Luxury fashion brand Chanel won a judgment late last month in a California lawsuit alleging that about 30 Amazon.com Inc. (NASDAQ: AMZN) sellers had peddled fake Chanel-branded products on Amazon’s marketplace.
Chanel had sought $2 million from each defendant for every fake item each seller peddled, but the court instead ordered a default judgment of $100,000 per item, or a total from all sellers of about $3 million.
Patent infringement cases like this are less about the size of the damages collected and more about a rights holder’s determination to protect a brand’s image and retain control over a brand’s distribution. In a similar vein, Nike Inc. (NYSE: NKE) said late last month that it would begin selling its gear directly on Amazon in an effort to thwart unauthorized resales by unlicensed distributors and sales of fake Nike shoes by Amazon third-party sellers.
According to a report at WWD, Amazon was required to disable the offending stores and take down images of any infringing product. Amazon Payments was also supposed to transfer funds held in the accounts of the sellers to Chanel. Details of the account holdings were not available, but the totals are unlikely to equal the amount of damages.
The distribution of counterfeit goods cost manufacturers and rights holders some $1.7 trillion in 2016, and fraud-watchers at The Counterfeit Report estimate that the total could rise to $2.8 trillion by 2022.