A federal court in California has held two web host companies and the person who controls them liable for trademark and copyright infringement on one of their customer’s website. The Digital Millennium Copyright Act limits a web host’s liability for copyright infringement by its customers. However, a web host can be held liable for its customers’ copyright infringement if it knew about the infringing activity and did not act expeditiously to put a stop to it.
This particular case involved the popular designer of luggage and hand bags, Louis Vuitton. Louis Vuiiton is no stranger to trademark and copyright infringement. Knock offs of its famous logo and designs can be found on street corners and stores all over. In this particular instance, it was a website that was allegedly offering Louis Vuitton knock offs for sale. Louis Vuitton filed a claim against the companies hosting the website. The jury found the two companies and the individual who controlled them liable to the tune of $32.4 million.
It’s easy to think that of course a web host should know what to do if it is notified by a trademark owner that another company is infringing its trademarks: take down the infringing customer’s website, of course! However, it’s not that simple. Web hosts are often placed in a difficult position when they are notified of a possible copyright or trademark infringement. Sometimes the infringement is clear, but more often than not it is not so obvious that the activities of its customer are illegal. The web host has to make a decision (much like a judge in a court of law would have to, but without the authority and protections afforded to judges) whether it believes that the activities of its customer constitutes infringement. This is a huge and difficult burden for web hosts. If it does not take down its customer’s site, it could be held liable in a law suit by the trademark owner, as the web hosts in the Louis Vuitton case were. If it takes down a customer’s site, it could face a law suit from its customer for the damages caused by taking down the web site. It’s basically a no win situation for the web host because ultimately only a judge has the legal authority to decide whether something constitutes infringement, yet the law requires web hosts to make such a judgment call and holds them responsible if a judge determines that they made the wrong one.
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