Vuitton fails in Federal Court bid
The French-headquartered label initiated proceedings against the owner of the Carrara Markets, TOEA, together with its manager, John Rosenlund, in November 2005 alleging a number of stall operators had been caught selling counterfeit Vuitton merchandise.
At least three stall holders were found offloading the dodgy goods after Vuitton engaged a private investigation firm to set up a sting to recover the fraudulent products.
LVM argued that because TOEA and Rosenlund's knew of the sale of fake Vuitton handbags, purses, wallets, scarves and watches but failed to censure the guilty parties and/or terminate their leases, they were jointly responsible for alleged offences against the Trade Marks Act committed by the stall holders.
The case, the first of its kind in Australia, was the latest salvo fired by the textile, clothing and footwear industry in its attempt to stamp out Australia's lucrative fake goods industry. It is believed as much as 20 per cent of the $6 billion worth of products sold at Australian markets annually are counterfeit.
However in a decision released late last month, the judge hearing the case, Justice Dowsett, stated that in order for a party to be held liable in such circumstances, LVM would have to prove TOEA and Rosenlund "acted in concert with each stall holder" in committing the alleged offences.
Justice Dowsett said submissions made by defence lawyers McLaughlins Solicitors suggesting TOEA and Rosenlund had actively attempted to stop the sale of the infringing goods - through the use of both verbal and written warnings - convinced him this was not the case.
"It is submitted that although there was no duty on [TOEA and Rosenlund] to take steps to prevent infringement, the failure to do so evidenced an intention to encourage infringement. I am unpersuaded that either [TOEA or Rosenlund] acted in common with any of the stall holders in the actions that constituted infringement of [LVM's] copyrights."
It is expected the decision will have wide-ranging implications for many brand owners who seem destined to face significant barriers in attempting to hold market owners responsible for the sale of counterfeit goods in the 1200-plus markets across the country.
Louis Vuitton declined to comment on the case, however Middleton's Lawyers - which acts for a number of well-known fashion brand owners attempting to stamp out counterfeiters - said while the court found market operators were not liable for the stall holders' conduct, the case demonstrated a rising trend for brand owners to pursue third parties where intellectual property rights had been infringed.
Middletons senior association Lisa Egan - whose company's clients include Diesel, Scanlan & Theodore, Bettina Liano, Mink Pink, G-Star, Elwood and Converse - among others - said it was no longer good enough for parties in this position to merely "turn a blind eye" to these issues.
Egan said owing to the scarcity of police resources, the onus was on brand owners themselves, alongside lawyers and investigators, to maintain their own civil enforcement programs ands follow up on any infringements they found in the market.
"This is important to ensure that the message gets out to the market that counterfeiting will not be tolerated by the brand owner and that legal action will be taken."