Dreadful Ruling: Web Hosts Hit With $32 Million Judgment For Content On Customers' Websites

from the chilling-effects dept

Well, this is bad. We've worried in the past about the lack of a specific safe harbor to protect trademark infringement claims being brought against third party service providers. The DMCA has a safe harbor that protects against copyright claims, and the CDA has a safe harbor that protects against all non-intellectual property claims, such as defamation. But trademark is a loophole... and because of that you can get some really dreadful results. Earlier this year, we noted that a court had ruled that web hosting firms could be liable for trademark infringement done by their customers. The case involved luxury goods retailer Louis Vuitton suing some web hosting firms for the actions of their customers. Any common sense ruling would find that the hosts are simply the tool providers, and it was the customers running the actual websites who were liable. That is, if there were common sense.

Instead, as Eric Goldman alerts us, the jury has sided with Louis Vuitton and awarded the company $32.4 million in damages from the web hosts.

This is a bad end result no matter how you look at it. If you do any sort of web hosting, your liability just went up by a tremendous amount, and you may now be expected to proactively police all your customers' websites for anything that might possibly be seen as trademark infringement. It's safe to say that this is not what Congress intended -- given the nature of the safe harbors it set up in the DMCA and the CDA. Hopefully, either a higher court will toss this out and/or Congress will finally get its act together and extend safe harbor protection to trademarks as well.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    thomas, Sep 1st, 2009 @ 6:17am

    Why surprise?

    Lawyers don't care about the justice, they care about screwing whoever they are hired to sue. Most likely the jury/judge were computer illiterates who don't know the difference between the internet and a fishing net. Of course we might just see all the jury members and judge suddenly sporting complete luggage sets courtesy of Vitton. Or flush with cash.

     

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    Nick Stamoulis, Sep 1st, 2009 @ 6:33am

    Large brand are going to figure out ways to get some of those lost revenues back. Brands like LV have the legal firepower to get it done.

     

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    Killer_Tofu (profile), Sep 1st, 2009 @ 6:39am

    Re:

    And the complete and utter lack of respect for what is good and right.
    Only a lawyer could possibly think holding somebody who was at no fault what so ever responsible for somebody else's actions is good.
    Damn lawyers and greedy people.

     

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    6, Sep 1st, 2009 @ 6:39am

    This site brought to you by Gatoraid!

     

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    Rich Kulawiec, Sep 1st, 2009 @ 6:42am

    (1) not quite so cut-and-dried (2) failure to read RFC 2142

    (1) Based on what I've read so far of the materials involved in this case, it appears that repeated attempts were made to inform the webhost that their customer was Up To No Good, and that the webhost failed to act on that information. If that's the case, and I don't think I've read enough yet to definitively say one way or the other, then what we have here isn't a webhost blindsided by what a customer was doing, but a webhost that deliberately ignored a problem.

    (2) An astonishing number of webhosts, email providers, and just ordinary domain owners have failed to read RFC 2142 and do what it says. This means that they have -- either through ignorance, incompetence, laziness or just contrariness -- done the Internet equivalent of sticking their fingers in their ears so that they can't hear problem reports. And of course, many of subsequently feign shock that whatever-it-is has been going on for a very long time, and have their paid professional spokesliars say things like "We were unaware..."

    RFC 2142 requires that a number of email addresses be supported: for example, if you have a mail server, you must support "postmaster", and you had darn well better have the people doing the care and feeding of your mail server reading it and paying close attention to what shows up there. If you have a web site: "webmaster". Then there's "abuse" -- probably most relevant to this conversation. Compliance with RFC 2142 is trivially simple and is part of baseline due diligence for all Internet operations (whether a network, web host, domain owner, or anyone else). Yet 12 years after it was published, and many more years after its provision were widely recognized as de facto best practices, huge numbers of people still don't do it. And some of them have the audacity to whine when their choices are noted by sites like rfc-ignorant.org -- rather than recognizing that it is their own failure which is the real problem.

     

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    imbrucy (profile), Sep 1st, 2009 @ 6:45am

    Mike be careful about hoping Congress will do something about this. Knowing Congress we are likely to end up with something worse than the DMCA if they get involved again.

     

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    K. Henderson, Sep 1st, 2009 @ 7:04am

    Thanks Rich Kulawiec. I was going to say a similar thing (but not as well). As someone who's had her Intelluctual Property used without permission on other websites I know that once the web host is informed of the clients bad behavoir they need to take action to stop it.
    And imbrucy, you are right. We don't need the Congress Doing Something. We already have the 'Rules' in place. This webhost just chose not to follow them

     

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    Bubba, Sep 1st, 2009 @ 7:07am

    re

    "postmaster", and you had darn well better have the people doing the care and feeding of your mail server reading it and paying close attention to what shows up there. If you have a web site: "webmaster". Then there's "abuse" -- probably most relevant to this conversation.

    So you or your employee has to sift through 10,000 daily emails subject - V!@gA, eX$EnD youR pEn!s etc etc to find out who is bitching about trademark infringement. How about, as Mike suggested, they just go after the infringers themselves and NOT the Web Hosts?

     

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    Dark Helmet (profile), Sep 1st, 2009 @ 7:11am

    Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    "(1) Based on what I've read so far of the materials involved in this case, it appears that repeated attempts were made to inform the webhost that their customer was Up To No Good, and that the webhost failed to act on that information."

    When are we going to get over this idea that shutting off internet services should have ANYTHING to do with a business dispute? Why are they contacting the ISP AT ALL? What they should have done is inform THE INFRINGER that they were being noticed and warned, and then proceeded with legal action against them as necessary. Why involve the ISP at all? If somebody is running counterfit purses an selling them out of their van, do I call Shell Oil and insist that they stop selling the guy gas?

    "then what we have here isn't a webhost blindsided by what a customer was doing, but a webhost that deliberately ignored a problem."

    Right, because it isn't THEIR PROBLEM! It has nothing to do with them. Again, what would Shell Oil say if you told them about the guy in the van?

    "(2) An astonishing number of webhosts, email providers, and just ordinary domain owners have failed to read RFC 2142 and do what it says. This means that they have -- either through ignorance, incompetence, laziness or just contrariness -- done the Internet equivalent of sticking their fingers in their ears so that they can't hear problem reports."

    How have you taken an RFC and turned it into the definitive statute on receiving complaints? First, it's only email covered by the RFC. Second, it's a guideline on generic email addresses for departments that are rather static across a variety of departments. Do you know that they don't have any of the abuse/complaints/noc/security addresses? Only one of those is SUGGESTED by the RFC (and it is only a suggestion or guideline).

    "RFC 2142 requires that a number of email addresses be supported"

    No. Not even close to required. From the RFC:

    -This document specifies an Internet standards track protocol for the Internet community, and requests discussion and suggestions for improvements-

    That doesn't sound like a REQUIREMENT. Nor does:

    -organizations which support email exchanges with the Internet are encouraged to support AT LEAST each mailbox name for which the associated function exists within the organization-

    ENCOURAGED, not REQUIRED. And that's only if you have someone fulfilling that function. No Webmaster? Then you don't need a webmaster@company.com

    It's definitely best practices, sure, and maybe I'm nitpicking, but I hate non-humorous hyperbole like a KKK member hates hip hop....

     

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    Chronno S. Trigger (profile), Sep 1st, 2009 @ 7:35am

    Re:

    "As someone who's had her Intelluctual Property used without permission on other websites "

    So why in the flying hell would you go after a service rather than the infringer? That's like suing my electric company because I'm burning DVDs.

     

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    Anonymous Coward, Sep 1st, 2009 @ 7:41am

    "Why involve the ISP..."

    A fair question, but what about situations where a web host (e.g., eBay) is show by credible evidence to have intentionally buried its head in the sand while profiting from misconduct by one of its users? In the case in question, the jury instructions and verdict suggest this was the case. Of course, if I was privy to the evidence presented at trial I may have come to a different conclusion. Apparently the jury in the case, after hearing the evidence presented at trial, unanimously believed that LV demonstrated that the web site was not exactly one with "clean hands" in this matter, and thusly unable to avail itself of the safe harbor provisions under US law.

     

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    Dark Helmet (profile), Sep 1st, 2009 @ 7:49am

    Re:

    "what about situations where a web host (e.g., eBay) is show by credible evidence to have intentionally buried its head in the sand while profiting from misconduct by one of its users?"

    Then they are very, very bad internet citizens that STILL haven't done anything wrong. Firms that sell raw materials to despots overseas that they know are doing absolutely horrible things with the materials (like building weapons, using slave labor, etc.) aren't responsible for that despots actions. They probably shouldn't be doing business with them morally, but there isn't anything ILLEGAL about it.

    We've lost sight in this country of a very basic principle: You can't legislate morality.

    You hear that, Pat Robertson? Now stop being a fuckhead and go eat another twinkie, you prejudice douchebag.

    Ahem, sorry....

     

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    NullOp, Sep 1st, 2009 @ 7:50am

    Judgement

    These companies are just looking for the "free money." Its GREED, GREED, GREED! Nothing more to it than that. Common sense, which is anything but common, tells us you don't sue the toolmaker you sue the user. BUT, who has the most money in this case? Hmmmmm.........

     

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    Chronno S. Trigger (profile), Sep 1st, 2009 @ 7:55am

    Re:

    "what about situations where a web host (e.g., eBay) is show by credible evidence to have intentionally buried its head in the sand while profiting from misconduct by one of its users?"

    Like kickbacks? Or are we talking about liability because the web host excepts money to host a website? Or eBay excepts money to host an auction?

     

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    dleather, Sep 1st, 2009 @ 8:03am

    shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    "If somebody is running counterfit purses an selling them out of their van, do I call Shell Oil and insist that they stop selling the guy gas?"

    That's one heck of a stretched analogy, but I'll go with it. What if that gas station was warned repeatedly that the gas they were selling was being delivered to them by a counterfeit provider, who was siphoning gas from the refinery, diluting it, and selling it via their refinery as "Shell" gasoline? They continue to be warned of this fact, and there is significant evidence of this presented in court. Would that gas station be liable for damages to the refinery>

     

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    Rich Kulawiec, Sep 1st, 2009 @ 8:08am

    Re: re

    No, of course not. Techniques for handling such email properly have been well-known for many years, and make doing so a routine and easy task. Anyone who hasn't done their homework and learned them probably doesn't have the necessary skillset to run such an operation, and is likely to be make other egregious mistakes as well.

    I think this is the point at which I'll quote Bill Cole: Current Peeve: The mindset that the Internet is some sort of school for novice sysadmins and that everyone not doing stupid dangerous things should act like patient teachers with the ones who are."

     

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    Shienen, Sep 1st, 2009 @ 8:12am

    Honestly, I don't have a clue what most of that means...

    What I do know though, is that if I were selling paper, one of my customers uses said paper to write a death threat and I get sued for providing him with the means by which to do so, I'm gonna be pissed the fuck off!

     

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    sheinen, Sep 1st, 2009 @ 8:16am

    And if someone warned me that he used my paper to write death threats my response would quite rightly be 'he could be moulding it into a paper mache knife and hacking brian blesseds arse hole out with it, I just sell the shit'

     

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    Dark Helmet (profile), Sep 1st, 2009 @ 8:17am

    Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    A. Yes, it's a huge stretch of an anology
    B. You completely murdered it by turning Shell, the ISP, into the ones purchasing counterfeit material.

    Shell isn't doing that. They are selling gas to a van that's filled with countefeit merchandise the same way that the ISP is selling bandwidth or website space to a company who's inventory is filled with counterfeit merchandise.

    I fail to see why Shell Oil or the ISP have any involvement in this manner. They sell gas/internet services, and they did so legaly. Shell isn't responsible for what drivers do with their gas and ISPs aren't responsible for what people do with their bandwidth/space. How is that not simple? And the counter arguments never seem to make much sense either:

    1. ISPs make money from other's using their services for illegal activities: Yeah? And Shell Oil makes money off of the gas used by drug runners, speeders, etc. What difference does that make?

    2. The ISPs were warned repeatedly that their customers were doing terrible, terrible things and they just ignored it: So? Why wouldn't they? They aren't involved any more than Shell Oil in Mexican drug cartels. Would you go up to the CEO of Shell Oil, proclaim, "Mr. CEO, Mexican drug runners are driving cars up to the States using Shell gas!" and expect him to do anything other than politely ask you to get out of his way since he has a tee time in an hour?

    3. It's morally wrong: Probably true, but irrelevant. You can't legislate morality, and that's what is happening, from the bench no less, making this doubly worrisome.

     

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    A. Taylor, Sep 1st, 2009 @ 8:22am

    Re:

    I can't believe that you actually support bringing about lawsuits against anyone other than the infringing party which was not the web hosting provider. As a person who pays thousands of dollars per month to host my websites, I suppose I can expect my hosting fees to increase significantly in the near future thanks to such idiotic lawsuits such as this.

     

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    ChurchHatesTucker (profile), Sep 1st, 2009 @ 8:25am

    Re: Re:

    "So why in the flying hell would you go after a service rather than the infringer? That's like suing my electric company because I'm burning DVDs."

    Quick! Patent that method!

     

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    ChurchHatesTucker (profile), Sep 1st, 2009 @ 8:29am

    Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    "RFC 2142 requires..."

    An RFC is a Request For Comments. It may or may not be considered an Internet Standard by the IETF, but it hardly carries the force of law in either case.

     

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    Chuck Norris' Enemy (deceased) (profile), Sep 1st, 2009 @ 8:30am

    Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    Well first, an actual theft happened, whereas no counterfeit vendor is stealing LV bags and 'diluting' them. But you are forgetting that you are able to sue an unrelated party here. I don't know who that would be.

    Now if the other counterfeit refinery was making a similar gasoline compound and selling it as Shell Oil then you could hold the DOT liable since their roads were used to transport the oil from the refinery to the gas station. That makes perfect sense to me! (Sarcasm noted)

     

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    Rich Kulawiec, Sep 1st, 2009 @ 8:33am

    Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    (1) You're arguing against a position that I haven't taken. And you're conflating indirect, unknowing support (e.g., selling gasoline to someone who uses it to power a vehicle which in turn is used for something illegal) with direct, knowing support (e.g., what appears to have happened here, but I'm reserving judgment until I finish reading).

    (2) It appears that you are unfamiliar with the purpose, intent and usage of RFCs, as well as with the specific choices of language used within them. RFCs use the terms "must", "should", "may" and the like very carefully -- please read RFC 2119 for an introduction to this, but recognize that even that only scratches the surface. In this particular case, however, note for example (from RFC 2142): "For example, if an Internet service provider's domain name is COMPANY.COM, then the address must be valid and supported". That's a "must". And not only does RFC 2119 spell that out, but anyone equipped with substantial experience and who has been paying even a little bit of attention knows what that means. Even someone who's never read RFC 2142 should have a clue: it's been discussed ad infinitum on innumerable mailing lists, web forums, Usenet newsgroups, etc. for years.

    More broadly, compliance with RFC 2142 is not only trivially easy, it's part of baseline due diligence, and has been for a very long time. Anyone who can't handle an essential and simple task like this is very likely not at all ready to tackle far more complex problems.

     

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    Rich Kulawiec, Sep 1st, 2009 @ 8:47am

    Re: Re:

    Well, we certainly agree that Pat Robertson et.al. are douchebags, so there's a bit of common ground.

    And we agree that legislating morality is truly bad idea.

    Where we part company (maybe) is on a basic principle, one that has been part of the fabric of the 'net for many decades: everyone is responsible for what their operation does to the rest of the 'net. Whether that "operation" is a single laptop that they're carrying around, or a huge multi-site hosting farm, or a network, or anything else, doesn't matter: the principle is the same. This isn't legislated -- and doesn't need to be. It's how the Internet works, on a very deep and fundamental level, and many of the problems we currently face are problems because it's not sufficiently put into practice.

    If that operation is emitting abuse, then it's their abuse: it came from their server, or their network, therefore they own it. Now...they may of course not be the only ones who own it: it may be a misbehaving customer who's really doing it, in which case they own it too. But whoever owns it, they have the responsibility to make it stop.

    Which leaves us with the question of "what's abuse?" I say that spam, DoS attacks, phishing, etc. are, and that file-sharing isn't -- for examples, I could add dozens of items into each columns. I'm sure you could too, and so could everyone else reading this, and all our choices would probably be different.

    In this particular case, it's not clear to me yet that what was going on actually was abuse, although so far it sure looks that way. (As I've said twice previously, I'm still reading, so my opinion may change.) If it wasn't abuse, then I'll probably concur that remedial/punitive measures should be directed at the customer, not the host. If it was abuse, then the host should be on the hook for it as well.

    That said: any sane host should be doing everything it can to be alerted to such issues, so that it can make a determination for itself which of those it is, what their exposure is, etc. "Read abuse reports and forward the tricky ones to the legal department for study" is admittedly a simplistic approach, but at least it's better than "ignore them entirely and hope the problem goes away".

     

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    Dark Helmet (profile), Sep 1st, 2009 @ 8:54am

    Re: Re: Re:

    "everyone is responsible for what their operation does to the rest of the 'net"

    Wonderful in theory, and maybe when the 'net was smaller in active population that made sense, but the times they are a changin' and I don't think that unspoken rule is workable any longer.

    More importantly, your way requires more lawyers than mine since there are more parties involved, and upon takeover I'll be rounding all the lawyers up and submitting them to a "Can you breath mustard gas" test, so we need to come up with a new plan....

     

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    Doug, Sep 1st, 2009 @ 9:01am

    Seems to me

    This type of law suit would be the same as suing a city council for zoning an area as commercial and allowing a used furniture business to operate.

     

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    TW (profile), Sep 1st, 2009 @ 9:01am

    Who rules on the allegations?

    Lots of great comments. I'm going to nit-pick a bit on the discussion that the hosting company was informed that the site in question was "up to no good." I certainly don't know all the specifics of who knew what or was informed when, etc. But, I think this brings up an interesting question. Who has the responsibility to prove an allegation that a site is selling knock-off merchandise or some other allegedly nefarious activity? Is a hosting company required to shut down any website they host, whenever they receive a complaint of bad behavior? Are they expected to investigate and make a ruling on whether or not the site is doing something illegal or should they wait for the courts to decide the issue and then take appropriate action?

    This seems very similar to sites removing allegedly infringing content based on receiving takedown notices from content owners. But, removing a potentially infringing video from YouTube is much less significant from a business standpoint than shutting down a company's website based on a third party allegation. I can certainly foresee a situation where a company might send frivolous complaints to a competitor's hosting company in an attempt to get their site shut down (even if it is just for a few days).

    Just food for thought.

     

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    dleather, Sep 1st, 2009 @ 9:07am

    Re: Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    OK, so we're agreed the shell analogy is bad all around.

    How about this one? Is a flea market liable if a vendor in the market is repeatedly selling counterfeit goods? After of course multiple warnings about the vendor have been provided to the flea market?

     

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    Overcast (profile), Sep 1st, 2009 @ 9:17am

    Why didn't they go after the power company for providing power to the servers and switches as well?

    Without that - the content couldn't have been online either - so the power company is just as liable with this in mind.

     

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    ChurchHatesTucker (profile), Sep 1st, 2009 @ 9:24am

    Re: Who rules on the allegations?

    "But, removing a potentially infringing video from YouTube is much less significant from a business standpoint than shutting down a company's website based on a third party allegation. "

    But what if the 'infringing video' was informing the public of a company's bad practices? Dumping hazardous chemicals into the water supply or something? I'd call that at least as bad.

     

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    Dark Helmet (profile), Sep 1st, 2009 @ 9:27am

    Re: Re: Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    "How about this one? Is a flea market liable if a vendor in the market is repeatedly selling counterfeit goods? After of course multiple warnings about the vendor have been provided to the flea market?"

    Sorry, but that's not specific enough for me.

    If the warnings are provided by the police, particularly if there has been action taken against them by a court or there is a court order for the vendor to cease their activity, then yes, they are obligated to follow the court's order and to assist law enforcement in any way.

    If the warnings came from a company, then absolutely not, they are obligated to nothing. Because how do they know that the company is being truthful and accurate?

     

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    A guy, Sep 1st, 2009 @ 9:29am

    Re:

    It seems the prevailing logic here is that as long as LV complained to the power company about a website, running off their electricity, they should be subjected to millions of dollars in fines. After all, they are profiting from the website running.

     

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    Anonymous Coward, Sep 1st, 2009 @ 9:33am

    Re: Re: Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    as the fleamarket I would say "There's the stall, if you have issues, take it up with them, alternatively, here's the number for the police" I have no way of knowing you are who you say you are, that you really own some trademark or otherwise validate what you say in any way, I don't even know for sure that they are selling counterfeit goods until it is proven they do. For all I know, you could be a close from of the guy who owns the stall across from the "problem" stall. Remember, innocent until proven guilty, not the other way around.

    If I kick someone out just because Joe Shmoe says they are doing something Illegal (that isn't easily verifiable) I would lose customers and probably be sued by the stall owner, if I help you contact the stall owner then you can talk to them directly and/or send the police to someone directly.

     

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    Kevin, Sep 1st, 2009 @ 9:38am

    Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    That's all well and good, but an RFC is a "Request For Comment," not a law. It has no legal force behind it whatsoever.

     

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    Mike Masnick (profile), Sep 1st, 2009 @ 10:23am

    Re:

    A fair question, but what about situations where a web host (e.g., eBay) is show by credible evidence to have intentionally buried its head in the sand while profiting from misconduct by one of its users?

    Hmm. Nearly all of the court cases along these lines that have involved eBay have shown that the company bent over backwards to accommodate trademark holders. They absolutely did not "bury their head in the sand." In fact, in the Tiffany ruling, the court found that eBay went WAY above and beyond what was legally necessary to protect such trademarks.

     

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    Michael Vilain, Sep 1st, 2009 @ 10:26am

    Re: ISP or infringer?

    I see this ruling as a good thing for those who use Trademarks and Servicemarks. I practice a form of bodywork that's Servicemarked around the globe. That doesn't prevent other people who didn't go through the training I had from claiming they do this work and are "just like" what I do. For years our school has been going after people who violate the Servicemark in print.

    The web has been harder. Usually sending a C&D letter is enough. But we had one person using a Yahoo address with our servicemark in their name. Yahoo ignored any request for takedown or removal of this person from their systems. Maybe now, they'll listen. $32M is a lot of "Pay attention to me" money!

     

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    skooter, Sep 1st, 2009 @ 10:33am

    Re: re

    You don't go after the infringers themselves because they're in the back room of a knock-off manufacturing facility in China, where you need a massive amount of international law enforcement cooperation to get any action. This is the same as the old crack house law - if I'm a landlord and my tenants are selling crack, and someone tells me about it, I'm only liable if I DO NOTHING. Well beyond the public facing postmaster/abuse/webmaster addresses, I'm sure LV escalated their attempts at contact to higher levels within Akanoc. A reasonable reply could have saved the $MM's.

     

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  39.  
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    Rekrul, Sep 1st, 2009 @ 10:39am

    If you do any sort of web hosting, your liability just went up by a tremendous amount, and you may now be expected to proactively police all your customers' websites for anything that might possibly be seen as trademark infringement. It's safe to say that this is not what Congress intended -- given the nature of the safe harbors it set up in the DMCA and the CDA.

    Maybe not, but it's exactly what the corporations want.

     

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  40.  
    identicon
    skooter, Sep 1st, 2009 @ 10:43am

    Re: Re:

    That's the biggest different b/c eBay & Akanoc - responsiveness and cooperation. eBay sets the standard for protection of IP rights online, they devote millions in infrastructure and human resources. Rogue ISPs, whose profit model puts them just as directly in the line of fire as eBay's model, should be held to the same standard. Turn the discussion from counterfeit handbags to child porn and folks' outrage at the result would change, but the fundamental legal theory would stay the same. If you facilitate trafficking in illegal goods (which knock-offs of trademarked products clearly are) there are penalties to pay.

     

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  41.  
    identicon
    skooter, Sep 1st, 2009 @ 10:49am

    Re: Re:

    That's the biggest different b/c eBay & Akanoc - responsiveness and cooperation. eBay sets the standard for protection of IP rights online, they devote millions in infrastructure and human resources. Rogue ISPs, whose profit model puts them just as directly in the line of fire as eBay's model, should be held to the same standard. Turn the discussion from counterfeit handbags to child porn and folks' outrage at the result would change, but the fundamental legal theory would stay the same. If you facilitate trafficking in illegal goods (which knock-offs of trademarked products clearly are) there are penalties to pay.

     

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  42.  
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    Dark Helmet (profile), Sep 1st, 2009 @ 11:10am

    Re: Re: ISP or infringer?

    "But we had one person using a Yahoo address with our servicemark in their name"

    I thought that to be a violation of a service mark the usage had to be IN the advertisement of the service. How does someone having a Yahoo account with your service mark fall under that distinction?

     

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  43.  
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    Rich Kulawiec, Sep 1st, 2009 @ 11:24am

    Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    Of course it doesn't carry the force of law. It is, however, something that competent professionals pay attention to, doubly so when it's in their own best interest to do so. And RFC 2142 happens to be one those that squarely falls in that category.

     

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  44.  
    identicon
    Rich Kulawiec, Sep 1st, 2009 @ 11:33am

    Re: Re: Re: Re:

    Well, you are correct that it did work much better when the 'net was a smaller place. Twenty years ago, allowing your server/network to be a public nuisance meant that you stood a fair chance of having it unplugged for you until you learned the basics of network operations. This worked beautifully and encouraged server/network operators to pay attention to what was going on.

    Today, not so much, BUT: there's no need to involve lawyers in this at all. While it not be feasible to unplug "them" from "us", it's trivially easy to unplug "us" from "them" and lots of people are already doing so, in cases involving the most egregious offenders. The Spamhaus DROP list, suitable for inclusion in perimeter firewalls/routers, is one such mechanism, but there are many others (including rfc-ignorant, for people that don't read and follow RFC 2142 and RFC 822 & successors.)

    Use of these is entirely elective and doesn't require any legal proceedings: it's just a choice that any server/network operator can make. The problem is making those operators aware of their existence and providing guidance on which ones are appropriate when and where.

     

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  45.  
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    PRMan, Sep 1st, 2009 @ 12:22pm

    Re: Re:

    "You hear that, Pat Robertson? Now stop being a f---head and go eat another twinkie, you prejudice douchebag."

    What do you actually know about Pat Robertson being prejudiced?

    How many wells have you dug in villages in Africa and Latin America for people you don't even know so they wouldn't have to walk 2 hours plus every day just to get water?

    How quickly did you go and help the tsunami victims, the very same countries that topped lists of KILLING CHRISTIANS mere months earlier, and go and help rebuild their countries for free just because?

    Were you the very first organization to show up in Nashville after the hurricane? Are you still there helping after all these years?

    How many CEOs of multi-million dollar corporations refuse when their board gives them a raise from $80,000 because they feel like they don't need any more than that to live a great life in America, and would rather the additional money go to strangers all over the earth?

    Talk about prejudiced... I believe it means speaking from hatred born of ignorance...

     

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  46.  
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    nasch (profile), Sep 1st, 2009 @ 12:35pm

    Re: Re: ISP or infringer?

    Glad to know my email provider won't shut me off at the request of some random trade group. Thanks.

     

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  47.  
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    Dark Helmet (profile), Sep 1st, 2009 @ 1:07pm

    Re: Re: Re:

    "What do you actually know about Pat Robertson being prejudiced?"

    You know, that was a good question, so I threw his name into wikipedia. One of the sites that came up was "pat robertson controversies"....and it's like 10k words long. How about a few highlights, shall we?

    1. Prejudice against certain Christian demoninations: On January 14, 1991, on The 700 Club, Pat Robertson attacked a number of Protestant denominations when he declared: "You say you're supposed to be nice to the Episcopalians and the Presbyterians and the Methodists and this, that, and the other thing. Nonsense. I don't have to be nice to the spirit of the Antichrist."

    2. Prejudice against feminists: He has described feminism as a "socialist, anti-family political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians." (In case you're a nutcase, please note that those claims are ridiculous)

    3. Prejudice against...well, everyone who disagrees with him: He agreed with Falwell when Falwell stated[8] that the September 11, 2001 terrorist attacks were caused by "pagans, abortionists, feminists, gays, lesbians, the American Civil Liberties Union and the People For the American Way."

    4. Prejudice against homosexuals: Robertson stated that the acceptance of homosexuality could result in hurricanes, earthquakes, tornadoes, terrorist bombings and "possibly a meteor."

    5. Prejudice against the Scotish: In 1999 Robertson said Scotland was "a dark land" overrun by homosexuals. This caused the Bank of Scotland to drop plans for a business operation with him.

    6. Prejudice against rulers of soveriegn foreign nations, like Hugo Chavez: "I don't know about this doctrine of assassination, but if he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it. It's a whole lot cheaper than starting a war, and I don’t think any oil shipments will stop."

    7. Prejudice against Dover, Pennsylvania: Robertson told citizens of Dover, Pennsylvania that they had rejected God by voting out of office all seven members of the school board who support intelligent design.

    8. Prejudice against Palestinians: Robertson said that Ariel Sharon's illness was possibly retribution from God for his recent drive to give more land to the Palestinians. He also claimed former prime minister Yitzhak Rabin's 1995 assassination may have occurred for the same reason.

    9. Prejudice against Islam: Robertson has frequently denounced the religion of Islam and Muslim people. During a 1995 taping of The 700 Club, he called the religion a "Christian heresy".[48] During a September 19, 2002 episode of FOX News Channel's Hannity & Colmes, Robertson claimed that the Muslim Prophet Muhammad, was "an absolute wild-eyed fanatic … a robber and a brigand."

    10. Prejudice against Asians: On the February 7, 2007 edition of The 700 Club, Robertson stated that people who have too much plastic surgery "got the eyes like they're Oriental" and stretched his eyelids in a manner stereotypical of Asians.[

    11. Prejudice against Hindus: On March 23, 1995, Pat Robertson led a television program in which he attacked Hinduism, calling it "demonic".

    12. Prejudice against common sense: Robertson claims on his web site that through training and his "Age-Defying energy shake", he is able to leg press 2,000 pounds

    But, yeah, you know, Pat Robertson is great because he goes to decimated areas like New Orleans with food and water, which you get if you attend his prayer sessions.

    Pat Robertson is a prejudiced ass. Goood works from bad men don't make them good men. Al Capone had a great PR manager too, didn't make him any less of a mobster....

     

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  48.  
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    Jason (profile), Sep 1st, 2009 @ 1:51pm

    Re: Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    1)Not punishing a paying customer without verifiable proof of wrongdoing and without legitimate authority to obtain proof hardly constitutes direct, knowing support.
    2) Actually in any lawsuit, baseline due diligence is a burden born by the serving party, not the party being served. There are of course statutory requirments. For example a corporation generally must register an agent for service in any state where they do business. That would indeed be the appropriate place to begin legal process serving. Pretending that an internet standards board somehow redefines statutory requirements for operating a business is absurd.

     

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  49.  
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    Jason (profile), Sep 1st, 2009 @ 1:59pm

    Re: Re: re

    "if I DO NOTHING"

    So you would immediately evict someone upon an unsubstantiated report that comes to you as a form letter from a corporation that mass produces form letters telling you that your paying tenant is a crack dealer?

    No, you would do what you are able to do under the law. You notice your tenant that you will be inspecting the premises, at least 24 hours in advance as required by law. Oddly, 24 hours later you find no crack and no signs of crack or anything that would lead you to suspect crack dealing, and THEN YOU DO NOTHING.

     

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  50.  
    identicon
    Anonymous Coward, Sep 1st, 2009 @ 2:08pm

    Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    More than half my spam is directed at a family of eddresses including postmaster, webmaster, majordomo, abuse, info, support, accounts, billing, admin, administrator, help, and the like. In addition, postmaster gets all the bounces from bogus email that results because (just as they have done with .pa.gov and others) spammers have spoofed my domains. There is no way I can afford the time to sort through all of this.

    I thought that it was still necessary, though, to serve legal notices by registered mail. It is not that hard to send something to the address of the administrative contact. I wonder why this wasn't used--here's betting the lawyers wanted money not compliance.

     

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  51.  
    identicon
    Ryan, Sep 1st, 2009 @ 2:18pm

    @ everyone that thinks that this ruling is okay...

    Whose fault is it when I shoot an innocent person? Mine? Or can I put the blame on the people who sold me the gun, made the gun, made the bullets, etc. It doesn;t make any sense for the web hosts to have to police their sites, their costs would be too great.

    If I recall correctly, copyrights must be protected by their owners or else they arent valid. Should this not be the same for trademarks? If gucci wants their knockoff competitors "knocked off" they should take the action themselves, not complain at the webhost.

     

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  52.  
    identicon
    Rich Kulawiec, Sep 1st, 2009 @ 2:48pm

    Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    Presuming what you report is true, then your mail system is poorly designed and implemented. I handle (at the amount) 83 role accounts for 21 domains and have no difficulty in doing so: it's just a matter of using the right software and configuring it appropriately.

     

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  53.  
    identicon
    thomas, Sep 1st, 2009 @ 4:52pm

    Re: Re: Re:

    eBay sets the standard for protection? What about all those computers sold dirt cheap with thousands of dollars of pirated software on them and no disks? this is against the eBay EULA, yet they show up every day from so called trusted sellers. Example: a MacBook Pro for $ 1600 plus thousands of dollars worth of software such as Final Cut Pro, Microsoft Office, etc andclear statement 'no disks supplied'. Ebay lets these happen every day and does not stop it.

     

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  54.  
    identicon
    Mike Raphone, Sep 1st, 2009 @ 5:57pm

    Sleazy lawyers look for the deepest pockets.

    The only one that will win in a situation like this is the lawyers. The cost to defend against this kind of outrageous law suit is astronomical. Every business that thinks that something related to the Internet has harmed them, will try to attack the service provider like a punch drunk fighter. Those providing Internet services are not the police and should not be required police their customers. The hosting company in question is caught in the middle. If they shut down the customers website they could have been sued and if they did not shut down the customers website they could be sued. I guess the United States Postal Service should be liable for delivering advertisements violating a companies trademark.

     

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  55.  
    identicon
    RShara, Sep 1st, 2009 @ 9:03pm

    Nice robbery!

    This is like holding an apartment owner responsible for one of the tenants going out and robbing a gas station. Totally bizarre and illogical.

     

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  56.  
    identicon
    Anonymous Coward, Sep 1st, 2009 @ 11:01pm

    I just love all of you ignorant people who were not in the courtroom for this case. We on the jury were no where near 'computer illiterates'. Obviously, Michael, the guy who started this blog is quite ignorant of the facts in this case. NO WHERE in the decision is anything remotely implying that a web host has to proactively look at what their customers put on their sites. However, when you are notified that your customers are hosting illegal goods, and you decide to ignore it for years, because you feel you are above the law. Well, that is wrong. Besides, Akanoc's very own user agreement with their customers states that they are not allowed to use Akanoc's servers for counterfeit goods. LV has every right to go after those who directly or indirectly (in this case) contribute to the theft of their intellectual property. If you don't have the all the facts in this case, then be quiet. Because you don't know what you are talking about.

     

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  57.  
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    Anonymous Coward, Sep 2nd, 2009 @ 12:56am

    Re:

    Sorry to say the jury were idiots. If the hosting company is presented with a LEGAL DOCUMENT (i.e. a court order) that says their customer is a counterfeiter, then they should take down the site. Receiving an ALLEGATION from one private citizen against another does not rise to the standard of legal action -- it's just a personal p*ssing contest.

    The jury got punked on this one. Idiots.

     

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  58.  
    icon
    Yeebok (profile), Sep 2nd, 2009 @ 3:56am

    Re: Re: Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    "How about this one? Is a flea market liable if a vendor in the market is repeatedly selling counterfeit goods? After of course multiple warnings about the vendor have been provided to the flea market?"

    Err .. what are the police supposed to be doing at the time ? I mean you're typing with counterfeit logic there, dleather - should your ISP get sued because you're using their bandwidth to provide a counterfeit item?

     

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  59.  
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    Yeebok (profile), Sep 2nd, 2009 @ 3:59am

    Re: Re: ISP or infringer?

    That's the whole problem there - these ISPs are getting letters from Vilains. Your surname's threatening them. Joking, of course.

     

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  60.  
    identicon
    Stuart Friedman, Sep 2nd, 2009 @ 5:43am

    There Was a Safe Harbor!

    The article talks about the need for a safe harbor for web hosting companies, but look at Verdict Question No. 12 of the scribd document linked to in the article. "Has the Defendant proven by a preponderance of the evidence that it is entitled to a safe harbor in the DMCA?" Answer: "No."

     

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  61.  
    identicon
    Someanalogy, Sep 2nd, 2009 @ 8:59am

    Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    Thats not even close.

    Try this:
    A gas station owner sells fake "Shell" gasoline. The gas station owner also leases the land from a landlord. The landlord is warned multiple times that the gas station owner is selling fake Shell gas.

    Is the landlord liable?

     

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  62.  
    identicon
    Anonymous Coward, Sep 2nd, 2009 @ 9:09am

    Re: Re: Re:

    Entertainingly you fit yo/ur own definition of prejudice. How do you know he meant race?

     

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  63.  
    identicon
    RS, Sep 2nd, 2009 @ 10:53am

    Re: Re:

    It wasn't an 'allegation'. There was irrefutable EVIDENCE according to the law. There was no defense. Again, you weren't there, and can't even offer a knowledgeable opinion. What you are saying is junk, coming from a position of ignorance.

     

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  64.  
    identicon
    RS, Sep 2nd, 2009 @ 10:56am

    Re: There Was a Safe Harbor!

    If you read the DCMA, there are certain standards that must be met in order to take advantage of the Safe Harbor. There was no Safe Harbor met by the defendant. Do not pick this apart if you weren't in the courtroom.

     

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  65.  
    identicon
    Stuart Friedman, Sep 2nd, 2009 @ 12:13pm

    Re: Re: There Was a Safe Harbor!

    Obviously I am lacking a ton of information. Arguably the jury was instructed if they found that the case did not involve "widgets," they could not apply the safe harbor. If you are one of the attorneys (or parties), etc., why don't you take five minutes to summarize what the issues were about. I don't know if L.V. sent them a dozen letters saying the items were fake or simply argued that anyone should know they were fakes. I don't know whether the website said "copy purses," "knockoffs," or whether they were arguing that the web hosting company should have known they were fakes because any fashion maven knows that L.V. only distributes through brick and mortar stores.

    People say that this case establishes a horrible precedent, but the only documents they provided are light on substance. Was the issue litigated in pretrial motions? A copy of the pretrial rulings on the issue might be helpful.

    I'm reading that the sky is falling, but only have Chicken Little's word on this. The ruling could easily be a real outrage, but we are scant on information.

     

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  66.  
    identicon
    dleather, Sep 2nd, 2009 @ 1:40pm

    Re: Re: shell gas analogy...Re: Re: (1) not quite so cut-and-dried (2) failure to read RFC 2142

    aah, that's actually a much better analogy, thank you. Would it also be fair to use a landlord of an apartment building whose residents are knowingly selling fake Louis Vuitton items?

    Seems like a jury could probably go either way...

     

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  67.  
    identicon
    RS, Sep 2nd, 2009 @ 9:03pm

    Response to Stuart's questions

    Here goes, to respond to Stuart's questions. It would certainly take much more time than 5 minutes but I will try and give you some bullet points.

    First of all, this case never should have gone to court. It was filed in 2007, after LV tried for 2 years (dozens of emails, letters, etc.), to try and get Akanoc to stop hosting these websites. LV has asked other hosts to stop hosting counterfeit sites, and they have done so, without legal action. Other companies have also had success with other legitimate web hosters. Akanoc, for 4 years, ignored the fact that their customers were using Akanoc's servers to sell illegal counterfeit goods. They did nothing. Until after the lawsuit was filed. Then they did a little bit. There are some of those sites still up! Manufactuing is another issue, falls under different laws and is almost impossible to find these people in China. The buck stops at the web host. That is the logical place.

    There were counterfeit goods purchased from some of the MANY sites that Akanoc was hosting. These items were purchased on behalf of LV and presented in court. There was never any testimony that Akanoc/MSG had any question about the products being counterfeit.

    There was legal evidence presented that proved these sites were on the Akanoc/MSG servers. The fact that Akanoc's VERY OWN user agreement with it's customers forbids them to use Akanoc's servers to market/sell or whatever counterfeit goods was not enforced. There was more than 1 stipulation in their own user agreement that Akanoc violated itself.

    It was proven that Akanoc had the ability to shut off the IP's or terminate the customer for non-response. It was Akanoc's own greed; they didn't didn't want to give up the monthly income from their customers.

    Safe Harbor refers to things such as transient use or caching. That did not apply in this case.

    The law allows for the protection of trademark and copyright as it should. The holder of trademarks and copyrights own that intellectual property and deserve that protection. Because of the relative newness of the internet, this issue hadn't really been dealt with. The jury was allowed to find an amount (up to 1 million as set by Congress) and charge for each trademark infringement. This ruling will also protect a smaller, less known company if their intellectual property is stolen. That is a good thing! If you have intellectual property this ruling helps protect what could be your life's work. The defendant in this case was willful and knew he was CONTRIBUTORILY infringing on trademark and copyright. For 4 years.

    There was 2 years of pre-trial talks after the suit was filed.

    As to the issue of fakes, some of the sites did say they were fakes. Trademark still infringed. Even if one says, I am selling counterfeits, trademarks and copyrights can still be infringed. And it's against the law. Some were designed to confuse the consumer who may be spending their hard earned money and thinking they are getting a really great deal.

    The defendant KNEW. It wasn't 'should have known'. It was brought to his attention, over and over and over and over and over. He did nothing.

    Terrible precedent for whom? The counterfeiters? People who keep helping them while the owner of intellectual property sees the value plunge? This wasn't just about LV, it was about protecting intellectual property owners from others who think they can just walk all over them.

     

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  68.  
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    Azrael (profile), Sep 2nd, 2009 @ 11:12pm

    Re: Why surprise?

    Here it's not about the lawyers at all, it's about incompetent judges and juries.
    The fix: SUE THEM !!

     

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  69.  
    identicon
    Anonymous Coward, Sep 3rd, 2009 @ 1:35am

    To: RS

    So are you telling us that the ISP ignored an injunction for four years. Nope, sorry, I forgot about contempt.

    You're telling us that "LV" didn't bother to file for an injunction, 'cause that would have opened them up for contempt.

     

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  70.  
    identicon
    coach factory outlet, Dec 28th, 2010 @ 9:16pm

    coach factory outlet online http://www.coachoutletfactory.org/

    So grest website it is.I search this website from google.Welcome to my own blog [url=http://www.coachoutletfactory.org/]coach factory outlet[/url] to have a look.In [url=http://www.coachoutletfactory.org/]coach factory outlet online[/url] there are many coach bags sale.All of you could find what you like here.

     

    reply to this | link to this | view in thread ]


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