Rolex Watch U.S.A. v. Jones

Citation: Rolex Watch U.S.A., Inc. v. Jones, 2000 U.S. Dist. LEXIS 15082 (S.D.N.Y. 2000) (summary judgment); 2002 U.S. Dist. LEXIS 6657 (S.D.N.Y. Apr. 17, 2002) (magistrate judge's report and recommendation on damages).

Factual Background
Defendant sold counterfeit watches and shirts bearing plaintiffs’ trademarks ROLEX and POLO through his websites including “knockoffalley.com” and “replica4u.com.”

Trial Court Proceedings
In October 2000, the court granted plaintiffs’ motion for summary judgment on its trademark infringement and dilution claims, and entered a permanent injunction in January 2001.

In granting plaintiff’s motion for summary judgment on the infringement claim, the court noted that by marketing his products as replicas, defendant “adopted [his] mark[s] with the intention of capitalizing on plaintiff[s’] reputation and goodwill and any confusion between his and the senior user[s’] products.”

The likelihood of confusion was not diminished because defendant’s website displayed a disclaimer stating that the products were replicas, and that “[by] purchasing one of these replicas, the buy [sic] agrees not to sell or represent them as genuine.” This disclaimer failed to diminish the likelihood of confusion because post-sale confusion was also actionable.

The matter was then referred to a magistrate judge to determine damages. Plaintiffs were unable to obtain meaningful discovery from defendant regarding defendant’s profits. Noting the willful violations by defendant, the magistrate judge recommended statutory damages for trademark counterfeiting of $500,000 for Rolex and $100,000 for Polo. The court distinguished this case from storefront counterfeiting cases in which only $25,000 was awarded per trademark violation because those amounts “would plainly be inadequate to compensate the plaintiffs” here “[i]n view of the virtually limitless number of customers available to [defendant] through his websites.”

The magistrate judge also recommended awarding attorney’s fees based on defendant’s willful infringement and defendant’s conduct that increased plaintiff’s legal costs.

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