Kenneth R. Hartmann (J. Albert Diaz)
Miami attorney Ken Hartmann remembers walking down Broadway in New York City in the 1980s when a car came screaming up on to the sidewalk.
“The driver gets out and opens up the trunk, takes out a blanket and starts throwing a couple dozen Lacoste cashmere sweaters down for $10 bucks a piece,” said the partner at Kozyak,Tropin & Throckmorton.
“You know its either counterfeit or stolen, but the problem for the trademark owners is that the people who paid $10 bucks for that sweater just don’t care. They are happy to get a fake Lacoste sweater for $10 bucks.”
In the three decades since, counterfeit goods have proliferated thanks to the Internet. Just like a good portion of prostitution has moved from the street to online, so has purveyors of counterfeit goods.
Canal Street in New York City’s Chinatown, renowned for its counterfeit goods, is feeling the heat as lawmakers considered a law last year fining the buyers of bogus merchandise. Hartmann said many of the retailers have moved the fake goods to back rooms where customers gain entry if they know the password.
Attorneys like Hartmann, who represented Levi Strauss & Co. and other companies in federal trademark infringement lawsuits, say big name manufacturers have had to rethink their strategy in combating fakes.
The court docket shows they are becoming more bullish. In 2003, there were 120 federal trademark lawsuits filed in the Southern District of Florida. Last year, there were 220, an increase of 83 percent.
There’s been about 40 trademark infringement actions filed so far this year in the district.
On the docket, there are the usual suspects like Coach Inc. and Louis Vuitton Malletier S.A., which make status producing purses and are top targets of counterfeiters. But there were more unusual actions, as well, last year that spoke to numerous companies aren’t shying away from protecting their brand.
Rovio Entertainment Ltd, the Finnish company that sells the Angry Birds video games and its numerous lucrative accessories, filed a successful action against a Key Biscayne company that dubbed itself Angry Club and adorned its logo in red and black.
And last month, Sober College Environments LLC, which trains addiction counselors, sued Palm Partners LLC, a substance abuse center in Delray Beach, saying it infringe on its “Sober College” trademark.
The defendants in these trademark cases are sometimes John Does because the company doesn’t know initially who is producing the counterfeit products with their trademark. Other defendants are just website names, such as attifanny.com, which was sued by jewelry titan Tiffany & Co. last year. They seek temporary and the permanent injunctions to stop the use of their trademark.
These websites are often visited by consumers who know they are getting knockoffs.
Consumer Reports raised the red flag last year with a story that counterfeit goods are increasingly fooling some consumers.
There is also growing concern that counterfeit goods are becoming more dangerous, especially in the area of pharmaceuticals. Viagra, the popular erectile dysfunction pill manufactured by Pfizer Inc., is the world’s most counterfeited drug.
Attorney Laura Ganoza, a partner at Foley & Lardner in Miami, said many imposters on the web try to pirate legitimate customers with websites incorporating the name of the product, like in the cases brought by Tiffany.
“These are really well-made websites and people just believe they are buying something legitimate,” Ganoza said. “But you are not going to get Christian Louboutin shoes for $30.”
But the rub comes for legitimate companies when those shoes arrive and then fall apart within a month.
“The promise of the brand is not fulfilled for them, that’s where you lose reputation, you dilute the brand,” she said.
China, not surprisingly, is the source of many knockoffs and tracing such items from a website to their source is difficult, she said. The website Alibaba.com, which is like an Amazon.com for Asia, is particularly troublesome for trademark infringement even as eBay and its ilk try to crack down on counterfeits, Ganoza said.
“It’s kind of a difficult thing to get down to the core and root of the problem,” Ganoza said. “They can always get a new domain name and they can always get new postings, but if they can’t get the products manufactured, that’s where you can really have an impact.”
Manufacturers and their lawyers are also targeting the ports. U.S. Customs and Border Protection in Miami did not return phone calls to talk about their interdiction efforts on counterfeit goods.
But attorney Catherine Hoffman, a partner at Mayback & Hoffman in Fort Lauderdale, said she has worked with Customs officials to protect her client, the German trade association of the Solingen certification mark. Solingen, Germany, dubbed the city of blades, is known for its fine cutlery.
Hoffman said she has filed lawsuits to protect that trademark. One against the Home Shopping Network went after knives marketed by celebrity chef Emeril Lagasse. The knives had the Soligen certification on one side and “Made in China” on the other.
But Hoffman said her secret weapon is utilizing Customs.
“You can register your trademark with Customs and Border Protection for a few hundred dollars,” she said. “It’s basically kept on a list and if Customs comes across something, you are tipped off.”
Hoffman said she tries to educate Custom officials on her client’s product and mark.
In 2012, the latest figures available, Customs seized $1.3 billion worth of counterfeit goods. In March 2013, Custom officials intercepted 505 shipments of counterfeit merchandise at Miami International Airport with the suggested retail price of nearly $87 million.
Sometimes local law enforcement takes the lead. In November, the Broward Sheriff’s Office arrested a Tamarac woman who was getting ready for Black Friday by hoarding $275,000 work of Chanel, Gucci and other luxury brand purses.
Hartmann, the Koyzak, Tropin & Throckmorton attorney, also had high praise for the work Customs is doing to root out counterfeiting among the thousands of containers that arrive at the Port of Miami and Port Everglades in Fort Lauderdale.
He said when Customs are told to be on the look out for a trademark, “They will take it seriously, and they will keep their eyes open.”
Another tactic in the counterfeit goods war is going after third parties.
This was epitomized when Coach recently sued the Swap Shop, the massive flea market in Fort Lauderdale. The lawsuit targeted Swap Shop owner Preston Henn, alleging he willfully turned a blind eye to vendors illegally selling counterfeit Coach products on their property.
After two days of testimony at trial, the two sides settled for $5.5 million in December.
Now Louis Vuitton has filed as similar suit in January, but Henn’s attorney, Bruce Rogow of Fort Lauderdale, said since the Coach litigation his client has employed security personnel to root out counterfeit goods being sold at the Swap Shop.
“There is a limit what a third party can do and that’s is the key to these cases,” Rogow said. “The Swap Shop has undertaken very vigorous and thorough steps to try to prevent sales of counterfeit merchandise.”