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Gucci America, Inc. v. Frontline Processing Corp.

721 F. Supp. 2d 228 (2010)

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Gucci America, Inc. v. Frontline Processing Corp.

United States District Court for the Southern District of New York

721 F. Supp. 2d 228 (2010)

Facts

A manufacturer of quality merchandise, Gucci America, Inc. (Gucci) (plaintiff) owned a variety of trademarks in its products and designs. Gucci exclusively distributed items labeled with Gucci Marks, including leather goods, jewelry, home products, and clothing, throughout the United States. The Gucci Marks encompassed the Gucci name and family crest, the noninterlocking GG monogram, the repeating GG design, and other marks. The Laurette Company, Inc. (Laurette) was an online seller of counterfeit Gucci products. Three credit-card-processing companies assisted Laurette and other website operators to sell counterfeit Gucci products: Frontline Processing Corporation (Frontline), Durango Merchant Services (Durango), and Woodforest National Bank (Woodforest) (defendants). Durango arranged for website companies selling counterfeit Gucci products to establish credit-card-processing services with Frontline and Woodforest. Durango advertised as a specialist in credit-card-processing services for high-risk merchant accounts selling replica products. Gucci originally brought suit against Laurette, which admitted to selling counterfeit Gucci products to users across the country through its website. Gucci brought a second suit against Frontline, Durango, and Woodforest to prevent further infringement of its trademarks under the Lanham Act. Gucci argued that these companies could be held indirectly accountable through contributory liability for the directly infringing sales of counterfeit products by Laurette and the other websites using their financial services. Frontline, Durango, and Woodforest moved to dismiss the case as failing to state a claim.

Rule of Law

Issue

Holding and Reasoning (Baer, J.)

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