If you find a great price on a designer handbag through a discount website, be wary – rather than saving a few hundred dollars on the real thing, you might be buying a knockoff for a lot more than it’s worth. At least that was the case with Chloé bags sold by Queen Bee of Beverly Hills on its website, www.queenbeebeverlyhills.com.

After discovering that the Alabama-based “discount designer” company was selling counterfeits of its designs in 2005, Chloé filed suit in the United States District Court for the Southern District of New York against the company and its principal, Simone Ubaldelli (the company has since declared bankruptcy). The complaint alleged violations of sections 32(1) and 43(a) of the federal Trademark Act of 1946, along with common law trademark infringement claims.

The district court granted Ubaldelli’s motion to dismiss for lack of personal jurisdiction in 2008. Although the designer presented evidence of the shipment of at least one of the fake handbags to New York as well as at least fifty-two sales of non-Chloé merchandise to various New York customers, the district court refused to exercise jurisdiction because Ubaldelli did not specifically target New York, and so the sales “were not sufficiently related to Chloé’s claims for trademark infringement.

However, the Second Circuit reversed the district court on August 5. The court held that “Ubaldelli’s single act of shipping an item into New York combined with the substantial business activity of Queen Bee … involving New York, give rise to personal jurisdiction,” under the Due Process Clause and the New York long-arm statute. By selling bags and other products in New York, Ubaldelli “purposely availed himself” of the forum state, and personal jurisdiction is therefore appropriate.

So Chloé has won the right to proceed in its action against Ubaldelli. And although it remains to be seen what the outcome of this case will eventually be, this decision, at the very least, should make would-be trademark infringers think twice about selling their wares over the internet from now on.

Emily Larish

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