In the 1980s, discount retailer Burlington Coat Factory — where all the cool kids got their two-toned jeans when I was in middle school — got snagged selling faux Fendi bags. As part of its settlement with the Italian luxury brand, the Factory agreed to never sell anything with the Fendi name again without the label’s permission. Unfortunately, someone forgot about that agreement and now Burlington has to pony up $10 million to Fendi.
For 15 years, Burlington Coat Factory observed the injunction. And then in 2002 products with the Fendi name started popping up again. In a costly case of memory lapse, the retailer’s lawyer, who had been involved in the original suit, only thought to make sure that the products being sold were authentic.
“The simple truth is that I had long forgotten them by 2002,” said the attorney about the details of the settlement.
And so the Factory continued to sell Fendi wares until 2006, when the label got wise and took them to court for violating the injunction. The court agreed in 2007 and ordered the retailer to pay $4.7 million.
And then yesterday, the court slapped on an additional $5.7 million for damages, attorneys’ fees, and costs for willful counterfeiting.
For its part, the Factory says it did nothing wrong and settled the matter just to be done with it:
Burlington Coat Factory agreed to settle the matter with Fendi so that current management will not have to spend time in appeals on matters that happened under prior management, many years ago.
Burlington Coat Factory will pay $10 million to settle counterfeit-goods fight with Fendi [Philadelphia Inquirer]