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:
First, please read eBay¹s User Agreement and Fee Structure.
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:
Please read eBay¹s infringement
policies: (1) VERO program, (2)
NOCI
form and (3) ³Against
Counterfeits² page.
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?