Tommy Hilfiger Gains Ammo in Czech Fight Against Counterfeiters

The E.U.'s highest court says the clothing maker can force a market-hall tenant to stop renting sales areas to purveyors of fake goods.
By Renee Cordes ,

If that designer outfit on sale at a quaint European market hall this summer looks too good to be true, it probably is.

Now the licensing company associated with PVH's (PVH) - Get Report Tommy Hilfiger brand may have extra ammo to go after counterfeiters after a ruling from the European Union's highest court in Luxembourg.

The case stems from a suit brought by Tommy Hilfiger Licensing and other makers and distributors of branded products after discovering that fake versions of their products were regularly on sale in Prague, Czech Republic's market halls, frequented by locals and tourists alike in the so-called golden city.

They had asked the Czech courts to order market-hall tenant Delta Center to stop renting sales areas to counterfeiters, taking a cue from a L'Oreal (LRLCY) 2011 legal victory against eBay (EBAY) - Get Report over fake goods sold by others on the website.

The Tommy Hilfiger case is now pending before the Supreme Court of the Czech Republic, which had asked the General Court of the European Union whether it's possible to also order the operator of a physical marketplace to stop trademark infringements and to take measures to prevent further wrongdoing.

In Thursday's decision, judges said that is indeed allowed, while noting that any injunction issued by a court should be equitable, proportionate and not "excessively expensive."

The ruling relates only to the interpretation of E.U. law and does not apply to the actual dispute, still to be decided in the Czech Republic.

PVH shares closed up 2.27% in New York on Wednesday at $94.55, giving it a market value of around $7.6 billion. The stock is 18.17% lower than it was a year ago.

The New York-based company bought Tommy Hilfiger in 2010 for about $3 billion from buyout shop Apax Partners. Other clothing brands in PVH's wardrobe include Van Heusen, Calvin Klein, Izod, Arrow and Speedo, as well as Warner's and Olga intimate apparel brands.

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