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A man who claims to be a cousin of the late fashion designer Gianni Versace has been held in contempt a second time for marketing products under the Versace name. Alfredo Versace violated a preliminary injunction by selling watches, jeans and handbags that infringe on the Versace trademark, Southern District of New York Judge Peter K. Leisure has ruled. The judge ordered Alfredo Versace to pay what is certain to be tens of thousands of dollars in sanctions, and warned that repeated violations of the injunction could land him in jail for contempt in A.V. By Versace, Inc. v. Gianni Versace, S.p.A. 96 Civ. 9721. “Alfredo Versace has shown no interest in establishing an enterprise in which his own skill can be made known to the public, and his use of his surname has been less than ‘honest and straightforward,’” Leisure said. “Rather, the record reflects a deliberate pattern of deception by which Alfredo Versace has repeatedly used his surname in ways designed to create the impression that his goods are associated with those of Gianni Versace, in violation of judicial orders to the contrary.” Alfredo Versace, an Italian citizen and U.S. resident, was ordered in February 1998 to refrain from using “infringing marks” that the court found were confusingly similar to marks used by Gianni Versace. He was allowed to continue using the phrase “Designed by Alfredo Versace,” as long as it was accompanied by a disclaimer distancing the product from Gianni Versace S.p.A. But in March 2000, Judge Leisure found Alfredo Versace in contempt of court because he was using offshore Internet sites to advertise and distribute products in the United States. Versace was directed to pay $31,031 in sanctions. But when Gianni Versace S.p.A. alleged that watches, jeans and handbags were being sold in continued violation of the preliminary injunction, and products were being distributed without the disclaimer, the court was asked to level another set of sanctions. One of the alleged violations was discovered when an attorney for Gianni Versace S.p.A. purchased a “Designed by Alfredo Versace” watch over the Internet. A continued search revealed more than a dozen Web sites selling items using the infringing mark. Another violation was reportedly uncovered when a private investigator working for Gianni Versace S.p.A. purchased “Alfredo Versace” suits from clothing distributor L’Abbligiamento, a company that allegedly marketed the suits next to regular “Versace” apparel. Alfredo Versace argued the preliminary injunction did not clearly apply to business conducted outside the United States. He also contended he had no way of controlling the unauthorized marketing of the items by unaffiliated Web sites. FOUND IN CONTEMPT Rejecting one motion by the plaintiffs, Judge Leisure said there was “insufficient evidence” to cite Alfredo Versace for contempt for claiming he was the cousin of Gianni Versace. But the judge did find him in contempt for selling the items, for allowing the Web sites to continue marketing the items, and, finally, for his deal with L’Abbligiamento. As for the Web sites, Leisure rejected Alfredo Versace’s “factual impossibility” defense, finding he had offered “no credible evidence that the Web sites are beyond his control.” The judge also turned aside Alfredo Versace’s argument that the use of a private investigator violated his privacy, saying, “Courts in the Southern District of New York have frequently admitted evidence, including secretly recorded conversations, gathered by investigators posing as consumers in trademark disputes.” The judge then ordered as a “severe sanction” an as yet undetermined amount “encompassing both compensatory damages and further monetary penalties” for not complying with the preliminary injunction. Versace has 60 days to produce financial documents showing profits from the infringing sales. He will also pay all attorney fees and costs associated with the sanctions motion, and a $2,000 daily fine for every day he does not comply with the order. And the judge warned the court would consider a jail term “if his transgressions continue.” The judge also granted a motion to modify the injunction to block Alfredo Versace from using the name “Versace” at all. Leisure noted that courts are reluctant to bar a defendant from using his own name in a commercial context. Nonetheless, he said, “an absolute ban on the use of a surname is appropriate where the enjoined party’s only interest in the use of the surname is to free ride on the reputation of a better known party.” Theodore C. Max and Charles A. LeGrand of Mintz Levin Cohn Ferris Glovsky and Popeo, and David E. Jacoby of Phillips, Nizer, Benjamin, Krim & Ballon, represented Gianni Versace S.p.A. Bryan J. Holzberg of Melville represented Alfredo Versace.

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