Chinese Banks Aren’t on the Hook for Counterfeit Nikes

On January 22, the Southern District of New York’s Judge Colleen McMahon halted attempts torecover a portion of Nike’s $1.8 Billion judgment against counterfeiters from the Chinese banks theyused.

The fight began in 2013 when Nike sued a panoply of John Does selling counterfeit products on the internet. The case ended in a default judgement—typical for cases against unidentified counterfeiters—for $1.8 Billion. Judgments against counterfeiters such as this are often difficult to collect.

In 2017, Nike sold its right to collect the judgment to Next Investments LLC, who brought the claim with a novel theory in an attempt to collect $150 Million of the judgment. Next asked McMahon tohold six Chinese banks in contempt for failing to freeze the counterfeiters’ assets and reimburse Next. Next claimed “[t]he banks enabled the judgment debtors' illegal operations by allowing [them]to continue banking as usual.”

McMahon unequivocally declined to “upend years of precedent” dictating that the court orders requiring asset freezes do not apply to the Chinese banks.

This case is Nike, Inc. et al. v. Wu , 1:13-cv-08012, Dkt. 268 (S.D.N.Y Jan. 17, 2020)
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