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Proof of Websites Selling Knockoffs Entitles Tory Burch to Ex Parte ACPA Relief

Thursday, April 4, 2013
By David McAuley

Substantiated allegations that a group of unidentified Chinese individuals used domain names that were nearly identical to <> to peddle low-quality products bearing counterfeited Tory Burch LLC trademarks were enough to award the fashion retailer an ex parte order transferring the domain names under the Anticybersquatting Consumer Protection Act, the U.S. District Court for the Northern District of Illinois ruled March 27 (Tory Burch LLC v. The Partnerships and Unincorporated Associations Identified on Schedule A, N.D. Ill., No. 1:13-cv-02059, 3/27/13).

Nearly every ACPA factor that was relevant in this case supported a finding that the defendants acted in bad faith, Judge Virginia M. Kendall said.

The court awarded additional ex parte relief, including a temporary restraining order and a freeze of the defendants' assets on Tory Burch's additional claims relating to federal trademark infringement and violations of Illinois deceptive practices law.

ACPA Factors
The ACPA, 15 U.S.C. §1125(d), makes a person liable to the owner of a protected mark for registering a domain name that is identical or confusingly similar to a distinctive or famous mark with a bad faith intent to profit.

Here, the court said, Tory Burch demonstrated a likelihood of success on its ACPA claim sufficient to support the ex parte transfer order.

The court said that the domain names that the defendants used, which were filed under seal, were either nearly identical or confusingly similar to Tory Burch's, in fact many of them incorporated “Tory Burch” in its entirety.

Evidence of the defendants' bad faith was extensive, the court noted. To help courts evaluate the existence of bad faith on the part of the defendant, the ACPA sets out a non-exclusive list of nine factors. The court said that basically all of them pointed toward bad faith in this case.

For instance, it said, the defendants did not have any trademark or other intellectual property rights in domain names that were similar to Tory Burch's. In addition, there was no indication that the challenged domain names resembled the defendants' names, and it did not appear that the defendants used the names previously in connection with a legitimate endeavor.

Essentially, the court said, the numerous similarities between the products, marks, and websites made it clear that the defendants intended to divert consumers from Tory Burch's website to its sites for financial gain.

Lanham Act Claims
The court found that Tory Burch was similarly likely to prevail on its Lanham Act claims for trademark infringement and counterfeiting (15 U.S.C. § 1114(1)), and using a false designation of origin (15 U.S.C. § 1125(a)).

In order to prevail, Tory Burch had to show that it had a mark protected under the act, and that the challenged marks were likely to sow confusion among consumers.

The company provided extensive evidence of the counterfeit products that were basically identical to Tory Burch's products being sold by the defendants, the court said. Adding to the confusion was the fact that the defendants' prices were not pegged at low “too good to be true” prices that might alert consumers as to their bogus nature, it noted.

The defendants' prices were only slightly below Tory Burch's prices, in all likelihood leading consumers to think the products were genuine, the court pointed out.

It granted Tory Burch's motions for a temporary restraining order, domain name transfer order, asset restraining order, expedited discovery order, and service of process by email and electronic publication order.

Kevin W. Guynn, Amy Crout Ziegler, and Justin R. Gaudio, of Greer, Burns & Crain Ltd, Chicago, represented Tory Burch.

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