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Sellers of phony U of Arkansas merchandise told to pay up

August 30, 2018

LITTLE ROCK, Ark. (AP) — A federal judge has ordered more than 40 foreign online merchants to each pay $200,000 in damages in a University of Arkansas System lawsuit alleging that they were selling counterfeit Razorback merchandise.

Judge Gary Feinerman signed an order Wednesday listing 43 defaulting defendants who didn’t respond to the lawsuit or appear “in any way,” the Arkansas Democrat-Gazette reported. The defendants are liable for “willful federal trademark infringement” that caused $8.6 million in damages, according to the order.

The university filed the lawsuit in June, identifying merchants by their online presence. Many of the 53 merchants named were selling items through large online marketplace websites. The lawsuit said the defendants are based outside of the U.S.

Feinerman ruled that the companies must also release any money held in e-commerce accounts within 10 days of receiving his order. Such accounts include Amazon, WISH and PayPal. The order requires each of the listed sellers to permanently stop using their e-commerce accounts associated with the trademark infringement.

The ruling “was a major victory for the university’s licensing program and sends a strong message to other online piracy sites that put the university’s brand and reputation at risk,” said system spokesman Nate Hinkel.

The legal strategy to seek assets held by accounts like PayPal is common when big business entities go after merchants selling unauthorized products, said David Ludwig, a trademark attorney not involved with the case.

“This is indicative of colleges and universities becoming more like corporations in their brand enforcement,” he said.

Ludwig said there’s no way of knowing what amount might actually be in the e-commerce accounts to be turned over to the university. Merchants could have emptied out funds on a weekly basis, he said.

“It just depends on what happens to be hanging in those particular accounts,” Ludwig said.

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Information from: Arkansas Democrat-Gazette, http://www.arkansasonline.com

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