I. Trademark Basics
A. What is a trademark?
Trademarks protect the identification of source of goods and/or services used in commerce. Please read pages 3-6 of William M. Borchard's "A Trademark is Not a Copyright or a Patent" carefully for a basic overview of trademark law. Pay specific attention to the ³Remedies for trademark counterfeiting² section on pages 5-6.
B. What is trademark infringement?
As the Borchard article explains, ³It is an infringement for someone else to use the same or a confusingly similar term or design, on the same or closely related goods or services...² Infringement can be direct, i.e. person A uses a mark that is the same or confusingly similar to person B on the same or closely related goods or services. However, individuals can also be held liable for trademark infringement if they are not themselves infringing, but are encouraging or enabling others to infringe. This is known as secondary liability for trademark infringement.
II. Secondary Liability
There are two recognized types of secondary trademark liability: contributory infringement and vicarious liability. Courts often use them interchangeably, despite the fact that different criteria are required for each.
A. Contributory Trademark Infringement
Under Restatement (Third) of Unfair Competition § 27 (1995), liability for contributory infringement is imposed when the actor:
1. ³intentionally induces the third person to engage in the infringing conduct; or . .
2. fails to take reasonable precautions against the occurrence of the third person's infringing conduct in circumstances in which the infringing conduct can be reasonably anticipated.²
In Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982) (please read only the majority opinion, pages 845-859) the U.S. Supreme Court stated that contributory trademark liability is found when a plaintiff successfully shows that the defendant either:
1. intentionally induced another to infringe a mark or
2. continued to produce or supply its product while knowing or having reason to know the recipient is engaging in trademark infringement.
The standard covers providers of a service as well and is not limited to manufacturers of products. Therefore, if the service is used to engage in trademark infringement while the provider knows or has reason to know of such activities, liability attaches to the provider of the service.
B. Vicarious Trademark Infringement Liability
The theory of vicarious liability for trademark infringement is based on the agency theory of respondeat superior. As the 7th Circuit articulated in Hard Rock Cafe Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143 (7th Cir. 1992) (please read the entire case), vicarious liability occurs when the defendant and the infringer:
1. have an apparent or actual partnership,
2. have authority to bind one another in transactions with third parties or
3. exercise joint ownership or control over the infringing product.
Thus, liability attaches if the defendant can directly control and monitor the instrumentality used to infringe the plaintiff's mark.
III. Compare the Above ³Meat Space² Cases with US and French Cases Involving a Modern-Day Virtual Flea Market:
Next, please read Tiffany Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010).
Then, please read this article about LVMH v. eBay, Inc.,Tribunal de commerce, Paris, June 30, 2008.
Which court do you agree with?
Which court¹s result seems more like the result in the Hard Rock case, above?
In its discussion of secondary trademark infringement (part II of the opinion), does the Tiffany court seem to focus on contributory infringement or vicarious liability? If they had focused on the other form of secondary liability, what result?
IV. Pressure from intellectual property owners forced eBay to create a system better suited to deal with infringement:
The basic principals of trademark law require brand owners to police their marks. Should the fact that eBay profits from counterfeit transactions (see fee structure) mean eBay should have a heightened duty of care?
eBay ³won² at the Second Circuit. On remand, the district court held that eBay was not liable for false advertising, either. However, the litigation has had the practical effect of pushing eBay to enact numerous anti-counterfeiting procedures, as displayed above. Has eBay gone too far? Not far enough?
V. The Effect of Tiffany v. eBay on Secondary Liability for Copyright Infringement on the Internet
The Supreme Court stated in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 439 (1984) (a non-internet copyright infringement case), that secondary trademark infringement liability should ³be more narrowly drawn than secondary liability for copyright infringement,² because of the ³fundamental differences² between trademark and copyright law.
However, Viacom Int'l, Inc. v. YouTube, Inc., 718 F. Supp. 2d 514 (S.D.N.Y. 2010) (read pages 524-526 of the opinion), expressly adopted the ³specific² versus ³generalized notice² requirement from the Tiffany v. eBay decision, despite the fact that Viacom is a copyright case decided under the D.M.C.A. and Tiffany is a trademark case decided under the principals of trademark law.
Is the ³specific² versus ³generalized² notice doctrine the correct approach for handling massive, large-scale online infringement? Should trademark and copyright law have different standards for secondary liability for infringement as articulated in Sony or does the internet change the game?