A federal jury in Califormia handed down a verdict against 2 web hosting companies (Akanoc Solutions Inc., Managed Solutions Group Inc.,) holding the owners liable for the copyright and trademark infringement of one of it’s customers selling counterfit Louis Vuitton goods. Andy Coombs, Louis Vuitton’s counsel, said in a statement. “It represents a positive contribution to existing case law and marks the first time statutory damages have been awarded against those found contributorily liable for trademark infringement.”
This is a precedent setting case which may cause Web Hosting Providers to start enforcing more stringent acceptable use policies for customers.
Trademark is a tricky legal business. Trademark owners must fight to protect its trademark when it becomes aware of a trademark infringement, or else there may be a possibility to lose the effectiveness of the trademark itself.
For example, if a business owner is aware of an infringement and waits several years and then targets another account of infringement, the defense can argue that they haven’t gone after other infringements. In the past Microsoft has been chastised for going after Mike Rowe’s MikeRoweSoft.com website. However, they are legally in a bind, and MUST go after an infringement whenever it becomes aware of it, however badly they may have handled that particular circumstance.
In this new ruling however, Louis Vuitton is not just going after the infringer, but also those that may have contributed unknowingly to the infringement. This may make things difficult for existing trademark owners who will likely need to consider contributors to trademark infringement as part of the legal proceedings. Not to do so, can be problemmatic for them in presenting future cases.
Should a phone company be sued if it doesn’t start policing the companies that use its phone lines for criminal purposes? What about Internet Service providers who provide service that hackers may use? This case opens up alot of questions that should make any company that provides a service to take pause and look at the customers it serves. Can a bad client be a bigger risk than you realize?
