Property Owner Liable for Tenant’s Sale of Counterfeit Goods

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Earlier this year, a jury in New York federal court returned a verdict of $1.1 million in favor of Omega SA and its parents Swatch SA.  Omega sued 375 Canal LLC in 2012 regarding tenants selling counterfeit goods on 375 Canal’s property.  The jury found that 375 Canal and the landlord could have stopped the counterfeit sales, but did not.

Counsel for Omega asked a jury to “punish” 375 Canal and its owners, New York real estate developers Albert, Jason, and Jody Laboz, for allowing the property to be a “haven of counterfeiting activity for years.”  The jury found that 375 Canal knew about the infringing sales or willfully turned a blind eye to the seller’s counterfeit sales and continued to  lease the property to the counterfeiters.  Omega was liable for contributory trademark infringement (https://www.law360.com/dockets/download/5d0174472ef7e801af789f18?doc_url=https%3A%2F%2Fecf.nysd.uscourts.gov%2Fdoc1%2F127124921910&label=Case+Filing).

This should be a wake-up call to property owners to be aware of the business operations of tenants on its properties.  Property owners that have tenants selling products should pay attention to the legitimacy of the products being sold.  If they turn a blind eye, the property owner can face a hefty judgment in the courts.

Legitimate re-sellers of protected brands should look for authorization from the manufacturer and/or brand holder to verify the products are allowed to be sold by the tenant.  Authorization often takes the form of license agreements and distribution agreements.

Whatever the case, property owners should be on the look out to make sure its tenants are authorized to sell products in the leased space.  If not, the property owner should not look away and let the unauthorized activity continue.  It should act promptly to cease all unauthorized sales on its property to avoid a similar result as in Omega SA.

For any questions about trademarks, patents, or copyrights, contact Greg Popowitz.

Greg M. Popowitz, Esq.

Registered Patent Attorney

AV Rated by Martindale-Hubbell

Intellectual Property Litigation

ASSOULINE & BERLOWE, P.A.

213 East Sheridan Street, Suite 3

Dania Beach, Florida  33004

Main: 954.929.1899

Fax: 954.922.6662

Email: GMP@assoulineberlowe.com

http://www.assoulineberlowe.com/

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Filed under Business Litigation, commercial litigation, Intellectual Property, IP Litigation, Litigation, trademark, Uncategorized

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