Web Hosts Hit With $32 Million Judgment For Content 202
mikesd81 tips news that a California jury has found two web hosting companies liable for "contributing to trademark and copyright infringement" after hosting web sites that sold counterfeit Louis Vuitton items. Both companies are owned by the same man, Steven Chen, and are being ordered to pay $32 million in fines. A similar judgment for $61 million went against eBay last year for facilitating the sale of counterfeit Louis Vuitton merchandise.
"The US District Court for the Northern District of California is expected to issue a permanent injunction banning the internet service providers from hosting Web sites that selling fake Louis Vuitton goods in the future, the company said. Attorneys for the luxury goods maker said in a statement that the case is the first successful application on the internet of the theory of contributory liability for trademark infringement. Under this theory, companies that know, or should know, that they are enabling illegal activities have an obligation to remedy the situation. Entities that fail to do so, as Louis Vuitton alleged in this case, can be held legally responsible for contributing to the illegal activities."
Guilty by association (Score:1, Interesting)
So when a landlord rents out a property and it's turned into a drug farm, he too should be jailed when they get caught ?
Or is that just making the whole thing too simple.
Re:Eh not really a free speech issue (Score:2, Interesting)
The salient point : (Score:5, Interesting)
If true, then they got it coming their way. You do not willingly ignore that one of your customer do illegal activity when it has been reported to you.In addition
Under existing precedent (outside of the Internet realm) a plaintiff seeking to prove contributory trademark infringement needs to prove that a defendant intentionally and knowingly enabled another to infringe a trademark, Johnson said. In this case, the jury appears to have been convinced by the evidence presented by Louis Vuitton that the Web hosting companies had clear knowledge of the infringing activity, he said.
Re:Not the best write-up (Score:5, Interesting)
So, it's the ISP:s responsibility to decide what is or isn't illegal activity? Shouldn't some court or something first decide whether Lois Vuitton has merit to their claims?
(I'm not saying it is so. I'm asking.)
Re:Eh not really a free speech issue (Score:4, Interesting)
Hosts are under no obligation to actively investigate their content. In this case the hosts were informed about illegal content and took no action against it. This wasn't a case of them not spotting 1 website out of 1000 doing illegal activity, it was a case of them knowing about the activity but not caring.
Excellent. Now I can sue Qwest and AT&T when telemarketers call me to sell fradulent items. After all, they are also "aiding" in this criminal enterprise...
What's good for the goose is good for the gander.
Re:Guilty by association (Score:3, Interesting)
Re:Eh not really a free speech issue (Score:4, Interesting)
No one suggested the host had to take-down the site, the host probably should have notified the IP holder and worked with authorities. It's not the host's responsibility to kick his leasees out of his office space, in fact the host has a legal obligation to not interfere with a leasee's space unless invited in during the terms of the lease. The IP holder has no authority to demand a takedown, only a judge does, but you can cooperate to get to the bottom of the issue instead of being an antisocial asshat that ignores everyone. A simple call a lawyer "I've been notified that a website I host is dealing in illegal items and I'm calling to cooperate with any investigations currently underway or that you will initiate." Not so hard.
If you receive a takedown notice, take it to a lawyer and say you want to cooperate but need to validate the notice, have your lawyer contact the author of the takedown to say you're cooperating but need more information such as patent information or copyright filings. A takedown notice is not a judicial document, you need a judge for that, and if you initiate the judicial process through cooperation no judge will fine you excessively if you unwittingly facilitated the activity. Don't get so paranoid. It's like the internet is filled with twelve year-olds that put MP3s up on their Geocities page to look like a 'cool' technogangsta and don't know what their rights are or how to be a good responsible citizen.
Re:We need a "DMCA safe harbor" for trademarks etc (Score:2, Interesting)
Re:The Pirate Bay case, only worse. (Score:2, Interesting)
Re:Eh not really a free speech issue (Score:3, Interesting)
NO. They are required to REPORT certain transactions that may or may not be evidence of fraud. Then the courts tell them if they should freeze the account. They do not get nailed to the wall as accomplices or co-conspirators and they are not required to decide on their own initiative to freeze an account.
Re:The salient point : (Score:3, Interesting)
Look, it's simple enough. Louis Vuitton has big pockets and can sue you for millions of dollars for trademark infringement. The secondhand store probably doesn't have enough to pay a lawyer, and at worst, they can sue you for thousands of dollars for breach of contract if you cut them off. So you do what Louis says. Capiche?
How come no-one ever sues CHINA? (Score:5, Interesting)
Loius Vuitiion (or whatever the hell his name is), makes an over-priced, uber-expensive handbag, and then complains when knock-offs come around? Isn't that capitalism? I also notice that this dude and his bag of lawyers sue or jail everyone selling the stuff.
But not the guys making the stuff.
Because his handbags come out of the same Chinese factory as the knock-offs. That's why most people will never notice that they *are* knock-offs. During daylight hours, the factory produces legitimate "on the books" merchandise, and then the night shift takes over, making the exact same stuff, but "off the books", which are then sold cheap, and shipped off to the rest of the world.
Legitimate copyright holder screams bloody murder, and sues and jails everyone, except the factory, who have already made their profit by selling the knock-offs to the distribution channel. And the guy can't sue or jail the factory in China, because during the day, they make his "real" merchandise.
The Chinese have figured out capitalism pretty well for a communist country. They've got capitalsim down better than the USA, that's for sure.
Re:Eh not really a free speech issue (Score:3, Interesting)
Re:We need a "DMCA safe harbor" for trademarks etc (Score:3, Interesting)
Also, perjury doesn't matter at all here - if someone is alleging a copyright infringement, then that needs to be investigated. Both the plaintiff and defendant can believe that they are in the right, and make claims in line with this, but if they're wrong, it's not perjury.
IANAL
"Intellectual property" in action (Score:4, Interesting)
Noticing how many posts are from people making references to the DMCA, despite this case being about a trademark, shows to me that the 'intellectual property' campaign to confuse people and treat information like property, and to blur the difference between patents, trademarks, and copyrights, is having success and is helping destroy society.
http://www.gnu.org/philosophy/not-ipr.html [gnu.org]
A brick and mortar analogy (Score:3, Interesting)
To John's Paint Store:
We believe your customer, Mr David Jones, is using your paints to create signs which violate our trademarks. You are to cease and dissist from providing him with such paints or we will sue you for contributory infringement.
Sincerely:
so-and-so, Lawyer for Acme Industries, Inc.
Same? Different? On what basis?
Re:The Pirate Bay case, only worse. (Score:3, Interesting)
I don't remember the vendor, but a while back there was a high end product vendor/manufacturer that requested ebay take down any and all listings related to their product, counterfit or not (and by not I mean people selling off their old non counterfit products).
It was a while ago...
Re:The DMCA does not apply here! (Score:1, Interesting)
I suppose there could be arbitrage opportunities from buying at retail in one country and selling in another if prices or exchange rates are sufficiently out of whack, but I doubt that's a very common practice.
I don't know about the USA, but this used to be very common in the UK. Until Levi's (the jeans company) took Tesco (the biggest British supermarket) to the European court claiming that Tesco's advertising of genuine Levi's at much lower than normal price was damaging Levi's brand and was therefore some kind of trademark infringement. And the court, in just about the worst anti-consumer decision of all time, agreed.
Now that it's illegal such arbitrage is uncommon in Europe. But if it's legal in the USA I'd be surprised if it wasn't common. The price differences can be large.
Re:Ahmen (Score:3, Interesting)
Because society has penalties for making false claims. We need to give those provisions teeth again, and we could then start to trust them.
It is merely out of balance with the penalties for not acting when the claims are valid.
Re:We need a "DMCA safe harbor" for trademarks etc (Score:3, Interesting)
Add to this: "and if the take-down notice is baseless, the filer has to pay damages to the hosting company and their customer to make up for the inconvenience".
I'm fairly certain this could be covered by existing law. Libel, probably. With tortuous intent.
Re:The DMCA does not apply here! (Score:3, Interesting)
As I mentioned in another posting, unlicensed distributors would need to obtain legitimate stock from somewhere. I presume wholesalers in these items know who is a legitimate retailer and who is not. If someone is dealing in legitimate licensed goods, they'd have to buy them at retail somewhere which significantly reduces the available profit margins from undercutting the manufacturer's preferred retail price. I suppose there could be arbitrage opportunities from buying at retail in one country and selling in another if prices or exchange rates are sufficiently out of whack, but I doubt that's a very common practice. Counterfeiting seems a much more profitable venture.
While price arbitrage is used (generally for what are called gray market goods); resellers can also buy from legitimate sellers at below retail. The store may want to order more to get a bigger discount and offload the excess to someone else at a discount because they can't sell or carry the finance costs for the entire order.