Watchmaker The Swatch Group Ltd. has secured a $1.1 million verdict in Manhattan federal court against a SoHo landlord found liable for counterfeits sold on its premises, in litigation that saw an attorney nearly sanctioned over allegations he misled the district court.

Swatch went on to dismiss the firm, Collen IP Intellectual Property Law, which let go of the attorney in the wake of the judge’s decision not to impose sanctions. Swatch’s new counsel at Wilmer Cutler Pickering Hale & Dorr ultimately succeeded at trial on behalf of the client, securing a substantial money award in the battle over fake luxury products sold in Lower Manhattan.

WilmerHale partner Robert Gunther Jr. led the firm’s handling of the case. He declined to comment.

Swatch sued the owners of the property at 375 Canal Street in Manhattan. The company alleged counterfeits of its Omega watch brand were being sold out of the premises, and that the landlord was responsible for knowing what was being sold out of the storefront.

Legal tensions surfaced during the summary judgment phase of the case. Just ahead of the start of trial in 2017, Troutman Sanders partner Avi Schick, who was then serving as defense counsel with Dentons, alerted U.S. District Judge Paul Crotty of the Southern District of New York to concerns over statements made to the court by investigators for the plaintiffs.

Schick presented statements by the investigator that conflicted with those in a sworn affidavit filed with the court by the plaintiff’s attorney. While he argued the misstatements were innocent, the plaintiff’s attorney acknowledged that, rather than alert the court to the issues, he remained silent after discovering them.

After the New York Law Journal reported Crotty was considering sanctions against the attorney, Swatch made a change in its representation.

The attorney’s legal representatives at the time cast his departure from Collen as a business decision unrelated to the then-pending sanctions motions, but according to his own statement the termination came in the immediate wake of Swatch’s decision to change representation.

“…Plaintiffs informed Collen IP that they had decided to change law firms for this case. Collen IP terminated my employment within an hour,” the attorney wrote.

He denied intentionally misleading the court.

Crotty decided against imposing a sanction on the attorney. The case got back on track in April 2018. After settlement negotiations proved unsuccessful later that year, the trial began in late February and continued into March. On March 4, the jury unanimously found the landlord defendants liable for trademark infringement, providing Swatch with $275,000 in damages for four watches sold at the location.

Crotty entered a final verdict in the case March 12 in the amount of $1.1 million, plus costs and fees.

Schick did not respond to a request for comment.


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