NFL Scores Big Win Against Websites Offering Counterfeit Merchandise

On June 28th, U.S. District Judge Lorna G. Schofield of the Southern District of New York entered a default judgment in favor of the National Football League® (“NFL®”) against operators of more than 1,997 websites utilizing 1,223 infringing domain names, all of which were offering counterfeit NFL merchandise. In doing so, the District Court awarded the NFL a $273 million judgment against the website operators and injunctive relief.

As set forth in the District Court’s Order, the defendant websites were offering counterfeit apparel and other merchandise that bore the marks of the NFL® and its professional football teams. The NFL® moved for a default judgment after the defendant website operators failed to respond to the complaint. The NFL® was unable to identify the individuals operating the websites as they employed use of false identities and inaccurate contact information, a common scheme utilized by counterfeiters selling merchandise online.

Although the NFL® was unable to identify the individuals operating the defendant websites, it was able to provide the District Court with anecdotal evidence of the scope of damages based on its review of various PayPal® accounts utilized by certain of the website operators. Given the lack of evidence to compute actual damages, the NFL® sought and was granted statutory damages for trademark counterfeiting relating to the merchandise totaling $150,000,000 and an additional $123,000,000 for willful cybersquatting relating to the infringing domain names.

In addition, Judge Schofield granted the NFL’s request for numerous forms of injunctive relief, including: a restraint on the funds in the PayPal® accounts relating to the websites, orders for the hosting companies to shut down the infringing websites, seizure of the infringing domain names, and a broad permanent injunction intended to facilitate the NFL’s ability to shut down other websites it identifies as offering counterfeit NFL® merchandise.

Gibbons will continue to monitor and report on noteworthy cases and legislation relating to brand protection and anti-counterfeiting.