San Diego - A seller of officially licensed National Football League merchandise filed a putative trademark infringement class action against Facebook Inc. on Monday over its alleged complicity in publishing online advertisements for fake NFL apparel, accessories and more.
Inkies Sports Inc., which does business as Krystal's NFL Shoppe, is seeking to represent a class of retailers and wholesalers of officially licensed NFL apparel who have been harmed in their business by purveyors of counterfeit goods advertised on websites like Facebook, according to its complaint in New Mexico federal court.
As of 2011, ads for counterfeit NFL merchandise started showing up in sponsored ads on Facebook with increasing frequency, offering jerseys and other items for cut-rate prices alongside "pictures of what appears to any reasonable person to be authentic, officially licensed NFL merchandise," the complaint says.
"There is no way for a Facebook user to determine from the pictures and the text which accompanies the counterfeiters' ads whether the merchandise is authentic or not," it says.
Inkies says it began paying for sponsored ads on Facebook in February, but quickly discovered that its own marketing efforts were being overshadowed by those of the counterfeiters.
"Ads for counterfeit goods are regularly displayed on Krystal's Facebook page, leading even loyal customers to question whether these ads are supported, or even sponsored, by Krystal's," the complaint says. "Krystal's has inadvertently been placed in the untenable position of actually lending credence to the counterfeit ads, by virtue of Facebook's display of those advertisements on Krystal's page."
Inkies has lodged multiple complaints with Facebook about the ads to no response, according to the company.
The economic impact of the fraudulent ads on Inkies and other class members will probably run into millions of dollars, given the cut-throat nature of the world of low price internet retail, Inkies asserts.
Once a consumer clicks on one of the counterfeiters' ads and places and order, the merchandise arrives postmarked from China, and it immediately becomes apparent that the merchandise is substandard, Inkies says. Since the Chinese government blocks access to Facebook, counterfeiters in China need an intermediary, Inkies claims, such as the advertising firm AdSage, which is also named as a defendant in the complaint.