Trademark Infringement Lawsuit | Converse Claims Counterfeit
Well, you’ve been named in a counterfeit lawsuit filed by Converse. What does this mean for your online business?! Before we dive into that, know that this is not a reason to panic. It’s not necessarily the end of your online selling career! Is it disruptive? Will the suit cost you money? Yes and yes. But, just because allegations of trademark infringement were made does not mean you should walk away.
If you take a look through the legal complaint associated with the lawsuit, you’ll see that it is a template. The content of the complaint differs from other such infringement lawsuits because it pertains to Converse. Why is it a template? Why are the allegations almost exactly the same as many other suits filed in the same court? Because this is what’s called a Schedule A lawsuit. Converse, and other brands like it, file these counterfeit claims as Schedule A so they can accuse a long list of online sellers at once. The majority of Schedule A lawsuits are aimed at e-commerce operators based in China. By spraying a bunch of sellers with allegations of infringement, Converse can more efficiently address what they believe to be counterfeit sales of their goods.
“Schedule A” Lawsuit Filed by Converse
The so called “damage[] through consumer confusion, dilution, and tarnishment of [Converse’s] valuable trademarks,” alleges the brand, comes from the actions of the Defendants. What are these actions? Sellers – perhaps you among them – fraudulently represented themselves as authorized dealers and sold counterfeit goods online to customers in the United States. The platforms where this supposed activity occurred include Amazon, Etsy, Temu, Walmart, and more.
As we mentioned, the legal complaint is pretty much a template. The allegations, therefore, are basically the same as all the other Schedule A infringement cases we’ve written about in the past. Chief among the claims, Converse states the Defendants work together to conceal their identities, share counterfeit tips, and otherwise strategically dupe consumers so that they can sell fake products and avoid taking legal responsibility once caught.
Now, what’s the main type of disruption this case causes for online sellers? A Temporary Restraining Order (TRO). The restraining order affects your ability to sell Converse and other branded products on various platforms. Not only does it stifle your agency as a seller, it also freezes all the money in your online selling account! That means, any money you earned from selling Converse products – you can’t touch it. You can’t move it. It’s frozen! What should sellers do at this point?
Is Reaching a Settlement the Best Option?
We have seen many sellers attempt to settle directly with brands like Converse. Reaching a settlement in a trademark infringement case is definitely an option. Is it the best option? Perhaps not. The reason why it may not be advantageous for sellers to settle with brands accusing them of counterfeit is simple. Money. Brands that wage infringement allegations against online sellers in Schedule A suits usually settle with the Defendants for 60% of their frozen money. That’s over half of the money sellers earned from selling on their own.
Consider what we mentioned earlier regarding Schedule A lawsuits. The type of filing gives companies the power to claim a good many sellers engaged in counterfeiting. If Converse settles at 60% with all of the named sellers in this case, they’ve reaped a healthy amount of money from mere allegations with a minimal amount of headache. The strategy, for Converse, is beneficial. For sellers, not so much.
Before you do anything, please don’t abandon the issue! And, provide a response to the court! You can easily avoid a more complicated outcome, which is a Default Judgment, by responding. The cost of walking away might very well exceed what it will cost you to take action and find a resolution. You’ll have many more options as a Defendant if you respond to the court. We’ve seen many sellers accused of infringement walk away and then get stuck paying damages with little room for a solution. Don’t let that happen to you!
Respond to the Lawsuit, Get an Attorney | Converse Claims Counterfeit
And, to make the need for a response more convincing, you should know that if you abandon the lawsuit, you’ll lose all that frozen money. That’s right! Sellers who do nothing will forfeit all of the money in their account, frozen by the TRO, to Converse. It goes straight to them! So, should you retain legal counsel and develop a resolution that is more favorable? We would say of course!
Undoubtedly, taking legal action as a seller will comes at a cost. Is it worthwhile? In most cases, it is. An attorney can work with Converse on your behalf so that you can be cleared of any wrongdoing and keep your hard-earned money! You don’t want the reputation of your business to be damaged any further than it already has been. By responding, utilizing an intellectual property attorney, and investing a reasonable amount of effort and resources, you can get back to selling and earning to your fullest potential!
Contact our team at Stockman & Poropat, PLLC today! We will chat with you during a free consultation and decide on the best strategy to move forward.
Download the legal complaint below:
Up next we will be discussing the Chrome Hearts Trademark Infringement lawsuit.
