FLORIDA TRADEMARK INFRINGEMENT LITIGATION: “LIKELIHOOD OF CONFUSION” MUST BE ESTABLISHED IN A COUNTERFEIT CLAIM WHERE MARKS ARE NOT “SUBSTANTIALLY INDISTINGUISHABLE”

Under the Lanham Act, a defendant may be liable for trademark infringement, if, without consent, he/she uses “in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark” which “is likely to cause confusion or to cause mistake, or to deceive.” 15 U.S.C. § 1114(1). The Act defines a “counterfeit” as a “spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” 15 U.S.C. § 1127. However, the test for whether marks are “substantially indistinguishable” is not well-defined by the applicable case law. Peter Mavrick is a Miami business litigation lawyer who represents clients in trademark infringement and other unfair competition litigation.

In Coach, Inc. v. Chung Mei Wholesale, Inc., 2016 WL 7470001 (S.D. Fla. June 17, 2016), Plaintiffs, Coach, Inc. and Coach Services, Inc.’s (collectively “Coach”), was a luxury consumer goods company that specialized in the design, manufacturing, and sale of, among other things, handbags and wallets. Coach owned a variety of trademarks, which it used in connection with the advertisement and sale of its products. Shen Biao Huang (“Huang”) and his wife, Lian Xiao Fu (“Fu”) operated a business called Chung Mei Wholesale, Inc. (“Chung Mei”) out of a warehouse in Hialeah, Florida. Chung Mei imported goods from China and sold them to retailers and wholesalers. Huang primarily selected merchandise himself, but sometimes his friend, Hung Jain Ke (“Jain Ke”) ordered goods on Huang’s behalf. During the course of their dealings, Huang instructed Jain Ke not to send him any goods that might be counterfeit.

There were two shipments ordered by Jain Ke on behalf of Chung Mei that were seized by the U.S. Customs and Border Protection (“CBP”) seized two shipments imported by Chung Mei from China, which CBP determined contained about 3,000 “Coach Design Handbags,” identified as constituting “counterfeit copies” of the Coach Trademarks. A Coach employee trained to identify counterfeits, examined CBP’s photographs of these bags and concluded the pictured items were counterfeit and bore counterfeit representations of four registered Coach trademarks as well as trade dresses, and were substantially indistinguishable from the Coach trademarks and trade dresses.

Coach filed a lawsuit against Chung Mei, Fu, and Huang (collectively, “Defendants”) for, among other causes of action, trademark counterfeiting. Coach filed a Motion for Summary Judgment as to Defendants’ liability for all of its claims. “[T]he plain language of Rule 56 [of the Federal Rules of Civil Procedure] mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Jones v. UPS Ground Freight, 683 F.3d 1283, 1292 (11th Cir. 2012).

Defendants argued that Coach did not carry their burden on summary judgment because they failed to conclusively establish the seized handbags constituted counterfeit products. Coach’s Motion for Summary Judgment relied solely on the affidavits of its employees, Eric and Melissa Berger. The Bergers’ testimony consisted of their opinions of whether the handbags were counterfeit products. Defendants also argued that Coach failed to establish that the seized products were likely to cause consumer confusion.

Coach argued that it did not need to demonstrate Defendants’ products were likely to cause consumer confusion because the products’ counterfeit nature creates a presumption of confusion. Coach relied on the case of Fila U.S.A. Inc. v. Kim, 884 F. Supp. 491 (S.D. Fla. 1995), which held “[w]here a counterfeit item is virtually identical to the genuine item, the very purpose of the individuals marketing the cheaper [counterfeit] items is to confuse the buying public into believing that it is buying the true article.” The trial court disagreed.

The trial court found that there was a genuine issue of material fact whether the seized products and the genuine products can be considered “identical” or “substantially indistinguishable” for the seized products to qualify as counterfeits under the Lanham Act. The trial court further held that summary judgment was unwarranted on Coach’s trademark infringement claim, as it was unclear: (1) whether Defendants’ products qualified as counterfeit under the Lanham Act; and (2) if not, whether they were likely to cause consumer confusion. The trial court, therefore, denied Coach’s Motion for Summary Judgment.

Peter Mavrick is a Miami business litigation attorney. This article does not serve as a substitute for legal advice tailored to a particular situation.