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"The only thing necessary for the triumph of evil is for good men to do nothing"
Edmund Burke

[page 234]
Gucci invokes a post-sale confusion theory, which presumes that "the senior user's potential purchasers or ongoing customers might mistakenly associate the inferior quality work of the junior user with the senior user and, therefore, refuse to deal with the senior user in the future." Acxiom Corp. v. Axiom, 27 F.Supp.2d 478, 497 (D.Del.1998); see also Payless Shoesource v. Reebok International, 998 F.2d 985, 989 (Fed.Cir.1993) (describing post sale confusion as that which occurs when "a consumer observes someone wearing a pair of Payless accused shoes and believes that the shoes are Reebok's. As a consequence, the consumer may attribute any perceived inferior quality of Payless shoes to Reebok, thus damaging Reebok's reputation and image."). Yet, Gucci does not challenge the district court's conclusion that, given the quality of the counterfeit bags, third party observers would not perceive anything inferior about them. Accordingly, consumers would not attribute substandard merchandise to Gucci. Gucci does, however, claim that the district court gave short shrift to its concerns over ongoing confusion of Daffy's consumers who unknowingly possess a counterfeit "Gucci."

Although this position has some initial surface appeal, it does not withstand scrutiny. As we noted above, the district court considered the dangers of customer confusion. It gave "serious consideration to the fact that denying a recall will leave Daffy's customers under the continued misapprehension that they own a real Gucci product." Gucci IV at 11-12. However, the court was convinced that this did not justify a recall because the quality of the counterfeit bags and the relatively high price Daffy's customers were willing to pay for them undermined claims of a tarnished Gucci trademark.[4] Finally, in [page 235] the absence of sufficient evidence regarding the comparative durability of Daffy's bags and Gucci's bags, Gucci's conclusion that counterfeit bags would require greater maintenance rests upon pure speculation. Accordingly, the district court stated the following in explaining why the equities precluded ordering a recall:

The potential for damage to Daffy's goodwill with its customers is too obvious to be belabored. Daffy's marketing niche, distress sales of designer goods at significant discounts, would mean nothing if the consumer lacked confidence that the goods were what they purport to be. Daffy's also points out that a recall would require credit card records available only from the issuing banks.
Gucci IV at 10. Following a brief discussion of the exceptions to federal privacy laws which would allow for the release of customer information from banks, the court continued:
Notwithstanding, the affront to the privacy of Daffy's customers, extending the customer's ill-feeling engendered by the counterfeiting to the wholly unrelated credit card issuers, is unmistakable. This adds an additional counterweight in the balance of the hardships against ordering a recall.

Finally, there is the real possibility that consumers notified of this action will decline to come forward.[5] Gucci does not contend that the Court should compel Daffy's customers to surrender their handbags. An underpinning of Gucci's post-sale confusion argument is that Daffy's customers are posing as true Gucci wearers, free-riding on Gucci exclusivity at a Daffy's price. But this theory would hold regardless of whether the consumer herself knew that the handbag was a counterfeit. Thus, under Gucci's own construct of the consumer mind-set, a Daffy's customer informed of the counterfeiting might well decide that she is content with her bargain and decline to return the handbag. Lastly, with the passage of time there is a real possibility that the Daffy's handbags have been discarded, were given away as gifts, or are otherwise unavailable.

Gucci IV at 11. The court's factual conclusions are not clearly erroneous. Given the careful application of the correct equitable standard to the evidence before it, it is clear to us that the district court did not abuse its discretion in refusing to order a recall.[6]


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