Gucci's Attempt to Extend Trademark Infringement Liability to Credit Card Merchant Service Providers Survives Motion to Dismiss

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Judge Harold Baer in Gucci America, Inc. v. Frontline Processing Corp., No. 09 Civ. 6925 (HB), 2010 WL 2541367 (S.D.N.Y. June 23, 2010), ruled that Gucci had sufficiently alleged facts to defeat a motion to dismiss in a suit brought against three defendant credit card merchant service providers for trademark infringement. The litigation stems out of an earlier action, Gucci America, Inc. v. Laurette Co., Inc., No. 08 Civ. 5065 (LAK) (S.D.N.Y. June 3, 2008), in which Gucci successfully sued defendant Laurette for operating a website, "TheBagAddiction.com," which sold counterfeit Gucci designs. Gucci later brought suit against three credit card merchant companies, Durango Merchant Services (a Wyoming corporation), Frontline Processing Corporation (a Nevada corporation principally operating in Montana), and Woodforest National Bank (a Texas corporation), alleging that those companies aided and assisted Laurette and other similar website operators in infringing Gucci's marks. According to the allegations set forth in Gucci's complaint, Durango established credit card processing services for web companies like Woodforest and Frontline that sold counterfeit products. Gucci brought trademark infringement and counterfeit claims against Laurette based upon website sales of counterfeit Gucci products.

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