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Recent Decision in Nike Counterfeiting Case Bad News for Vandelay Industries

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Sterne, Kessler, Goldstein & Fox

We jest!  Because, of course, Vandelay Industries – famed import/export company referenced by Seinfeld character George Costanza’s (and owned by the multi-talented “Art Vandelay”) -- is fictitious.  But for actual import/export companies, the July 19, 2018 decision issued in the case of Nike, Inc. v. Eastern Ports Custom Brokers, Inc. et al, 2-11-cv-04390 (NJD 2018-07-19, Order) (Claire C. Cecchi), is a cautionary tale for those involved with the import (and export!) of counterfeit goods.

The New Jersey case involved two seized shipping containers of 20,320 counterfeit Nike shoes.  Nike filed a motion for summary judgment on its trademark infringement claim, and the defendants countered by arguing that their actions did not constitute “use” in commerce since they were simply innocent service providers who didn’t know that their services were being used by the actual, direct counterfeiters to bring goods into the U.S.

The court noted that it is well-settled that the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress,” which includes commerce with foreign countries – such as the importation of goods from abroad. Thus, the active involvement and arrangement in transporting counterfeit goods was sufficient to support an infringement claim against the importing/exporting entities.

As the court noted, trademark infringement is a strict liability statute, and no intent is necessary to find liability.  The Lanham Act is clear that anyone who uses a mark in commerce in such a way that may cause confusion is liable. Hopefully, publishing decisions such as this will help deter importers/exporters, not in TV-land, from doing business with counterfeiters.

For more on Vandelay Industries see:  https://www.youtube.com/watch?v=LnIKiNAupRs


This article appeared in the July 2018 issue of MarkIt to Market. To view our past issues, as well as other firm newsletters, please click here.