Coach Trademark Infringement Action Takes an Interesting Twist

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Last week, there was a story in the news that Coach was threatening to sue for trademark infringement a woman who the luxury purse manufacturer claimed was selling false Coach purses on E-Bay. This isn’t the first time that the handbag manufacturer had taken action against those who were trying to make an extra buck on E-Bay or on other second-hand sites. The problem with this threat (in the form of a nasty cease-and-desist letter, along with a demand that she pay Coach damages) is that the person selling the purses on the on-line auction site is a former Coach employee who decided to sell her bags on the online auction site, as is her right. There was no trademark infringement as the purses were not counterfeit.

Now certainly, Coach has every right and should police on-line auction and second-hand good sites to ensure that there are no counterfeit products being sold. These goods cause companies to lose millions of dollars each  year. But, it is another story when a company bullies an individual and threatens her to stop doing what she is legally and legitimately allowed to do.

Here is the twist…the woman (Gina Kim) who was just threatened with a lawsuit is fighting back. She is now the lead plaintiff in a class action lawsuit against Coach. She is suing for defamation, misrepresentation of trademark infringement, violation of Washington’s Consumer Protection Act and tortious interference with business expectancy.

Here is a quote from the complaint:

Without investigating the validity of its allegations, Coach wantonly accuses consumers of infringing its trademarks by selling counterfeit Coach products. Coach apparently monitors online retailers such as E-Bay, looking for ads from consumers selling second hand Coach products. In response to such ads, Coach delegates a New York law firm to launch a threatening letter to the consumer. These letters accuse the consumer of trademark infringement, threaten legal action, and demand the immediate payment of damages to Coach in “settlement” of Coach’s threats. At the same time, Coach (or its New York law firm) informs the online retailer that infringing merchandise is being sold on its website. In many cases, this causes the online retailer to involuntarily remove the allegedly infringing ad, and to disable the consumer’s online account. This destroys any chance the consumer had to sell the Coach product second hand, and otherwise damages the consumer.

In many cases (such as that of the lead plaintiff identified here), Coach’s allegations of infringement are flatly false. It appears that Coach fails to conduct even a minimally reasonable investigation into its counterfeiting claims before threatening legal action. For example, the lead plaintiff identified in this Complaint is a former Coach employee, who owned, and tried to sell, genuine and legitimate Coach products It was entirely legal for her to do so. Coach’s threats against her were false, reckless, and unwarranted.

We need more stories of consumers and individuals fighting back against companies like Coach which use their weight, might and money for their own interests. Go get ’em, girl!

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