Retail Websites May Be Liable For Trademark Infringements

Back in April of this year I told you of the story of the SEO firm that was fined by a federal court for its role in online sales of counterfeit golf clubs. Now comes word that sites such as eBay may be liable for "playing an 'active role' in promoting counterfeit goods."

In my initial article the SEO firm Bright Builders Inc. was fined nearly $750,000 more than the company who actually produced the counterfeit golf clubs with the judge in the case ruling Bright Builders was guilty of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com.

As for the recent story re: eBay... the subhead in the article posted on The Guardian website: European court says online marketplaces can be held responsible for the infringement of trademarks on counterfeit goods they promote.

Now I realize this is dealing with sites doing business in Europe but you know it will impact and affect sites doing businesses in many other countries including the US.

The verdict in this particular case followed a series of cases brought by cosmetics and beauty giant L'Oreal across the EU to defend its brand name. In their complaint filed against eBay, L'Oreal claimed the online auction behemoth bought keywords via Google AdWords which were intended to direct eBay's users toward these counterfeit goods thereby infringing on the L'Oreal trademark. 

So, what does all this mean to marketers and advertisers?

Well in my original story, I included a quite from Christopher Finnerty, a lawyer for Cleveland Golf, the plaintiff in counterfeit golf clubs case:

“The jury found that web hosts and SEO's cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host."

In other words, if it smells like counterfeit, tastes like counterfeit.. you get the idea.

Sources: The Guardian, Google Images