Attorneys for a California woman who says she unwittingly purchased hoodies with knockoff logos of the United Nations and Disney+ hit “The Mandalorian” are seeking class-action status for her lawsuit against print-on-demand vendor Redbubble.
“For far too long, websites that knowingly peddle massive quantities of clear and obvious counterfeit goods have attempted to take shelter under legal doctrines that are inapplicable to their actual business models or that are the product of legal decisions from the days when the internet was in its infancy,” says Keith Wesley, managing partner of law firm Browne George Ross O’Brien Annaguey & Ellis, which is handling the case. “Decades later, and with the internet now a dominant feature in our commercial world, courts have begun to recognize that a website with its hands in each step of the production and sale of counterfeits is no less pernicious than the counterfeit dealer on Canal Street or in Santee Alley, and that online infringement is just as unlawful and damaging as infringement in a brick-and-mortar store.”
Redbubble, a 15-year-old Australian company with facilities in San Francisco, operates an online service where purported artists can upload designs to be printed on items from stickers to T-shirts and phone cases, according to the lawsuit, filed in federal court in Sacramento.
Its business model generates hundreds of millions of dollars a year in revenue – the benefit of “massive quantities of counterfeit” and trademark-infringing items, the lawsuit claims, adding that Redbubble does little to stop their sale.
As proof the company is aware of the violations, the complaint points to the “sheer quantity” of counterfeit items offered as well as their exact duplication of iconic intellectual properties from Nike to McDonald’s, fashion designer Coco Chanel and automaker Ferrari.
Browne George estimates the potential class of online-shopping victims to number in the tens of thousands at minimum, all of whom would be known or readily identifiable by Redbubble.
In seeking class status, Wesley and partner Matthew Venezia point out that affected customers are so spread out geographically and the amounts at issue so small that individual cases would not be viable either financially or logistically.
“Redbubble has, to this point, been able to force IP owners to play a game of Whac-A-Mole, with each IP owner only having standing to get a small amount of items pulled down, and thus leaving Redbubble free to continue selling vast amounts of infringing products. Similarly, disappointed customers have little recourse acting alone, unable to fund expensive litigation against a company with hundreds of millions of dollars in yearly revenue,” said Venezia.
The class action seeks to halt Redbubble from marketing and selling knock-off merchandise.
“Faced with multiple lawsuits already, Redbubble remains flooded with counterfeits. This appears to be a classic case where only class-wide or public injunctive relief will deter the wrongdoing.”
The case comes amid growing scrutiny of counterfeit merchandising in the digital marketplace.
The Organisation for Economic Cooperation and Development says international trade in counterfeit goods was valued at nearly $509B in 2016, according to a 2020 Department of Homeland Security report.
In the 15 years through 2018 seizures of knockoff merchandise at U.S. borders jumped from $94M to $1.4B, the report noted.
Near the end of President Trump’s term, he ordered his administration to gather data on online trademark infringement, and the U.S. Patent and Trademark Office published a notice in the Federal Register in early 2020 seeking input from patentholders, merchants and others on violations.
“As commerce continues to cross borders and reside more and more online, new measures must be implemented to stop counterfeit goods,” says Wesley. “A class action – particularly where the infringement is large-scale and obvious – seems uniquely qualified to help the cause, particularly as we wait for further legislative or executive action.”