12
Jan/04

Third Circuit on Innocence


Third Circuit decision:  Established retail chain has opportunity to purchase huge shipment of GUCCI bags from a reputable distributor.  However, something made the retailer suspicious whether the bags wer genuine (the distributor told the retailer that the bags were diverted goods, that is to say, grey goods) so it investigated in two ways.  Without identifying why, an employee shows a bag to a clerk in a Gucci outlet, who thinks that the bag is genuine.  Second, it submitted a damaged bag to Gucci’s repair service, which repaired the bag without comment.  Confident now in their authenticity, the retailer puts the bags on sale.  The bags turn out to be counterfeit.

In the resulting suit by Gucci, the retailer is treated as an innocent infringer.  Question: if it is in fact an innocent infringer, why did it use covert means of determining authenticity?  Why did it not approach a Gucci employee who was specifically trained to identify counterfeits?  Was it reasonable in believing that showing the bag to a clerk in a outlet store was a reliable method of determining authenticity?

Gucci v. Daffy’s, No. 02-4046 (Third Circuit December 29, 2003).

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