WD Texas (Nov 2011): Judge dismisses defendant flea market’s motion to dismiss LV’s contributory trademark complaint on the pleadings (top document). Footnote 3 addressing policing burden: The argument that defendants are ‘impermissibly burdened’ is ‘unpersuasive.’ “Avoidance of contributory infringement does not require a flea-market owner to take precautions against the sale of counterfeit goods or to seek out violations in the market . . . The only duty imposed is to avoid providing space to counterfeiters who the owner knows or has reason to know are selling counterfeit goods.”
Court’s instructions to jury in trial two months later (Jan 12 2011) (bottom doc). Jury found for LV.
A jury has found a search engine optimization firm, Bright Builders, to be liable for ‘building and hosting’ a customer’s site that sold counterfeit goods. A judge has ordered that it pay $750k in damages. The case isRoger Cleveland Golf Company v. Prnce, Shelley and Bright Builders Inc., 2:09-cv-02119-MBS (D South Carolina March 14 2011).
Important Decision: Gucci Pleads Good Contributory Infringement Action Against Credit-Card Processors
This is an important SDNY decision. Gucci sued companies that process credit card transactions for ‘replica’ websites. On 12(B)(6) motion, Court holds:
Gucci can proceed with its action against Defendants if it can show that they (1) intentionally induced the website to infringe through the sale of counterfeit goods or (2) knowingly supplied services to websites and had sufficient control over infringing activity to merit liability.
Gucci fails to allege inducement but sufficiently pleads ‘knowledge’ or ‘willful blindness.’ Interesting fact: one credit card processor conducted reviews of ‘charge-backs’, instances where the customer demands a refund. Some customers demanded refunds because the goods were counterfeit (see page 19 of decision).
The idea of going against credit card processors has been previously explored under California state unfair competition law.
Decision Gucci v Frontline (Credit Card)
Assume Lockheed owns an incontestable registration for SKUNKWORKS. Lockheed sends cease and desist letter to registry alleging that SKUNKWORKS.COM is being used to infringe its trademark. Registry refuses to de-activate site. Lockheed sues in 2d Circuit and not 9th, so don’t discuss Lockheed v NSI (the SKUNKWORKS case).
2d Circuit Affirms Dismissal of Infringement Cause, Remands False Advertisement, Against eBay in Tiffany case (Text of Decision)
District Court dismissal of direct and contributory infringement by eBay affirmed, dismissal of false advertising vacated and remanded back.
Very very quick summary after one quick reading: eBay has ‘general knowledge’ that for its Tiffany listings, some unknown percentage was counterfeit (not 95% but not zero). However, it doesn’t specifically know whether any particular listing is counterfeit, until Tiffany tells it so. That’s the key to the holding. Because the contributory infringement language of the Supreme Court Inwood case requires that the defendant had knowledge that ONE (emphasis by court) third party is continuing to infringe, eBay didn’t have the requisite knowledge that any ONE particular customer was infringing (until Tiffany brought it to eBay’s attention, at which point eBay took down the listing). Thus Ebay didn’t allow infringements to continue after it had actual knowledge of any particular infringement. Also, the court declined to hold that the ‘general’ knowledge that eBay had that some (or even most) listings were counterfeit, rose to the ‘have reason to know’ prong of the Inwood test.
However, with regard to the false advertising count, to the extent that eBay advertised general Tiffany listings, to the extent that eBay advertised that TIFFANY jewelry could be purchased on eBay, the implication was that ALL such jewelry was genuine, which eBay knew not to be true. So the false advertising count will be remanded to the district court to reconsider.
UPDATE: good discussion of 43(a) issue, especially wrt problems of proof via 43(B)log.
Tiffay v Ebay 2d Cir
Kimberly Isbel: “It’s Time to Update the Lanham Act for the 21st Century” “(Discussion of ‘innocent infringer’ safe harbor in Section 32):
When applied to the online activities of companies like Twitter, Google and the Internet Archive, the inadequacy of the remedy-limiting language used in Section 32(2) readily becomes apparent.
IPKat takes a first look at the EBay / L’Oreal decision in the UK. The Court will hear argument on the formuation of questions to the ECJ.
Cartier files compaint over ‘fake watch’ iPhone app, withdraws suit later that day after Apple takes down app.
Compaint Cartier Apple