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Financial Fraud Law

True Religion Awarded $863.9 Million Judgment Against Chinese Counterfeiters

A federal court in New York has awarded the jeanswear and lifestyle brand True Religion $8.15 million in damages against 106 China-based defendants who were each found to be operating “rogue” True Religion websites and selling counterfeits of True Religion’s US-made jeans along with other True Religion apparel and accessories.  This award of $863.9 million in total damages is believed to be the largest judgment ever issued in a counterfeiting case.  

United States District Judge Harold Baer, Jr., issued the award as part of final judgment and permanent injunction finding that each defendant had engaged in willful trademark counterfeiting and copyright infringement and that each was in default. In addition to monetary damages, the court ordered that 282 domain names used by defendants to sell counterfeit True Religion products, many of which had previously been disabled under a temporary restraining order, be permanently locked and transferred to True Religion. The order also provides a mechanism for True Religion to obtain supplemental relief from the court to disable any additional rogue websites that any defendant might set up in the future. “This judgment has played a pivotal role in our company’s anti-counterfeiting strategy and will allow True Religion to take more effective and efficient action against these online counterfeiters moving forward,” said True Religion’s General Counsel Deborah Greaves. 
 
Each of the “rogue” web sites in the litigation was designed to appear to be an official True Religion site or an authorized retailer of True Religion products. The counterfeiters copied marketing images, pictures of True Religion products and detailed product descriptions directly from True Religion’s own website.
 
Many of the "rogue sites" were set up at domain names incorporating the name “True Religion,” such as truereligionbrand-jeans.com, truereligionfactoryoutlet.net, thetruereligionjeansoutlet.us and truereligion4sale.com. The fact that True Religion manufactures its jeans in the US did not stop defendants from shipping counterfeit True Religion jeans from China complete with false labels stating they were made in the US.
 
“Online counterfeiting through rogue websites is of particular concern to our customers, because the sites look authentic and may offer products at only a slight discount from our suggested retail price,” said Deborah Greaves, General Counsel for True Religion. “These sites seem so much more credible than, say, a vendor on Canal Street. Often, it’s not until the jeans arrive in the mail in a strange package that our customers see the poor quality of the product and realize they have been duped.”
 
In order to avoid detection, the counterfeiters operated under multiple false and incomplete identities. “The Internet provides counterfeiters with many unique advantages -- anonymity, the ability to set up multiple web stores cheaply and quickly, and the ability to do business from foreign locations beyond the reach of US authorities,” said Scott Gelin, a shareholder at Greenberg Traurig and lead counsel for True Religion in this lawsuit. “By obtaining injunctions to disable these ‘rogue’ websites and freeze counterfeiters’ assets, we are taking some of that advantage back.”   
 
True Religion was represented in this case by Greenberg Traurig, LLP, and the investigation company Vaudra Ltd.

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