Counter(defeated): Louis Vuitton awarded compensatory and punitive damages

In a recent summary trial decision of the Federal Court, Justice McHaffie found multiple defendants selling counterfeit Louis Vuitton goods liable for violations of the Trademarks Act (TMA) and Copyright Act (CA). The defendants were ordered to deliver up all infringing articles in their possession, pay $110,750 in damages, and pay $200,000 in punitive damages.

The counterfeit Louis Vuitton goods were being sold in multiple locations in the GTA from at least spring of 2021 to February 2024. In December 2022, the plaintiffs (Louis Vuitton Malletier and Louis Vuitton Canada, collectively “Louis Vuitton”) delivered cease and desist letters to the defendants to no avail. Louis Vuitton then commenced the current action and was granted both an Anton Piller Order and Mareva Order for the purpose of searching for, identifying, and removing evidence. The orders were extended a number of times and Louis Vuitton executed multiple searches throughout this time period.

Louis Vuitton’s motion for summary trial raised four issues: (1) is this an appropriate case for summary trial; (2) has Louis Vuitton met its onus to establish one or more TMA and CA violations; (3) has Louis Vuitton met its onus to demonstrate each defendant is liable; and (4) if so, what remedies are appropriate?

Question 1 was not contested which further favoured granting the summary trial. Question 2 was also uncontested; nevertheless, Justice McHaffie was satisfied on the basis of Louis Vuitton’s evidence that it had established significant goodwill in its various trademarks, that it was the registered owner of the trademarks, that the counterfeit goods bore identical copies of Louis Vuitton’s trademarks, and that Louis Vuitton had not authorized the defendants to import, sell, or offer for sale goods bearing its trademarks.

Justice McHaffie found four of the nine listed defendants not liable for infringement. His reasons included that awareness of the counterfeit business and being listed on shipping labels and documents connected with the business were not sufficient to demonstrate infringement or other liability. Likewise, being listed as an officer or a director of the counterfeit business was not sufficient to show liability because “personal liability will only attach where there is ‘that degree and kind of personal involvement by which the director or officer makes the tortious act [their] own’.”

Justice McHaffie concluded damages for the TMA violations (infringement and passing off) should be estimated using the standard amounts from the case law, multiplied to reflect a notional “turnover” of inventory, and ordered $90,750 be paid. For copyright infringement, Justice McHaffie awarded $20,000 which was in line with the maximum available statutory damages awarded in counterfeiting cases (only one Louis Vuitton copyright was found to have been infringed). Finally, punitive damages were awarded in the amount of $200,000 because the evidence established the defendants conduct was planned and deliberate, done for financial gain with disregard for Louis Vuitton’s intellectual property rights, and persisted over the course of two full years, and because compensatory damages were insufficient and deterrence was needed. The defendants were also ordered to deliver up all counterfeit articles in their possession and to provide the contact information of their manufacturer(s) or supplier(s) of the articles to Louis Vuitton.

The full decision can be read here.