In brief
- Fendi, Loewe, Dior, Celine and LVMH have successfully pursued an online reseller, Rolo Fashion Limited, and its influencer founder over sales of so-called "superfake" counterfeit goods.
- The Intellectual Property Enterprise Court (IPEC) awarded the brands £213,000 in damages.
- The court confirmed that a low price alone does not excuse a counterfeiter from damages liability: if a customer chose the fake over the real thing because it was cheaper, that can still be a lost sale for which the original brand should be compensated.
Background
"Superfakes" are counterfeit goods made to a notably high standard, sometimes described in online counterfeiting circles as "1 to 1" or "mirror quality". Such products are typically sold at a steep discount to the authentic item but with a narrower quality gap between fake and genuine than a more typical counterfeit. A recent IPEC damages ruling, Fendi Italia Srl & Ors v Rolo Fashion Limited & Anor, brought by five claimants within the LVMH group against a fashion reseller and the influencer behind it, shows how the courts are approaching compensation claims in this space.
Damages inquiry
Liability for trade mark infringement had already been established by default judgment in January 2025 against Rolo Fashion Limited and its founder, Georgia Aldridge, over sales of counterfeit luxury goods bearing the claimants' trade marks. This ruling was a damages inquiry, concerned only with valuing that infringement.
The defendants' goods at issue were sold consistently at a fraction of the genuine price, on average around 15 per cent, and in some cases less than 5 per cent. The defence's central argument followed from that pricing gap: no rational buyer paying so little could have believed they were getting the genuine article, so there was no loss to the original brand to compensate.
The judge rejected that reasoning as a complete answer. He held that, when a customer knowingly chose one of the "superfake" counterfeits over the genuine article specifically because of the price, the brand had still lost a sale it would otherwise have made. Deception of the consumer is not a precondition for such loss. The distinction separates two of the functions served by trade marks: while trade marks play an important role in preventing consumer confusion, they also work as drivers of demand and value in their own right.
Quantifying the loss to the original brands
In assessing loss of profits, the brands proposed substitution rates of between 10 and 30 per cent, representing the proportion of counterfeit sales that would otherwise have been genuine sales made by the brands, built largely on an assumption that every member of a WhatsApp sales group used by the influencer as a sales channel had made at least one purchase. The judge rejected that assumption, though he was also unconvinced by the defendants' own figures, which understated sales volumes without adequate justification. The judge resolved the uncertainty against the defendants, on the basis that a party whose own disclosure had been incomplete should not benefit from the resulting gaps. Working from the defendants' bank records and settling on a 15 per cent substitution rate, he concluded that the brands had lost around 713 sales, worth roughly £200,000 in lost profit.
The user principle for trade marks
That £200,000 accounted only for sales that displaced a specific genuine sale. A substantial number of the counterfeit sales, around 4,039, did not fit that description: on the evidence, these were sales the brands would never have made in any event. The brands still sought compensation for those sales, on the basis of the "user principle".
In essence, the user principle asks what a reasonable licence fee would have been, had the infringer approached the brand and sought permission to use its mark legitimately. The concept was originally developed in patent law, where a defendant who infringes a patent without displacing a specific sale from the patent holder can still be made to pay a notional royalty, on the basis that they have used a valuable invention without paying for it. The principle does not always translate naturally to trade mark disputes, as a trade mark is not typically a piece of property licensed out for a fee. Case law has generally handled the user principle in trade mark cases with caution in light of these issues.
Notwithstanding that difficulty, the judge accepted that some compensation was owed for these sales, on the basis that they still took unfair advantage of the brands' reputation, even where counterfeit sales were not displacing a specific transaction from the original brands. The judge set a notional royalty of 3 per cent of the defendants' selling price, adding a further sum of around £13,000. Combined with the lost profits figure, the total award came to £213,000.
Additional claim for damage to reputation
However, the brands' claim for reputational damage was dismissed. There was no evidence that consumers held the brands in any way accountable for the quality of the counterfeits or for any negative experience of buying them; instead, the purchasers fully understood they were dealing with counterfeit sellers rather than the brands themselves. A general proposition that counterfeiting damages reputation is not, on its own, sufficient for compensation to be recovered; specific evidence of confusion or negative association will be required in practice.
Takeaways for brands
For rights holders, the decision sets a useful marker for damages in "superfake" litigation. A wide gap between the genuine and counterfeit price does not defeat a claim for lost profits. At the same time, the treatment of the user principle is a reminder that not every counterfeit sale converts neatly into damages, and that the further a claim moves from a straightforwardly lost sale, the more evidential ground the court will require before making an award.
How Mishcon de Reya can help
Our Intellectual Property Disputes team has extensive experience acting for luxury and premium brands in pursuing counterfeiters, securing injunctions and judgments, and recovering damages through lost-profits and other claims. For further information, please contact a member of the team.