Louis Vuitton S.A. v. Lee

Seeking to protect its registered trademarks from infringement through the sale of counterfeit merchandise, Louis Vuitton S.A. (Louis Vuitton) (plaintiff) dispatched undercover investigators posed as customers to purchase alleged counterfeit merchandise for examination. Mr. and Mrs. Lee (defendants), owners of K-Econo Merchandise in Chicago, were caught in this infringement hunt in 1985 when such an investigator purchased a Louis Vuitton camera case that was later determined to be counterfeit. Louis Vuitton filed suit for trademark infringement based on these findings, seeking treble the Lee’s profits from the sale of counterfeit merchandise and a permanent injunction. Shortly thereafter, armed with a district court ex parte order, Louis Vuitton executed a raid on K-Econo Merchandise and seized three additional counterfeit Louis Vuitton merchandise. During her deposition, Mrs. Lee stated that customers had told her before the raid that her Louis Vuitton merchandise was counterfeit. During trial, however, Mrs. Lee claimed that she had not known until the raid that the merchandise was counterfeit. The district court issued a permanent injunction to stop the Lees from further infringing Louis Vuitton’s trademarks but otherwise denied its request for treble damages on the ground that Mr. and Mrs. Lee did not knowingly and willfully sell counterfeit products. Louis Vuitton appealed.