Redbubble share price: where next following $520k jury verdict?
The Redbubble share price fell on Friday after providing the market with an update on litigation proceedings brought against it in the US.
Redbubble (ASX: RBL) on Friday provided the market with an update on the progress of US litigation proceedings.
The news was mixed.
Redbubble said a US jury had found the company’s US subsidiary liable for $520,000 – payable to teen retailer Brandy Melville – relating to the allegation of intellectual property infringement.
Initated back in 2019, teen-focused retailer Brandy Melville launched a lawsuit against the ASX-listed Redbubble in relation to the claim that the company infringed the company's intellectual property through the creation of counterfeit goods.
At the time, The Fashion Law reported that Brandy Melville was seeking ‘compensatory damages of three times its actual damages or three times Redbubble’s profits, whichever is greater, together with its attorneys’ fees.’
In addition to that, the company was also reported to be vying for ‘statutory damages of no less than $2 million per registered mark.’
While the $520,000 awarded by the jury is a far-cry from that initial claim, Redbubble nonetheless said it would continue to defend itself against these allegations.
As the company explained in the Litigation Update to the ASX, dated 24 June, 'in US court proceedings, this is but one step in the overall litigation and number of possible steps remain before the claim is finally concluded.'
Redbubble added that the company 'believes that certain critical findings were not supported by the evidence offered at trial and will be asking the court for relief from the verdict on that basis. Redbubble remains confident in its position and will continue to vigorously pursue its defence of the claims.'
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Redbubble share price
Despite Redbubble’s confidence, the market reacted with uncertainty to the news: the stock was bid some 2% lower in the first-hour of trade, sitting around the $3.40 per share mark at the time of writing.
The last 12-months have been a rollercoaster for Redbubble – for both its shares and the company as a whole.
Overall, covid-19 was a boon for the company, as individuals increasingly turned to e-commerce options for both discretionary and non-discretionary purchases. While the severity of the pandemic has abated in 2021, the trends which saw consumers flock to e-commerce stores have mostly remained in place.
As part of Redbubble's third quarter trading update, released in April, the company reported continued top and bottom-line growth.
For the three months ending March 31, the company reported marketplace revenue of $456 million (+97%), gross profits of $184 million (+114%) and earnings (EBIT) of $41 million, up from a loss of $12 million during the prior corresponding period.
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