Jury Correctly Recognizes That Print-On-Demand Website Isn't A 'Counterfeiting' Business Engaged In Infringement

from the good-to-see dept

Phew. Earlier this year, I wrote about a case I witnessed down in LA, in which the print-on-demand website RedBubble was deemed by a jury to have infringed on the trademark rights of the clothing store Brandy Melville, despite not actually selling any items that matched Brandy Melville's trademarks on clothing that Brandy Melville sells -- and being extraordinarily proactive in taking down things once alerted to the fact that certain designs might be infringing. Again, as noted, I served as an expert witness in that case and filed a report, but did not need to testify. The very same law firm, representing a few different plaintiffs, has been busy suing RedBubble and other print-on-demand businesses, apparently trying to carve out a niche. Since that ruling, there has been a lot of back and forth between the parties (some of it quite... emotional), but as it stands now, the ruling has been appealed to the 9th Circuit, where it should be an interesting one to watch.

Another case, from the same law firm, against RedBubble was filed on behalf of Atari. Again, I was an expert, and filed a report. As the trial approached, the lawyers for Atari sought to exclude me from testifying, which was (at the very least) amusing, as it claimed that I "cannot offer an opinion as to the difficulty of content moderation generally" (despite highlighting how much academic work I've done doing research, reports, and other projects regarding content moderation). For a variety of reasons (unrelated to that filing), I didn't get to testify this time either, but thankfully the end result of this case was different than the one in LA: the jury found no infringement at all by RedBubble.

I wasn't able to attend this case in person like the last one, so I didn't get to witness the full trial, but RedBubble's Motion for Judgment as a Matter of Law filed at the conclusion of the trial lays out a pretty clear picture of what happened. At the trial, it was made clear that RedBubble, as a print-on-demand service, is simply an intermediary, not the actual seller of any of the products.

Here, the evidence introduced at trial shows as a matter of law that Redbubble is merely a transactional intermediary. First, it is undisputed that Redbubble does not control essential terms of the transaction. As Redbubble’s witnesses Mr. Deshais, Mr. Toy, and Mr. Hosking testified, Redbubble does not select the art that is offered for sale, the particular products (such as t-shirts or mugs) on which a piece of art may be printed, the title and tags for a product listing, or the price of product—the artist controls those details. Mr. Hosking also testified that Redbubble exists to allow artists to sell their art to a global audience. See Milo & Gabby LLC v. Amazon.com, Inc., 693 F. App’x 879, 886–87 (Fed. Cir. 2017) (holding that Amazon was not a “seller” for direct copyright infringement, in part because Amazon “did not control what information or pictures were put on the product-detail page, nor did it control the price for which the product was sold”; rather, “third-party sellers as applicable to their products, controlled these details at all times”); see also Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 103 (2d Cir. 2010) (eBay not directly liable for sale of counterfeit Tiffany jewelry on its website). Indeed, in Y.Y.G.M. SA v. Redbubble, Inc., the court granted summary judgment for Redbubble on the question of direct trademark liability, reasoning that because Redbubble’s service fee is the same regardless of the price charged by the artist, Redbubble’s “fee-based business model indicates the role of a service provider rather than a seller, as a seller almost invariably adjusts its price in relation to the value of the goods in question.”

Also, a key in both cases is that the law firm for the plaintiffs wanted to show counterfeiting (which has significant statutory damages). But to counterfeit, you have to show that they're selling an actual copy of a product being sold and that the seller knew it was counterfeit. That didn't happen:

Atari has not shown that Redbubble intentionally used a counterfeit mark or knew that the mark was counterfeit. The Ninth Circuit has held that to receive statutory damages for counterfeiting, the plaintiff must show that “(1) [The defendant] intentionally used a counterfeit mark in commerce; (2) knowing the mark was counterfeit; (3) in connection with the sale, offering for sale, or distribution of goods; and (4) its use was likely to confuse or deceive.” State of Idaho Potato Comm’n v. G&T Terminal Packaging, Inc., 425 F.3d 708, 721 (9th Cir. 2005); McCarthy 25:10 (“Counterfeiting is the act of producing or selling a product with a sham trademark that is an intentional and calculated reproduction of the genuine trademark.” (emphasis added)).

Even assuming Atari can prove that a counterfeit mark was used on Redbubble, Atari did not provide any evidence that Redbubble acted with intent or knowledge that any design was a counterfeit mark. Indeed, the Court already resolved the issue of Redbubble’s knowledge at summary judgment, holding that “Atari fails to establish either knowledge or willful blindness to infringement of Atari’s copyrights,” Dkt. No. 97 at 31, and that it “reaches the same result as to Atari’s trademark claims,” Dkt. No. 127 at 2. This is because “Atari provides no evidence that Redbubble knew of specific infringing material.” Dkt. No. 97 at 28-29 (cleaned up). To know that a mark was counterfeit and intentionally use a counterfeit mark in commerce, Redbubble would have to know of the specific material in question, which the Court has already ruled Redbubble does not. Even had the Court not already decided that issue, Atari did not provide any evidence at trial suggesting Redbubble had knowledge of specific material on its website, much less that any specific material constituting a counterfeit mark. Thus, the Court should grant judgment for Redbubble on Atari’s counterfeiting claim.

I am assuming that Atari will appeal to the 9th Circuit, and these two cases are going to be fairly important in determining whether or not print-on-demand can even exist as a business.

In my post on the Brandy Melville case, I noted that it was a sneak peek into a world without intermediary liability protections like Section 230 (since courts have determined that trademark is outside of the protections of 230). Even this "victory" highlights how important protections like Section 230 are. The key benefit of Section 230 is that it helps get cases like this one dismissed early and inexpensively. Even with RedBubble's win here, this case had to go through many expensive stages, including all the way through a jury trial (which is insanely expensive).

I've seen some people say that without 230 things will be fine because companies can still win down the road, but the expense of reaching "down the road" may be way too much for many companies, especially smaller ones, to survive. It's good that RedBubble won here, though I expect the real battle over all this is only just about to start on the appeal.

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Filed Under: copyright, counterfeiting, intermediary liability, jury, print on demand, section 230, trademark
Companies: atari, redbubble


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  • icon
    Koby (profile), 12 Nov 2021 @ 11:11am

    Freedom Isn't Free

    Trademark lawsuits no doubt cost a decent amount of money to defend, but hopefully this case will set precedence that will make it easier for other businesses down the road. I appreciate you helping them out in their case.

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

  • identicon
    Anonymous Coward, 12 Nov 2021 @ 11:35am

    Who would want ATARI on their clothing?

    ATARI died decades ago. The current shitshow is just 4 accountants and 3 lawyers suing over old IP.

    No progammers, developers, marketers, customer service.

    Literally just the 7 guys suing people. they bought the Atari name and IP and are the sole employees now.

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

    • icon
      ECA (profile), 12 Nov 2021 @ 12:41pm

      Re:

      Atari?
      Umm, they became a distributor. They would buy up startup games and then sell them, some real nice ones.
      Also they redistribute from their Own creations, over and over, and remake them for MANY other systems to keep the Intellectual property.

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

    • icon
      nasch (profile), 15 Nov 2021 @ 11:11am

      Re:

      Who would want ATARI on their clothing?

      People who enjoyed Atari games long ago?

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

  • icon
    That One Guy (profile), 12 Nov 2021 @ 1:35pm

    'You can't say we're wrong, that's not why you're here!'

    As the trial approached, the lawyers for Atari sought to exclude me from testifying, which was (at the very least) amusing, as it claimed that I "cannot offer an opinion as to the difficulty of content moderation generally" (despite highlighting how much academic work I've done doing research, reports, and other projects regarding content moderation).

    I rather suspect that the issue wasn't your lack of experience and ability to give an opinion on the subject so much as the fact that said opinion likely wouldn't align with what they wanted the jury to hear.

    That aside it's good to hear the jury got this one right, if on-demand services can be treated as the 'publishers' of potentially infringing works then that industry as a whole is basically dead in the water since there's always the chance that infringement might occur and with the absolutely ruinous fines that could be handed out even larger companies would almost certainly give it a pass, leaving a bunch of people and ideas abandoned.

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

  • icon
    Samuel Abram (profile), 12 Nov 2021 @ 2:13pm

    This made me audibly laugh out loud

    the lawyers for Atari sought to exclude me from testifying, which was (at the very least) amusing, as it claimed that I "cannot offer an opinion as to the difficulty of content moderation generally"

    I howled with laughter as I read that. Isn't the impossibility of good content moderation at scale also called "Masnick's Impossibility Theorem"? Such silly lawyers.

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

    • identicon
      bob, 12 Nov 2021 @ 2:40pm

      Re: This made me audibly laugh out loud

      Reminds me of the movie Liar Liar

      Fletcher: Your Honor, I object!
      Judge: Why?
      Fletcher: Because it's devastating to my case!
      Judge: Overruled.

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

    • identicon
      Anonymous Coward, 12 Nov 2021 @ 6:53pm

      Re: This made me audibly laugh out loud

      How recognized is Masnick's Impossibility Theorem, though? Not to knock on Mike's work in the field, but I imagine it's not as well-known as the Streisand Effect.

      That said, I agree that Atari trying to dismiss him on the basis of content moderation for a case on counterfeiting and vague relation to IP law is a bit rich.

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

      • icon
        That Anonymous Coward (profile), 13 Nov 2021 @ 6:12pm

        Re: Re: This made me audibly laugh out loud

        It depends on your circles in the world, but to claim he "cannot offer an opinion as to the difficulty of content moderation generally" when its been a fscking featured post here more than a couple times is ludicrous.
        Perhaps they did research on some other Mike Masnick & got confused.

        We're sorry TAC can't give testimony about copyright trolls tactic, he's not qualified. o_O

        Something something haven't sucked enough dicks to rate if its a pretty penis or not? Exactly what is the required number to be an expert in this way?

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

        • identicon
          Anonymous Coward, 14 Nov 2021 @ 4:33pm

          Re: Re: Re: This made me audibly laugh out loud

          to claim he "cannot offer an opinion as to the difficulty of content moderation generally" when its been a fscking featured post here more than a couple times is ludicrous

          Oh, you'll find no disagreement from me on that point. I still find it strange that IP lawyers use content moderation as a basis for denying someone's testimony in a counterfeiting case, but it's probably a sign that copyright enforcement genuinely has its fingers in every goddamn pie.

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

          • icon
            That One Guy (profile), 14 Nov 2021 @ 7:09pm

            Re: Re: Re: Re: This made me audibly laugh out loud

            Depending on what arguments you're planning on presenting it's not that unexpected actually, if for example you want to argue that the platform should be held liable for offering 'counterfeit' items because a user posted a potentially infringing work then someone with knowledge on moderation of large platforms is someone you definitely don't want to be talking in front of a jury.

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

          • icon
            That Anonymous Coward (profile), 14 Nov 2021 @ 8:12pm

            Re: Re: Re: Re: This made me audibly laugh out loud

            Its the fear that common sense might finally get a seat at the table.

            Lawyers, clients, talking head, Congress often scream how easy it would be if they just tried harder... but not a single one of them can offer up anything beyond 'we think it should be easy so for you to claim otherwise is you knowingly profiting!'.

            Content ID is the best poster child for this.
            It sucks on ice.
            Yes it can detect things, but the accuracy is shitty.
            Silence on your video, yanked for "stealing" the 3 min musical thing.
            Something put into the public domain that they put on a news program, suddenly they get to own it forever.
            A fscking wild birdsong, its our rock music we checked twice!

            It plays within the law which is heavily weighted in favor of anyone who claims they own the content, its constantly gamed, & when they are wrong... oh well. Where if the system was weighted more towards users, there would be billions of damages on the table in seconds.

            Content moderation is a shitshow.

            The lawyers claiming Mike knows nothing about this lied to the court. (period, full stop, move for sanctions level of lying)

            There is so much covered by copyright currently that it would take the entire planet to have enough people to review everything, then a huge team of lawyers to consider if it is fair use, then protracted bullshit legal cases where to exercise your rights costs the GDP of some small nations... oh and you don't get paid back by the person who was wrong, but if you were wrong we win the GDP of midsized nations.... because you didn't add enough cat emojis to transform the image... but 3 more you;d have been okay.

            Content ID has a database of content its supposed to "protect", where is the easy to scan & match database of trademarks?
            Or do they think its possible for a human to navigate the state of the art (in the 1940's) trademark database against every image submitted to be put on a cup/bottle/shirt/tote/etc?

            Its sort of sad that with copyright being so super important & valuable for some reason the burden and cost always fall to everyone else to protect them & yet they demand we give them more when they've done nothing.

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

            • identicon
              Anonymous Coward, 15 Nov 2021 @ 3:12am

              Re: Re: Re: Re: Re: This made me audibly laugh out loud

              There is so much covered by copyright currently that it would take the entire planet to have enough people to review everything,

              Even that would not be enough, as nobody can be familiar with all works under copyright, or review all new works. Long gone are the days when a few books would be able to list all works published in a given year.

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

              • icon
                That Anonymous Coward (profile), 16 Nov 2021 @ 12:40am

                Re: Re: Re: Re: Re: Re: This made me audibly laugh out loud

                In my head I was breaking it all into smaller units & requiring each person to only understand their small portion.

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

          • icon
            Scary Devil Monastery (profile), 15 Nov 2021 @ 6:52am

            Re: Re: Re: Re: This made me audibly laugh out loud

            "I still find it strange that IP lawyers use content moderation as a basis for denying someone's testimony in a counterfeiting case..."

            You can, by now, assume that as a rule if it concerns either copyright or a trademark case on flimsy grounds the very first thing the plaintiff will do is to attempt to ban every possible actual expert from testifying.

            Every copyright case and quite a lot of trademark cases depend on facts not being present at the ruling.

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

        • icon
          charliebrown (profile), 14 Nov 2021 @ 9:01pm

          Re: Re: Re: This made me audibly laugh out loud

          haven't sucked enough dicks to rate if its a pretty penis or not?

          Now that made me audibly laugh out loud!

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

        • icon
          Scary Devil Monastery (profile), 15 Nov 2021 @ 6:55am

          Re: Re: Re: This made me audibly laugh out loud

          "Something something haven't sucked enough dicks to rate if its a pretty penis or not?"

          Sheesh, TAC. You're thinking about the Perfect 10 and Malibu Media shit-shows, not Atari.

          Unless their portfolio includes hentai games?

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

          • icon
            Samuel Abram (profile), 15 Nov 2021 @ 11:01am

            Re: Re: Re: Re: This made me audibly laugh out loud

            Believe it or not, there were Atari porn games. [Note: you must be over 18 to access link]

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

          • icon
            Samuel Abram (profile), 15 Nov 2021 @ 11:05am

            Re: Re: Re: Re: This made me audibly laugh out loud

            Actually, that was a bad link. Here's a link to a montage of Atari porn games.

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

          • icon
            That Anonymous Coward (profile), 16 Nov 2021 @ 12:43am

            Re: Re: Re: Re: This made me audibly laugh out loud

            did we forget Yaoi is more my speed?

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

            • icon
              Scary Devil Monastery (profile), 17 Nov 2021 @ 6:16am

              Re: Re: Re: Re: Re: This made me audibly laugh out loud

              "did we forget Yaoi is more my speed?"

              It can, admittedly, be a bit hard to tell from the blocky look of the old atari games, but I'm fairly sure they weren't that big on inclusiveness outside of the cis paradigm. Although they did try to squeeze some more money out of their porn offers by launching the same game twice with genders reversed...

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

              • icon
                Scary Devil Monastery (profile), 17 Nov 2021 @ 6:17am

                Re: Re: Re: Re: Re: Re: This made me audibly laugh out loud

                [edit]

                Should have been "...but I'm fairly sure they weren't that big on inclusiveness outside of the cis/hetero paradigm."

                Mea Culpa.

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

                • icon
                  That Anonymous Coward (profile), 18 Nov 2021 @ 2:25am

                  Re: Re: Re: Re: Re: Re: Re: This made me audibly laugh out loud

                  Oh pookie, don't take me so seriously sometimes.

                  You said hentai and I pointed out yaoi would be more my speed.
                  Nothing mean behind the comment, not offended.
                  (Trust me most people have seen TAC offended and you can't miss it from space).

                  Something something a porn game based on Custer and they thought it was a good idea.

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

                  • icon
                    Scary Devil Monastery (profile), 18 Nov 2021 @ 2:58am

                    Re: Re: Re: Re: Re: Re: Re: Re: This made me audibly laugh out l

                    "You said hentai and I pointed out yaoi would be more my speed."

                    Ah. Well, for future reference..."hentai" just means "lewd" or "perverted". So it covers anything pornographic. Behavior, feature film scenes, porn movies, and of course in manga and anime;
                    Yaoi, Yuri, Shounen Ai, Shoujo Ai...and all the weird offshoots exploring erotics beyond what is normally possible, including tentacles, vore, etc....that's all just subcategories.

                    A girl talking about a lecherous person might refer to them as baka hentai (stupid pervert) or just hentai (pervert). Categories of R18+ entertainment will be labeled hentai no matter what the subcategory. And so on.

                    Not to be confused with the far tamer ecci which just means naughty and tends to mean the work in question contains a lot of fanservice in the form of suggestive but not explicit scenery. I think Japan may have a law which states that this must include close-ups of female underwear.

                    Hrm...not that I'd know much about any of that, naturally. Yup. Boring old straight white cis-male, me...

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


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