Another landmark legal case was decided last week – this time, a jury awarded hefty damages against a group of Internet service providers (ISPs) for contributory trademark infringement.  Louis Vuitton Malletier, S.A., sued Akanoc Solutions, Inc. and Managed Solutions Group, Inc., two ISPs, as well as Steven Chen, who controls both Akanoc and Managed Solutions Group.  The luxury luggage and handbag manufacturer charged the ISPs with contributory trademark infringement under the Federal Trademark Act after discovering that the ISPs’ customers (and their customers’ customers) operated Web sites selling counterfeit goods bearing Louis Vuitton trademarks.  Louis Vuitton had sent several letters to the ISPs requesting that they remove the sites, which the court ruled was enough evidence to prove that the defendants knew of the infringement.  The jury found that the ISPs committed contributory infringement because they knew, or should have known, that their customers were using the defendants’ services to infringe Louis Vuitton’s marks.  In addition, the jury found the infringement to be willful and ordered the defendants to pay Louis Vuitton $31.5 million in damages.

This case marks the first time a court has awarded statutory damages against a party for contributory trademark infringement.  Although the Federal Trademark Act does include a provision that allows a plaintiff to recover damages from the party that enabled the infringement, never before has a jury actually awarded damages in this type of case.  This decision could have serious ramifications for ISPs in the future: currently, the law is unclear as to whether ISPs are liable when their users commit trademark or copyright infringement. As such, this case will serve as a powerful precedent and demonstrates that courts will not accept the argument that ISPs are unaware of the activities of users on their networks.

Louis Vuitton’s actions also raise the question of whom a firm can pursue legal action against when infringements occur.  Specifically, in the case of cybersquatting, could domain name registrars be held liable for contributory trademark infringement?

Josh Bourne

Managing Partner at FairWinds Partners
A Managing Partner for the business, Josh draws on his experience with brands and blogs on business solutions for the domain name space.
Josh Bourne
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