Credit Card Processing Companies Sued for Coeitinunterfg
If credit card processing companies process transactions for items that infringe on trademarks, can they be held liable? Thanks to Gucci, this is a question that will have a chance to be answered in court. August 5, 2009 Gucci America Inc., a subsidiary of Paris based PPR SA, filed a federal lawsuit against several credit card processing companies in New York Southern District Court for being party to trademark infringement. This action stems out of a 2008 lawsuit against Laurette Company, Inc. for operating a website which sold counterfeit Gucci merchandise. This latest action against Frontline Processing Corporation, Woodforest National Bank, Durango Merchant Services LLC, ABC Companies, and John Does was brought because these companies, as Gucci America said, “not only supply the necessary marketplace for such transactions, they are full partners in those counterfeiting activities.”
This should give pause to credit card processing companies that might turn a blind eye to the kind of business their clients are operating. The 2008 suit against Laurette was brought because the website they operated, TheBagAddiction.com, which sold counterfeit Gucci bags, contributed to trademark infringement according to Gucci’s attorney Robert Weigel. As a result, Laurette was ordered to pay $5.2 million and their website is no longer doing business. All of the companies mentioned in this latest lawsuit had worked with Laurette. While it can be argued that these credit card processing companies profited from the sale of the counterfeit merchandise, it remains to be seen of Gucci can provide convincing evidence that these companies knew that the merchandise was illegitimate. This might be a bit if a stretch for Gucci in its battle against the counterfeiting of its products, but if they are successful, it could lead to opening credit card processing companies to a whole new world of liability exposure.
For more details: http://www.thetransactiongroup.net
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