left. But has there been a
Speaker 1: lot more enforcement actions on for trademarks and for retail
Speaker 1: goods since the Internet has burgeoned as far as shopping
Speaker 1: is concerned. Oh my yes, June. Um. You look at
Speaker 1: Gucci in particular, which has filed several lawsuits over the
Speaker 1: last couple of years, suing hundreds of Internet sites in
Speaker 1: a single lawsuit to get them to stop selling what
Speaker 1: purports to be Gucci products. So yes, the Internet has
Speaker 1: seen an uptick and the enforcement level by luxury brand retailers.
Speaker 1: Thank you both so much. It's always a pleasure to
Speaker 1: have you both on Bloomberg Law. That's Terence Ross, a
Speaker 1: partner at Captain Uten Rosenman, and Susan scoffiti, the director
Speaker 1: of the Fashion Law Institute at Fordham University School of Law,
Speaker 1: which is the first fashion law institute in the country.