Shine International then “contracted with and paid” companies to transport the goods (those companies are not named as defendants) and designated New York-based Hana International Logistics as the receiving agent of the goods since “Shine has no U.S.-based operations.” Further perpetuating the scheme, Hana – just like its fellow defendants – allegedly issued “fraudulent and facially inadequate” documentation in connection with the shipments, ultimately enabling three of them to “make it past U.S. Customs,” and thereafter, be “delivered somewhere in the United States.”
All the while, New York-based B&H Customs Services – which, as the customs broker enlisted by Hana – was responsible for filing documentation of its own, including an Import Security Filing, for each of the shipments. In the process of doing so, Nike claims that B&H “was put on actual notice of discrepancies in the documents it had received and utilized to file entry in the name of Artiva,” including inaccuracies in connection with the importer of record, among other things, but failed to exercise the required level of “due diligence” to verify the validity of the documentation provided to it by the other defendants.
“B&H was also required to” – but failed to – “use reasonable care in determining the nature of the goods covered by the [the documentation it filed with U.S. Customs] to determine, among other things, whether the goods bore the trademarks of any U.S. company before filing” that documentation. “Instead,” Nike claims, “B&H looked to get paid.”
Ultimately, over the nearly one-year period between July 2017 and September 2018, the defendants were able to successfully import three containers of thousands of counterfeit Nike sneakers into the U.S. But while “the first three containers [shipped out of ports in China] passed through U.S. Customs undetected,” the fourth container, for which “the transportation records stated that it was carrying lamps,” was seized by U.S. Customs.
In early February 2019, Nike’s North America Brand Protection head received a letter from U.S. Customs alerting him to the fact that on November 29, 2018, the government agency had seized articles “which bear marks hat constitute counterfeit copies” of Nike’s marks at the Port of Newark. The appraised value of the sneakers, according to Customs? $977,414.00.
Among the sneakers seized by Customs were ones from Virgil Abloh’s coveted collaboration with the brand to similarly in-demand Air Max 98 models. Also in the mix were exact replicas of Nike’s Jordan 11, albeit without any Nike branding. The company asserts in its suit that this is a common move, as “counterfeiters often import footwear that copies [its] Jordan 11 trade dress without any identifying trademarks, and then after those products clear U.S. Customs, they attach counterfeit trademarks.”
“The commingling of counterfeit Nike sneakers bearing the Nike trademarks with those bearing the Jordan 11 trade dress but no identifying marks shows that the defendants were determined to continue their counterfeiting operations within the U.S.,” Nike argues.
After linking the defendants to at least three shipments that predated the one that was seized in November 2019, Nike filed suit, setting forth a handful of counterfeiting and trademark infringement-centric claims against all of the defendants, arguing, among other things that are “responsible for the importation of the counterfeit Nike sneakers because they filed, or assisted in the filing of, the entry documentation for the four shipments.” More than that, they “willfully disregarded their duties as a customs broker, overseas transportation intermediary, and/or non-vessel operating common carrier in facilitating the transportation and importation of the four shipments, which consisted of the counterfeit Nike sneakers.”
With the foregoing in mind, Nike is seeking injunctive relief to permanently bar the defendants and “all those in active concert or participation with them” from importing or assisting in the importation counterfeit or otherwise infringing Nike products. The sportswear titan also claims that it is entitled to “damages for all of the defendants’ profits derived from their past unlawful conduct, trebled,” plus “reasonable attorney fees … given the defendants’ willful and bad faith acts.”
*The case is Nike, Inc. v. B&H Customs Services, Inc. et al, 1:20-cv-01214 (SDNY).
