Is that a fake Chloe bag on your arm? If you purchased it online for $1,200 from Queen Bee of Beverly Hills, it just might be.
In 2005, Chloe discovered that Queen Bee, an online discount designer incorporated in Alabama, was hawking counterfeit copies of the French designer's $1,600 leather handbag.
Chloe's law firm, Kalow & Springut, placed an order online and had the purported Chloe bag shipped to an administrative assistant who lived in the Bronx, NY. The bag was later discovered to be counterfeit.
Chloe sued Queen Bee's principal, Simone Ubaldelli, and others, alleging the company sold at least 52 counterfeit products in New York. In its lawsuit, Chloe claimed Ubaldelli was responsible for getting the phony bags from a man named Guido.
The suit alleged Ubaldelli placed orders with Guido, received the bags at his office in Beverly Hills, and shipped them to Rebecca Rushing, a Queen Bee worker in Huntsville, AL, or to customers as Rushing directed.
Ubaldelli contends that Chloe cannot sue him in New York based on the one-time Internet-based sale of the fake designer purse.
But now a federal appeals court has ruled that a trademark infringement action can be brought against an out-of-state employee of the online retailer who sent a bogus handbag to a Bronx, N.Y., address from a website that offered merchandise to New York consumers.
Reversing a judgment of the District Court, the U.S. Court of Appeals for the 2nd Circuit held Aug. 5 that Ubaldelli's single act, combined with the fact that Queen Bee had made at least 50 sales of non-Chloe merchandise to New Yorkers through its site, gave rise to personal jurisdiction under the state's long-arm statute.
Queen Bee's "additional contacts show that the shipment of a counterfeit Chloe bag was not, as the District Court thought, a 'one-off transaction'…but rather a part of a larger business plan purposefully directed at New York consumers," Judge Peter W. Hall wrote in Chloe v. Queen Bee of Beverly Hills, LLC.
In addition, the appeals court found that it did not "offend due process to require Ubaldelli to answer in New York for the consumer confusion allegedly caused there through his purposeful direction of bags into the state."
On its website, Queen Bee of Beverly Hills says it sells designer brands such as Gucci, Prada and Hermes. There is no mention of Chloe.
It says the company has been in business since 2002 and is a leading online designer boutique "offering authentic European designer accessories."
"We are a discount boutique for authentic luxury designer handbags, luggage, wallets, sunglasses and accessories," the company says on its website. "We purchase what is available to us at the best prices possible from the designer groups or their authorized sellers directly. We do not purchase products from unauthorized sellers or third-party brokers."