While a US court last year (correctly) found that eBay is not liable
for counterfeit goods sold by users, a recent court case won by Louis Vuitton surprisingly found that a web hosting company could be found liable
, if a site hosted by the company sells counterfeit goods. The court finds the site guilty of both contributory copyright infringement and contributory trademark infringement, claiming that the host knows about the infringement due to notices from Louis Vuitton, without explaining how the hosting firm could possibly know if the complaints were legit or not (or whether the goods being sold were counterfeit or not). In a bit of a scary connecting of the dots, the court suggests that because the web host was notified, and because it could
then disable the accounts, it's now liable as well. That creates a huge chilling effect for web hosts -- as it encourages them to basically shut off any website based on any accusation of selling counterfeit goods. If web hosts don't do that, they may face significant liability. There's nothing wrong with companies going after the actual
sellers of counterfeit goods -- but going after the web host (and winning!) sets a dangerous precedent.