Louis Vuitton has filed suit against Pandabuy and A1luxurygoods, accusing the companies of facilitating the sale of counterfeits bearing its trademarks. In the lawsuit, which was filed with the U.S. District Court for the Southern District of Florida on October 15, Louis Vuitton claims that Pandabuy, a Chinese e-commerce agency that ships products from China to consumers internationally, and A1luxurygoods (collectively, the “defendants”) are actively involved in the sale and distribution of the counterfeits – from sourcing counterfeit products to inspecting and shipping them with the aim of helping consumers to sidestep detection by customs authorities.
Setting the stage in the complaint, Louis Vuitton alleges that 5-year-old Pandabuy positions itself as a shopping agent that connects international customers with Chinese e-commerce platforms like Taobao and Yupoo. However, Louis Vuitton maintains that the company’s services are not entirely above-board, stating that Pandabuy engages in “the sale of counterfeit goods by finding counterfeit products for consumers … purchasing the products, shipping the products to [its] warehouse, inspecting the products, modifying original packaging through ‘tag removal’ services [to conceal the counterfeit nature of these products], and even recommending which shipment methods are most likely to successfully pass destination-country customs.”
At the same time, Louis Vuitton contends that Pandabuy engaged in “quality inspection” services in which its employees inspect the items, including counterfeit goods, and send photographs to the customer before shipping them. In a nod to the alleged willfulness of its activities, Louis Vuitton asserts that in one instance, its investigator purchased a counterfeit Louis Vuitton handbag through Pandabuy, and the company’s agent reassured the investigator that the copycat bag “looks OK, the quality is still good, see if you like it.”
Counterfeits and Customs Evasion
Louis Vuitton claims that it conducted an investigation into Pandabuy’s operations, namely, purchasing two counterfeit Louis Vuitton-branded handbags from the defendants. The first purchase involved a handbag purchased from Pandabuy, which was sourced from A1luxurygoods on Yupoo. The product was inspected at Pandabuy’s warehouse before being shipped to the U.S, the complaint states. For the second purchase, Louis Vuitton’s investigator used Pandabuy’s “Find&Buy” option to request a Louis Vuitton handbag using a photograph of a genuine product from Louis Vuitton’s website. Pandabuy’s Shopping Agent sourced a counterfeit product and communicated the details to the investigator, who asked whether it was a “high-end copy.” The agent replied: “The seller said the original order price was 700 [Chinese yuan].”
Additionally, the complaint goes into detail about how Pandabuy assists customers in evading customs by recommending low-risk shipping methods to ensure the counterfeit products are not intercepted by authorities. The lawsuit states that Pandabuy provides customers with specific “logistics routes” designed to minimize the risk of customs seizures. “Pandabuy not only recommends ‘a low-risk logistics route for [the consumer] based on the product attributes and transportation experience’ but it also provides consumers with the option to purchase insurance for their parcel,” the plaintiffs allege.
Harm and Consumer Confusion
Louis Vuitton claims that the defendants’ sale of counterfeit goods is causing substantial damage to its brand. The counterfeit products at issue, while visually similar to genuine Louis Vuitton items, are made from “significantly inferior quality and design.” This leads to “initial interest confusion,” per Louis Vuitton, as consumers mistakenly believe they are purchasing genuine Louis Vuitton products, as well as confusion in a “post-sale” capacity. The complaint further argues that the “[d]efendants’ wrongful conduct is likely to create a false impression and deceive customers” into thinking that the counterfeit goods are associated with Louis Vuitton, which in turn devalues the brand’s reputation and economic interests.
Setting out federal trademark counterfeiting, infringement, false designation of origin, and unfair competition causes of action, Louis Vuitton is seeking injunctive relief and monetary damages, and the company is asking the court for a temporary restraining order to halt the sale and distribution of counterfeit goods and prevent the defendants from using its trademarks. The LVMH-owned brand also requests statutory damages of up to $2 million per counterfeit trademark used and the recovery of all profits generated by the defendants from the counterfeit sales, among other remedies surrounding advertising costs.
It argues that the defendants should also bear the cost of advertising to correct any “erroneous impression” consumers may have about the authenticity of the products they purchased.
THE BIGGER PICTURE: Louis Vuitton’s lawsuit comes amid mounting controversy for Pandabuy, which has grown in popularity in recent years, with Bloomberg reporting this spring that its website was visited by more than 20 million people in March, alone, and its aggressive marketing, which sees the company give influencer-focused discount codes and encourages “Panda haul” videos, has helped drive demand among young consumers in search of counterfeit goods.
Following reports of counterfeiting-centric activities, Chinese police raided the company’s office and several warehouses in Hangzhou, arresting more than 30 people and seizing millions of counterfeit goods – from fake Goyard handbags to replica Manchester City football jerseys.
Not limited to actions in China, Off-White, SP5DER, Denim Tears, Palace Skateboards, Loewe, and Rhude filed suit against Pandabuy in a New York federal court in April, accusing the company of trademark infringement and counterfeiting and successfully seeking a preliminary injunction. That case is still underway before the U.S. District Court for the Southern District of New York.
The case is Louis Vuitton Malletier v. Panda (UK) Technology Co., Limited, et al., 0:24-cv-61913 (S.D. Fla.)
Share
