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JUDGE BAERRobert Weigel (RW 0163)Howard S. Hogan (HH 7995)1)9 elY 6925Jennifer C. Halter (JH 7032)GIBSON, DUNN & CRUTCHER, LLP200 Park A venueNew York, New York 10166(212) 351-4000Attorneys for Plaintif Gucci America, Inc.UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK---- ----- --- -- --------------- - ---- ---- ------ ---- --- --- ------ ---- - Je-lE- (E !J r .o ""---.---· .AUG tl 5 009 'II'" 1) i'7 D',. "itU"' IJ. .; .'" ",).' ,g f l Jj' CAsi-UEnsGUCCI AMERICA, INC.Plaintiff,09 Civ.-against-FRONTLINE PROCESSING CORPORATION;WOODFOREST NATIONAL BANK; DURANGOMERCHANT SERVICES LLC d//a NATIONALBANKCARD SYSTEMS OF DURANGO; ABCCOMPANIES; and JOHN DOES,COMPLAINTDefendants.---- -- - - ----- - --- - --- --- ------ -------- --- -- -- ----- - ----- ---- - --- - JePlaintiff Gucci America, Inc. ("Gucci" or "Plaintiff'), by its attorneys, Gibson, Dunn &Crutcher, LLP, for its complaint against Defendants Frontline Processing Corporation;Woodforest National Bank; Durango Merchant Services LLC d//a National Bankcard Systemsof Durango; ABC Companies; and John Does (collectively, "Defendants"), alleges as follows:NATURE OF THE ACTION1. Consumers instantly recognize the various trademarks used to identify the lUJeuryitems merchandised or manufactured by or under licenses from Gucci (collectively, the "Gucci

Marks”). For decades, these famous, arbitrary, and fanciful Gucci Marks have receivedenormous exposure in the marketplace. Over the years, millions of consumers have beenexposed to the Gucci Marks through extensive advertising campaigns, in mainstream and fashionmagazines and other periodicals, as depicted on television and in motion pictures, on theInternet, and in other forms of unsolicited media coverage. As a result, the Gucci Marks areamong the most widely-recognized trademarks in the United States, as well as among the mostpopular with consumers, which adds enormous value to the authentic products that the bear theGucci Marks (“Gucci Products”).2.The Internet has provided an additional marketplace in which Gucci can, throughits authorized dealers, reach a wide range of consumers. However, the Internet has also openedthe door for unauthorized merchants to reach a similarly wide range of consumers in their effortsto sell counterfeit versions of the Gucci Products (the “Counterfeit Products”). To ensure thatconsumers make the association between the Counterfeit Products and the Gucci Products fromwhich they were copied, the sellers of such products not only copy the designs, patterns, andcolor schemes associated with Plaintiff, but also expressly identify the Counterfeit Products as“Gucci” products.3.Many, if not most, consumers, however, either cannot or will not purchaseCounterfeit Products over the Internet if they are not able to use credit or debit cards to effect thepurchase of Counterfeit Products. Alternative means of payment, such as cash, checks, moneyorders, bank wire transfer, or other forms of monetary transfers are not as convenient for manyconsumers, and they involve greater risk that the transaction will not be completed. As a result,many counterfeiters could not operate as a going concern were it not for the financial institutionsthat process credit card and debit card orders for them. Defendant Durango Merchant Services2

LLC asserts on its website, http://www.durango-direct.com, that “credit card processing analystsestimate 9 out of 10 people use a credit card for their online orders.” On information and belief,the fact that consumers are able to purchase Counterfeit Products by using a well-known creditor debit card informally communicates to consumers that the Counterfeit Products are authorizedby Gucci or are otherwise lawful.4.Defendants are in the business of providing credit card processing services forwebsites and other merchants selling counterfeit products, sometimes referred to a “replicaproducts.” Defendants actively solicit, directly or through agents, “high risk” merchants,including merchants selling counterfeit products. By processing counterfeiting transactions,Defendants not only supply the necessary marketplace for such transactions, they are fullpartners in these counterfeiting activities, and certainly profit by processing credit and debit cardtransactions for counterfeiters.5.On June 3, 2008, Plaintiff initiated litigation in this District against one suchunauthorized internet merchant who sold Counterfeit Products through the websitehttp://www.TheBagAddiction.com (“TheBagAddiction.com”). That action was captioned GucciAmerica, Inc. et al. v. Laurette Company, Inc. et al., 08 Civ. 5065 (LAK) (the “Laurette Case”).6.The named defendants in the Laurette Case – Laurette Company, Inc., JenniferKirk, and Patrick Kirk, all of whom were doing business as TheBagAddiction.com (collectively,the “Laurette Counterfeiters”) – consented to the entry of a judgment admitting to liability fortheir counterfeiting activities. On December 15, 2008, Judge Lewis Kaplan so-ordered a FinalOrder and Judgment on Consent in the Laurette Case in the amount of 5.2 million.7.Defendants provided the credit and debit card processing services that allowed theLaurette Counterfeiters to sell Counterfeit Products through their website. Defendants either3

knew that the sole purpose of the Laurette Counterfeiters’ business was to sell counterfeit goods,or were willfully blind to their counterfeiting activities, all while profiting from and participatingin such counterfeiting activities. The Defendants therefore became a knowing and indispensableparticipant and agent in the Laurette Counterfeiters’ operation.8.On information and belief, Defendants, with actual and/or constructive notice ofthe merchants’ illegal conduct, continue to process credit and debit card others for other sellersof Counterfeit Products. Through these activities, Defendants, who have no affiliation with thePlaintiff, have attempted to capitalize on the popularity of the Gucci Marks and have supportedthe manufacturing, marketing, and sale of products specifically designed to confuse consumersinto believing that they are buying authentic versions of the Gucci Products or to otherwisecompete directly with the Gucci Products.9.Defendants have participated in the sale of Counterfeit Products without thepermission, authorization, or approval of Gucci. Their conduct is likely to cause, and has caused,consumers mistakenly to believe that the Counterfeit Products sold and promoted withDefendants’ assistance either are authentic Gucci Products; are produced under a license,agreement, joint venture or other form of authorization by the Plaintiff; or are otherwiseendorsed by or affiliated with the Plaintiff, either at the point of sale or when consumers andpotential consumers see the Counterfeit Products in use.10.For these and other reasons, Defendants have caused, and unless enjoined, willcontinue to cause, Plaintiff irreparable harm and an incalculable loss of goodwill and damages.PARTIES11.Gucci is organized and exists under the laws of New York, with its principal placeof business located at 685 Fifth Avenue, New York, New York 10022. Gucci is the sole and4

exclusive distributor in the United States of items bearing the Gucci Marks (as defined herein) onleather goods, clothing, jewelry, accessories, home products, and related items (collectively,“Gucci Products”).12.Frontline Processing Corporation (“Frontline”) is a Nevada corporation, with abusiness address of 3701 Trakker Trail, Suite 1F, Bozeman, Montana 59718.13.Woodforest National Bank (“Woodforest”) is a bank that is organized and existsunder the laws of United States, with a business address of 25231 Grogan’s Mill Road, Suite175, The Woodlands, Texas 77380.14.Woodforest provides certain credit card processing services to internet merchantsthrough its affiliate, Merchants’ Choice Card Services Corporation (“MCCS”), with a businessaddress of 25231 Grogan’s Mill Road, 6th Floor, The Woodlands, Texas 77380, and satelliteoffices throughout the country, including New York State.15.Durango Merchant Services LLC d/b/a National Bankcard Systems of Durango(“Durango”) is a Wyoming corporation, with a business address of 2885 Main Avenue, Suite B105, Durango, Colorado 81301.16.Defendants Frontline, Woodforest and Durango are collectively referred to hereinas the “Defendants.”17.On information and belief, ABC Companies are companies engaged with theDefendants in the manufacture, distribution, sale, and advertisement of Counterfeit Products, butwhose identity and number are presently unknown.18.On information and belief, John Does are individuals who are consciouslyengaged with the Defendants in directing, controlling, ratifying, facilitating, or otherwise5

participating in the manufacture, distribution, sale, and advertisement of Counterfeit Products, orwho consciously and directly benefit financially from the manufacture, distribution, sale, andadvertisement of Counterfeit Products, but whose identity and number are presently unknown.JURISDICTION AND VENUE19.This is an action arising under the Trademark Act of 1946, 15 U.S.C. § 1051, etseq. (the “Lanham Act”) and under the laws of the State of New York.20.This Court has jurisdiction under 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331,1338(a) and 1338(b). This Court has supplemental jurisdiction over all other claims assertedherein under 28 U.S.C. § 1367(a).21.Personal jurisdiction is proper over all Defendants pursuant to N.Y.C.P.L.R.§ 302(a) because the unlawful conduct complained of herein caused and continues to causeinjury to Plaintiff within this District; because Defendants regularly conduct or solicit businesswithin this District, engage in other persistent courses of conduct and/or derive substantialrevenue from goods and/or services used or consumed within this District; and becauseDefendants regularly and systematically direct electronic activity into the State of New Yorkwith the manifested intent of engaging in business within this District.22.By way of example, at least the following facts make the exercise of personaljurisdiction in New York proper:(a) Defendants derive substantial revenue from interstate commerce in the form of therevenues that they receive in return for the services they provide to legitimate andillegitimate internet merchants. During the time the Laurette Counterfeiters utilizedthe Defendants’ services, over 15,000 orders for counterfeit goods were received bythe Laurette Counterfeiters. Payment for each of these orders, which totaled over 2,000,000, was processed or facilitated by one or more of the Defendants. Oninformation and belief, Defendants enjoyed a substantial financial benefit from theseillegal transactions.6