2nd Circ. Keeps $5M Sanction In Counterfeit Headphones Suit

Law360, New York (January 25, 2018, 5:48 PM EST) -- The Second Circuit on Thursday affirmed a decision imposing $5 million in sanctions against Hong Kong-based ePro E-Commerce Ltd. in a trademark suit filed by sound equipment maker Klipsch that accused the company of selling counterfeit versions of its headphones, finding the district court judge did not err when he concluded that ePro had engaged in spoliation.

The three-judge panel agreed that because ePro's "persistent discovery misconduct" — such as its repeated failure to place an adequate litigation hold or promptly disclose documents — resulted in "significant" permanently unrecoverable files, it rejected ePro's argument on interlocutory appeal that the $2.7 million...

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