Is it LOVE? – Cartier and Amazon File Suit Alleging Fake Cartier LOVE Jewelry
Iconic fashion brand, Cartier, is debatably most famous for its LOVE Bracelet. Cartier has translated this design to rings, necklaces and earrings that sell for thousands of dollars. Recently, according to Cartier and Amazon, fake versions of this fine jewelry were illegally marketed and sold through a sophisticated web scam.
Amazon and Cartier claim that various social media accounts (the “Alleged Infringers”) depicted Cartier’s jewelry in 64 Instagram posts. These posts included a description of Cartier’s jewelry and a link to purchase the jewelry on the Amazon Store. When viewers clicked on the link to purchase the merchandise, however, it allegedly directed them to unbranded goods on Amazon. Amazon believes that, despite its strong counterfeit detection software, the Alleged Infringers circumvented these protections by uploading ambiguous and unbranded photographs of Cartier’s jewelry. Moreover, Amazon alleges that after buyers purchased the products they believed to be Cartier’s, the Alleged Infringers sent purchasers counterfeit LOVE jewelry.
Cartier and Amazon filed trademark infringement claims and false designation claims against the Alleged Infringers. Specifically, each asserts that the Alleged Infringers advertised, marketed, and sold “identical or substantially indistinguishable” jewelry bearing Cartier’s marks without permission. Further, such actions are likely to deceive and confuse Cartier and Amazon’s customers into purchasing counterfeit goods. Cartier and Amazon together claim that the Alleged Infringers made false designations of origin, which negatively impacts Cartier and Amazon’s business reputations and customer relations.
How Compelling Is Cartier’s Trademark Infringement Claim?
Cartier seeks damages for trademark infringement, which is the unlawful use of another party’s legally protected trademark. To win at trial, Cartier is required to prove that (1) it owns a valid and protectable trademark and (2) that the Alleged Infringers’ use of the mark is likely to cause confusion among consumers.
Cartier has a strong trademark claim. As an initial matter, Cartier definitely has a valid and protectable trademark. The mark was registered with the United States Patent and Trademark Office and has continuously and extensively been used in commerce.
The second element, likelihood of confusion, is more complex. To determine whether confusion is likely, the Court will analyze an eight-factor test, called the “Polaroid factors”. The Polaroid factors include the following:
- the strength of the owner’s mark;
- the similarity between the mark and the alleged infringer’s mark;
- the proximity of the products and competition with one another;
- the trademark owner’s likelihood of entering the alleged infringer’s related market, known as “bridging the gap;”
- evidence of actual confusion by relevant consumers;
- the alleged infringer used the mark in bad faith;
- the quality of the products or services of both parties; and
- the sophistication of the consumers in the relevant markets.
The court typically reviews these factors through a balancing test to evaluate whether there is a likelihood of confusion. Some factors, such as evidence of actual confusion by relevant consumers, may be given more weight than others depending on the situation.
- The strength of the trademark: Cartier likely has a fanciful trademark, the strongest of possible trademark names, meaning that the mark has neither a literal meaning nor relation to the product being sold (jewelry).
- The similarity between the mark and the alleged infringer’s mark: The Alleged Infringer’s mark purportedly closely resembles Cartier’s mark, as the products advertised were “identical or substantially indistinguishable” from the genuine Cartier pieces.
- The proximity of the products and competition with one another: Cartier and the Alleged Infringer’s mark are similar in use and function, as they are both used on jewelry, but this factor may be more complex if the Alleged Infringers’ jewelry is significantly less expensive.
- The trademark owner’s likelihood of entering the alleged infringer’s related market: Cartier’s likelihood of entering the Alleged Infringer’s related market is high because Cartier is already present on both Amazon and in the social media market space, with around 12.1 million followers on Instagram.
- Evidence of actual confusion by relevant consumers: Cartier may be able to find evidence of real confusion through consumer testimonies and surveys indicating that relevant consumers believed that Cartier authorized the sale of the Alleged Infringer’s products.
- The alleged infringer’s intent: Cartier can likely prove that the Alleged Infringers used Cartier’s mark to deceive consumers, which would strengthen its plea for actual and enhanced damages.
- The quality of the products: Cartier will likely succeed in arguing that the Alleged Infringer’s products are of a lower quality, thus devaluing Cartier’s high-end reputation.
- The relevant consumers’ sophistication: Cartier may not have the strongest argument here because Cartier’s typical customers may be more sophisticated and careful than the average consumer and may have performed research, deliberation and inspection deterring them from buying the allegedly fake products.
Overall, the Polaroid Factors seem to weigh in Cartier’s favor as a reasonable consumer would likely be confused by the Alleged Infringers’ jewelry. But this may not be a home run for Cartier because its consumers are very sophisticated, therefore, hard to fool. Also, the Alleged Infringers’ jewelry is substantially less valuable, meaning a separate market for those goods may exist.
Nonetheless, in cases that involve counterfeiting, like here, courts may bypass the Polaroid Test (Cartier Int’l B.V. v. Ben-Menachem, No. 06 CIV. 3917, 2008 WL 64005 (S.D.N.Y. Jan. 3, 2008)). Rather than using the Polaroid Test, these courts would evaluate if the infringer used the Plaintiff’s mark to sell counterfeit goods.
In Cartier’s case, the unauthorized jewelry will likely be considered counterfeit if the Alleged Infringers did intend to advertise and sell identical and substantially indistinguishable jewelry bearing Cartier’s mark. Along with a less strenuous legal battle, the counterfeiting accusations could result in harsher punishments for the Alleged Infringers, as penalties for counterfeiting are more severe than infringement due to public policy concerns.
Evaluating the Strength of Cartier and Amazon’s False Designation of Origin Claims
Cartier and Amazon’s next claim is False Designation of Origin. False designation of origin occurs when a defendant lies about the origin, maker, or brand name of the product, inferring that the product originated from the plaintiff.
Cartier and Amazon claimed that the Alleged Infringers misled and confused consumers as to the origin and authenticity of the products sold in connection with Cartier’s trademark. Cartier believes that this false designation of origin permanently harms its business reputation and goodwill, in violation of federal law. Cartier asserts that it is entitled to an injunction against the Alleged Infringers due to this alleged “irreparable damage.” Cartier also requests that Alleged Infringers return their profits, on top of, attorney’s fees and additional costs and possibly treble (triple) damages. Amazon also points to its reputational harm, highlighting that the Alleged Infringers’ customer deception harmed its efforts to create an anti-counterfeit market. Amazon believes a money award alone will not fully compensate it, but rather it is entitled to an injunction against the Alleged Infringers, in addition to attorneys’ fees and the costs of bringing the lawsuit.
Under the Lanham Act, a plaintiff can succeed on a false designation of origin claim if the plaintiff can show:
- Goods or services are involved;
- Interstate commerce is affected; and
- There is a false designation of origin with respect to those goods or services in commerce[2].
Cartier and Amazon will likely succeed on the first and second elements of this claim because Cartier’s marks are entitled to protection and counterfeit goods are inherently likely to confuse consumers as to the origin of the Alleged Infringers’ products.
- Starting with the first prong, Cartier and Amazon can likely argue that there are goods involved, as the alleged counterfeit goods are jewelry.
- Cartier and Amazon will persuasively argue that the second prong is in their favor because interstate commerce is affected. The Alleged Infringers allegedly used social media to advertise and sell their products on Amazon, a national website.
The third prong, false designation of origin, looks at whether (1) the plaintiff has a valid mark entitled to protection under the Lanham Act and (2) the defendant used a similar mark in commerce in a way that would likely cause confusion among relevant consumers. Cartier and Amazon can likely prove that the Alleged Infringers sold products with a false designation which infers that Cartier produced and sold the products because:
- The plaintiff has a valid mark entitled to production, as it is registered with the United States trademark office; and
- Applying the Polaroid factors above, there is likely a reasonable likelihood for confusion because of the allegedly counterfeit products. Like the trademark infringement analysis, however, courts may choose to bypass the Polaroid test because counterfeit goods are inherently confusing. The court would then only need to determine that the items are in fact counterfeits and that the Alleged Infringers distributed, offered or sold the products.
Do the Alleged Infringers Have Valid Defenses?
While Cartier and Amazon’s claims appear to be viable, there are several defenses to trademark infringement and false designation of origin. In addition, the Lanham Act offers several defenses.
The Alleged Infringers could assert a number of defenses, such as:
- challenging the validity of the trademark;
- declaring that the mark was used with the plaintiff’s permission; or
- claiming that the mark is descriptive of the product or service and therefore not protected under the Lanham Act.
However, these defenses would likely fail:
- Cartier’s trademark is valid;
- Cartier has denied giving the Alleged Infringers permission to use it mark; and
- the mark is protected under the Lanham Act because it is uniquely associated with high-end jewelry.
The Alleged Infringers could also try to argue that their products are not counterfeits, which, as previously discussed, could potentially complicate the likeliness of confusion analysis. This defense is weak at best. Cartier and Amazon noted in their complaint that the Alleged Infringers’ products’ serial numbers do not correspond to the serial numbers Cartier assigns to genuine products. Cartier and Amazon also noted that while the alleged counterfeit products contain the same trademarks, there are aesthetic features that substantially differ from genuine Cartier products.
What Damages Might Amazon and Cartier Recover?
If successful, Cartier may recover actual damages, the Alleged Infringers’ profits from the sale of unauthorized jewelry and attorney’s fees under the Lanham Act. The Court may also award Cartier treble damages, which is an award up to three times the actual damages attributable to the Alleged Infringers’ trademark infringement. Alternatively, Cartier may receive statutory damages under 15 U.S.C. § 1117(c). Statutory damages are typically used when it is too complex to establish the level of harm caused to the plaintiff.
Conclusion
Cartier and Amazon likely have the stronger argument because if the Alleged Infringers did advertise, market and sell jewelry with Cartier’s mark, they did so without Cartier’s authorization. It follows that reasonable consumers would be misled by the Alleged Infringers’ actions. In addition, the Alleged Infringers’ potential counterarguments seem flimsy.
Counterfeit goods are considered to be against public policy to protect consumers from fraud and to protect intellectual property. The ability to receive a valid trademark also provides incentives to creators to produce quality products. If the Alleged Infringers’ products are deemed to be counterfeit, which is likely based on the complaint, they will almost certainly lose at trial.
If you are a trademark owner interested in learning more about your rights, contact an experienced attorney to discuss the best course of action.
Contributions to this blog by Melissa Levine.