On December 11, 2015, MLB, NHL, and NBA league affiliates filed for a default judgment in an Illinois federal court against online counterfeiters who have failed to respond to the leagues’ pleadings.
League affiliates brought suit in October, seeking to prevent unidentified online counterfeiters from continuing to sell products that infringe upon their respective trademarks. Additionally, the leagues claimed $2 million in damages against each defendant retailer for trademarks that have already been infringed upon. The leagues contend that online counterfeiters — believed to be based in China — have created multiple online forums, which use their trademarks and sell merchandise without a license. The leagues’ concerns in filing suit are not without merit. If you have ever searched online for your favorite team’s merchandise, you have likely stumbled upon a site that sells counterfeited gear at heavily “discounted prices.” Whether or not you realize that these sites are selling counterfeited merchandise, it can be tempting to place an order as it is much cheaper than buying from a leagues official store. Obviously, this tends to take revenue directly out of the pockets of professional sports organizations.
In November, the leagues asked the court for a temporary restraining order (TRO), prohibiting the continued sale of counterfeited merchandise online. U.S. District Judge Andrea R. Wood granted the TRO after the plaintiffs put forth facts and evidence supporting their claim that the continued sale of counterfeit merchandise would cause “immediate and irreparable injury, loss or damage”.
Last Friday, the plaintiffs asked Judge Wood to grant a default judgment against the unidentified online counterfeiters as they did not respond to the leagues’ pleadings. The motion states, “[d]espite having been served with process, defaulting defendants have ignored these proceedings and failed to answer or otherwise plead.”
The plaintiffs’ motion went on and stated, “[g]iven the broader economic losses and harm to the job market caused by counterfeiting, coupled with the possible dangers to consumers who are tricked into purchasing low-quality, counterfeit products over the internet, it is important to both penalize defendants and try to deter future violations.”
The marketing and sale of counterfeited sports merchandise through online platforms has been a perpetual issue over recent years. If history is any indication, a default judgment will likely provide short-term benefits, causing offending websites to be shut down and infringing domain names to be transferred to the trademark holders. However, whether a default judgment, if granted, will have a long-term deterrent effect is a question that remains to be answered.