- November 27, 2019
- Posted by: Hanson Law Firm
- Categories: Real Estate, War Story Wednesdays
Hear ye, hear ye! The end of a protracted legal battle is upon us!
You might recognize the name “Omega SA v. 375 Canal LLC” from a brief mention on your favorite roguishly handsome attorney’s blog a little while back. If you skipped over that entry, 1) rude, and 2) we’re getting deeper into the case today, so you’ll be all caught up.
In a nutshell, the suit alleges that the landlord of 375 Canal Street turned a blind eye to counterfeit sales in their commercial space. “Willful blindness” is the technical term, and “willful” is the operative part. You’ve gotta know it’s happening and still choose not to resolve the issue.
Over the course of the case, representatives of plaintiffs Omega SA proved that the defendant had been made aware of their tenants’ activities on multiple occasions. The landlord proceeded to sit on their hands and do nothing. This inaction didn’t win them a lot of friends in court, especially considering they’d already been sued back in 2006 for identical “willful blindness” in an infringement case involving Louis Vuitton, as well as further involvement in two other similar cases. The defendant had also received a letter from Omega detailing a number of arrests on the premises courtesy of New York’s finest, as well as several litigation complaints.
You know that British poster from WWII that says “Keep Calm and Carry On?” Feels like our friends at Canal Street might’ve taken that sentiment a little too far.
After seven long years, a Manhattan jury found the landlord of 375 Canal LLC guilty of contributory liability in a trademark counterfeiting case. Omega SA was awarded $1.1 million in damages — $275,000 per infringement. Considering fines can go up to $2 million per infringement, it’s nowhere near as bad as it could’ve been. Omega SA also sought $1 million in attorney’s fees, but was denied on account of a lack of actual damages – the statutory damages plus the entry of a permanent injunction were judged sufficient to deter the defendant from future mischief. Again, not nearly as bad as it could’ve been. The latest development is 375 Canal LLC seeking an appeal, but things don’t look too rosy for them.
Most trademark infringement cases settle. This is a rare instance of one actually getting to trial and following through to an indictment. It provides a valuable precedent for future plaintiffs – it’s often hard or downright impossible to recoup any significant losses from individual, less asset-rich sellers, but commercial landlords might be a more fruitful avenue to explore. This means property owners need to be more cautious than ever. Triple-check contracts and make sure your lease explicitly bans bootleg products. Seek assurance that indie retail tenants are trustworthy, with references or a solid track record in sales. Keep an eye out for suspicious activity without being so overbearing you risk a harassment suit. Don’t just throw letters from trademark holders into the shredder. Talk to your lawyer, for cryin’ out loud!