Ain’t Nothing Like the Real Thing
It seems these days that it’s impossible to tell what’s real. Photographs can be manipulated. Videos and sound bites can be fabricated. There are dozens of websites that sell knockoffs of name brand products.
The latest round of fake versions of products recently ended up in federal court. Estée Lauder sued Walmart in the Central District Court of California alleging that the big-box retailer sold counterfeit versions of the personal care company’s products on its website.
The cosmetics juggernaut accuses Walmart of selling fake versions of popular skincare and fragrance products from Lauder brands Aveda, Clinique, La Mer, Le Labo, and Tom Ford, which are also listed as plaintiffs in the suit. The products sold on Walmart’s website “bear marks that are identical with, substantially indistinguishable from, or confusingly similar” to products with Estée Lauder trademarks, the company alleges.
In court filings, Estée Lauder claims it purchased and then tested some of the products in question and determined that they did not originate from the beauty company. In the complaint, Estée Lauder shows side-by-side photographs of a perfume sold by Walmart called “Intense Peach” next to a Tom Ford fragrance called “Bitter Peach.” Both items come in orange packaging.
Estée Lauder asserts that Walmart was well aware that it was selling items on Walmart.com that infringed on its trademarked products and that the company does “very little” to ensure that the products it sells online are authentic. Although the products were sold by third-party sellers on Walmart’s online marketplace, Estée Lauder said the company played an active role in facilitating those sales to shoppers.
The complaint alleges the counterfeit products were promoted and advertised to shoppers on the website, that Estée Lauder’s trademarks were used in search engine optimization tools to drive traffic to the listings, and Walmart profited from the sales. Estée Lauder posited that “a person shopping on Walmart.com would have reasonably believed that Walmart, and not third-party sellers, was the seller” of the item, which could have caused confusion among shoppers, the complaint states.
“Defendants know or had reason to know that the sellers they partnered with and ‘regularly review[ed]’ were selling products which infringe upon the Estée Lauder Marks,” the suit declares. Estée Lauder characterized Walmart’s conduct as “extreme, outrageous, fraudulent … despicable and harmful.”
The allegedly counterfeit products included knockoffs of Estée Lauder’s Advanced Night Repair serum, Aveda hairbrushes, Clinique skin creams, La Mer lotions/moisturizers, Le Labo fragrances and Tom Ford fragrances.
The company is seeking monetary damages and is demanding that Walmart stop selling the allegedly counterfeit products, along with any other items bearing its trademark.
Estée Lauder faces an uphill battle ever since Tiffany sued eBay, Inc. in 2010 in federal court for selling counterfeits of its products on its online marketplace. The U.S. Court of Appeals for the Second Circuit ruled in favor of eBay, affirming that online marketplaces are not liable for contributory trademark infringement if they act promptly to remove counterfeits upon notification. The court found that eBay’s anti-counterfeiting measures were sufficient, placing the burden on brand owners to police their own intellectual property.
As a result of the Tiffany decision, Congress introduced the SHOP SAFE Act (Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce Act) in 2020. The bipartisan bill aimed to curb the sale of fakes on online marketplaces by incentivizing platforms to better vet sellers and the products they’re offering. Facing opposition from online marketplaces like Walmart, Amazon, Etsy and eBay, it has failed to pass three times.
When my hair started thinning, I bought a designer hairbrush that I thought would help. Turns out I couldn’t part with it.
Reg P. Wydeven
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