Louis Vuitton lawsuit set to make waves in counterfeit liability

Intellectual property lawyers are welcoming the lawsuit that luxury fashion brand Louis Vuitton has pinged on a Toronto flea market, claiming it could set a precedent in the fight against fakes.

The lawsuit, which the fashion brand filed last year against the owners and operators of Dr Flea's Flea Market, alleges the landlords knowingly or negligently allowed the advertisement and sale of fake Louis Vuitton goods that infringed the brand's copyright.

The case is considered the first of its kind in Canada.

Many countries have laws in place that hold market landlords accountable for their vendors' activities but Canada has been slow to adopt similar legislation.

According to IP lawyers, reported by The Globe and Mail, a legal win for Louis Vuitton could see more brands targeting market stall traders and their landlords who flout trademarks and IP rights.

Karen MacDonald, a Vancouver patent and trademark lawyer, said this suit could pave the way for an added weapon in the anti-counterfeiting armoury.

"A lot of brand owners would love to see the law in Canada expanded just because it gives us a tool to get assistance from flea markets in order to try and shut down this activity," she said. "Otherwise it's death by 1,000 cuts for brand owners when you're dealing with flea markets and there's so many people who are selling them. It's a bit of a whack-a-mole game."

Teresa Scassa, a professor at the University of Ottawa, told The Globe and Mail the case was highlighting an important issue around markets and landlord accountability. "If you start to put some legal responsibility on them, if there's a risk of liability, then there's a chance that that will make them more careful about who is selling in their spaces and what they're selling in those spaces."

Giuseppina D'Agostino, founder and director of the intellectual property law programme at York University's Osgoode Hall Law School, also told The Globe and Mail that if the case was successful it would set a precedent, placing pressure on landlords to ensure their vendors weren't selling knock-offs and infringing IP rights, leading to stricter tenant contracts.

However, she believed this was just a small aspect in a bigger fight where even enforcement of landlords may not be enough to make much of a dent in counterfeit trade. "I think it may change some behaviour in terms of landlords being more judicious in who they lease their space to but long term I don't think it will really address the bigger problem of infringing merchandise. There's just too many outlets, too many hubs… it's very hard to contain."

The Dr Flea's Flea Market at the centre of the Louis Vuitton lawsuit has already been the subject of three police raids over several years targeting counterfeit products, including the seizure of about $1 million worth of bogus goods, as well as Louis Vuitton fakes, in 2012.

The fashion brand had included this information in its legal claim, although there was a dispute as to whether this would be allowed in the court proceedings. However, a judge has ruled that the information can be included in the suit.

Louis Vuitton is seeking damages from the landlord for harm to the brand through IP infringement, claiming the landlord is liable for the sale of counterfeits at the market. According to the fashion brand, it alleges that the landlord knowingly, intentionally and/or negligently permitted and/or facilitated the illicit activity since 2008. It will be up to Louis Vuitton to prove the landlord had knowledge that counterfeit trade was taking place or wilfully ignored it.

Louis Vuitton has had success in the US with such lawsuits in the past where several landlords have been ordered to refuse to lease space to vendors that sell counterfeit goods. In China too, the fashion brand has won rulings where landlords were held liable.

The Canadian case could take as many three years before a ruling is made.