For years, IP owners have complained about online infringement. But Chanel Inc. is doing something about it—something that other IP owners may want to emulate.
The luxury goods maker has brought an in rem action (against a property rather than a person) against more than 1,000 websites that allegedly sell counterfeit Chanel products, and has quickly obtained the court’s permission to seize the websites’ domain names.
U.S. courts have repeatedly ordered the seizure of domain names from infringing websites. “This relief has been issued in a multitude of cases because the courts recognize that it is the only effective means of stopping an online counterfeiter,” says Stephen Gaffigan, who is Chanel’s lead litigator in this matter.
The court held that it had the equitable power to order the seizure of Otamedia’s domain names. But it stated that if the infringing gray market items accounted for “only a small fraction of Otamedia’s sales,” seizing the domain names “would arguably be inequitable—a form of relief to be ordered, if at all, only after the exhaustion of less severe remedies.”
The court determined that the infringing sales constituted “a large proportion, if not the mainstay,” of Otamedia’s business. Because of that, and because Otamedia overtly refused to declare that it would abide in the future with the injunction against gray market sales, the court ordered the domain names to be transferred to Philip Morris.