FOR IMMEDIATE RELEASE
February 7, 2017
Contact: Mark D. Sweet, Managing Partner
James B. Monroe, Chair
Finnegan Client LG Wins Counterfeit Headset Case
WASHINGTON, DC—On February 6, 2017, a district court awarded more than $168 million in damages to Finnegan client LG Electronics MobileComm USA in a counterfeiting case against nearly 20 companies accused of producing and selling counterfeit and knock-off LG headsets.
LG’s TONE Bluetooth headsets are the product category leader, having created the neckband Bluetooth headsets product space with its highly unique and distinctive looking design. To protect unsuspecting consumers who may unknowingly buy what they think is the latest LG TONE Bluetooth stereo headset, LG sued numerous U.S. and foreign companies selling counterfeit versions of the product online. In May 2016, Finnegan obtained a temporary restraining order (TRO) against the named counterfeiters enjoining them from manufacturing, distributing, and selling knock-offs of the popular headsets. As part of the TRO and subsequent preliminary injunction order, the court granted LG’s request to freeze the defendants’ financial accounts in order to preserve LG’s ability to collect any final monetary judgment.
Although the Lanham Act gives courts broad discretion in determining the amount of statutory damages—allowing damages of anywhere from $200,000-$2,000,000 per mark if the counterfeiting is found to be willful—the court decided to award the statutory maximum of $2,000,000 per mark “given the strength and recognition of the LG brand in electronics.” The court also noted the large number of defaulting defendants, which underscored "the serious counterfeiting problem LG faces."
With the final judgment having issued, LG will be able to recover the ill-gotten proceeds previously frozen by the court.
The case is LG Electronics MobileComm U.S.A., Inc. v. Xiaowen, 3:16-cv-01162, S.D. Cal.
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