As the New York Knicks begin their quest to repeat as NBA champions, the team and Madison Square Garden Sports are suing individuals and businesses in China and elsewhere that allegedly sell counterfeit Knicks merchandise to Americans.
In a complaint drafted by Justin Gaudio and other attorneys from Greer, Burns & Crain, the Knicks last Friday sued defendants who allegedly hide their “true identities” while operating within an “infringement network.” The complaint was filed in federal court in Illinois and was assigned to U.S. District Judge April M. Perry.
The Knicks join other sports businesses, including the NBA and NASCAR, in using federal court to try to stop the flow of counterfeit goods that allegedly infringe trademarks. These sports businesses have alleged that counterfeit and unauthorized goods are sold through Temu, AliExpress, and similar online marketplaces.
The NBA, NFL, NHL and NFL also formed a joint entity, the Coalition to Advance the Protection of Sports Logos, in 1992 to coordinate on efforts to combat counterfeiting and ensure fans are buying authentic goods.
The Knicks’ complaint describes the considerable marketability of the Knicks’ “iconic” brand, particularly because the team is defending its championship title and plays in the world’s largest media market. It also asserts that Knicks merchandise “has become increasingly popular” in the aftermath of the championship, “spurring record-breaking sales among official retailers.”
Over the years, the Knicks have acquired numerous trademarks from the U.S. Patent and Trademark Office, including trademarks for different versions of the team’s logo. Registration offers a bevy of legal advantages, including presumption of ownership, the exclusive right to use the mark and anti-counterfeit protections from U.S. Customs and Border Protection (CBP).
The Knicks have licensing agreements covering the sale of T-shirts, jerseys, sweatshirts, hats, accessories and other merchandise sold at Knicks games, through websites—including NBA.com—and by other authorized dealers. Through licensing deals, the Knicks are not only paid royalties but can also set standards for quality and usage, including standards concerning typography, scripts, designs and workmanship that counterfeiters lack.
One limitation of obtaining court orders against counterfeiters is the difficulty of enforcing them in foreign jurisdictions. Counterfeiters also “routinely” use “false or inaccurate names and addresses” when registering domain names and operating through online platforms. These and other limitations have led to what is sometimes called the “whack-a-mole” problem, in which infringers jump from one false identity to another, making effective, lasting enforcement difficult if not nearly impossible.
For relief, the Knicks seek a permanent injunction blocking the defendants from using Knicks trademarks and other intellectual property in connection with the unlicensed sale of goods. They also seek a court order instructing online marketplace platforms not to advertise the counterfeit goods, as well as unspecified monetary damages.
The sale of counterfeit goods is a continuing problem for the United States.
As pointed out by the Knicks, the CBP in 2021 made more than 27,000 seizures of goods that violated intellectual-property rights, totaling over $3.3 billion—up from $2.0 billion in 2020. Most government seizures are made through mail and express-courier services, rather than through shipping containers, and many of the shipments originate in China and Hong Kong.
According to brand-protection company Counterfake, counterfeit and pirated goods account for about $467 billion in global trade, a data point “representing 2.3% of worldwide trade activity.”