## Facts

- Fendi, a luxury fashion company, owned trademarks used on leather goods and accessories.
- Ashley Reed Trading, Inc., and its principals Scott and James Ressler, sold Fendi-branded handbags and accessories in the United States.
- Fendi contacted Ashley Reed and met with its representatives to express concern that Ashley Reed was selling counterfeit goods.
- After receiving notice, Ashley Reed continued selling the challenged Fendi-branded items.
- Fendi presented unrebutted evidence that at least twenty items sold by defendants were counterfeit and not manufactured by Fendi.
- Defendants were unable to identify with certainty the source of certain goods they sold.
- Fendi submitted evidence of obvious differences between the items sold by Ashley Reed and authentic Fendi goods.
- The district court found indicia of bad faith, including falsified invoices, removal of a “right to sell” clause from warranty agreements, and returns of Fendi-branded merchandise after the lawsuit began.
- The district court granted summary judgment to Fendi on Lanham Act and New York-law claims, later found willfulness, and entered a monetary judgment including enhanced relief.

## Issues

1. Whether willfulness for trademark counterfeiting and infringement could be found on summary judgment without direct proof that defendants had actual knowledge the goods were counterfeit.
2. Whether the record supported summary judgment on liability for Lanham Act counterfeiting and false designation of origin, federal and state dilution, and New York unfair competition.
3. Whether the district court’s monetary relief determination required modification or further proceedings.

## Decision

- The Second Circuit affirmed the findings of liability for trademark counterfeiting, false designation of origin, dilution, and unfair competition.
- The Second Circuit affirmed the district court’s willfulness finding, holding that circumstantial evidence supported willfulness notwithstanding the asserted lack of actual knowledge.
- The Second Circuit vacated parts of the monetary judgment and remanded for further proceedings concerning damages.

## Legal Principles

- Willfulness in trademark counterfeiting may be established through circumstantial evidence, including continued sales after notice of suspected counterfeiting, obvious discrepancies between genuine and sold goods, and other bad-faith conduct.
- A defendant’s claimed ignorance does not bar a willfulness finding where the record supports willful blindness or deliberate disregard of a high probability of infringement.
- Sale of non-genuine goods bearing another’s marks can support liability for Lanham Act counterfeiting and false designation of origin, as well as related dilution and unfair-competition claims under federal and New York law.
- Willfulness may affect the availability and calculation of monetary remedies, including disgorgement and enhanced relief, and errors in damages analysis may require remand even when liability is affirmed.

## Conclusion

The Second Circuit sustained summary judgment liability and a willfulness finding against a retailer selling counterfeit Fendi-branded goods, concluding that notice, obvious signs of inauthenticity, and bad-faith conduct supported willfulness without direct proof of actual knowledge, while requiring further proceedings to correct or clarify the damages award.


Fendi Adele, S.R.L. v. Ashley Reed Trading, Inc., 507 F. App’x 26 (2d Cir. 2013)