Federal Court Finds E-Commerce Fulfiller May Have Violated BMW's Trademarks
A federal court in California on Jan. 25 denied an e-commerce fulfillment company’s bid for victory in a lawsuit alleging it violated BMW’s trademarks by importing counterfeit goods. More information is needed to determine whether Win.It America can be held liable for counterfeiting as an importer, or if it isn’t responsible because it merely facilitated sales and placed shipping labels on the alleged counterfeit products, the U.S. District Court for the Central District of California said in its ruling.
Win.It had asked the court to make a final ruling in its favor in the case, which was brought by BMW of North America. The company said it’s contracted by companies mostly based in China to help them sell their wares online on websites like eBay. The Chinese companies either ship their goods directly to Win.It America for warehousing, or have Win.It’s Chinese affiliate do it for them. Once the products are sold online, Win.It generates a shipping label and mails them from its warehouse to the purchaser.
Trademark infringement requires that the marks be “used in commerce.” Courts have ruled that the “use in commerce” requirement is satisfied by the importation and transportation of counterfeit goods, even where the goods were never in the importer’s possession. On the other hand, there’s a string of cases in which companies involved in e-commerce have been found not to use the relevant trademarks in commerce when they only facilitate or fulfill orders. Win.It contended its operations fell in the latter category.
But BMW North America had an expert witness -- a licensed customs broker and sourcing expert -- that questioned Win.It’s claims. For the goods to get to Win.It’s warehouse, they must have been formally imported and released by CBP, Rosemary Coates told the court. Win.It would be listed as the importer of record and ultimate consignee, even if a third-party carrier was responsible for physically moving the goods. That’s confirmed by a seizure notice received by Win.It at its warehouse, she said. As the importer of record, Win.It was responsible for confirming the goods did not violate anyone’s intellectual property rights, Coates said.
The court found Coates’ testimony was at least “circumstantial evidence” that Win.It imported the goods and therefore used them in commerce, allowing the case to proceed for further discussion of the issue. It also found Win.It may be guilty of “contributory” trademark infringement, based on BMW North America’s disputed claim that Win.It continued to ship goods after it found out they violated BMW’s trademarks.
(BMW of North America v. Win.It America, C.D. Cal. 2:17-08826, dated 01/25/19, Judge Gutierrez)
Email ITTNews@warren-news.com for a copy of the decision.