Friday, September 30, 2011

Innovative Enforcement of Trademark and Copyright Infringement by LVMH

What to do when the trademarks and copyrights of your luxury products are infringed by Chinese companies that sell these products online to, for example, U.S. consumers. You can go after the source: using Chinese customs, the administrative, criminal or litigation routes. Another innovative way is to go also after the U.S. company that leases packages of server space, bandwidth and IP addresses to the infringing companies for contributory trademark and copyright infringement.

Global Challenge, Local Solutions

Exactly this is what Louis Vuitton Malletier did and confirms once again that this company is one of the most innovative companies in regard to the protection and enforcement of its intellectual property rights. The company takes it zero-tolerance principle and self-sustained protection/enforcement system serious.

Louis Vuitton versus Akanoc Solutions United States Court of Appeals for the Ninth Circuit, filed September 9, 2011, see here. Louis Vuitton Malletier was the plaintiff, and Managed Solutions Group (MSG), Akanoc Solutions and Steven Chen the defendants (San Jose, California, U.S.).

The Ninth Circuit instructs the District Court to award damages of 10,500,000 US dollar for contributory trademark infringement and 300,000 US dollar for contributory copyright infringement, for which Akanoc and Chen shall be jointly and severally liable.

One can question the validity of the decision by the Ninth Circuit to not instruct the District Court to order Managed Solutions Group to pay damages too, because of an alleged lack of "substantial evidence" to the jury. The Ninth Circuit: "We agree with the district court that no evidence presented at trial showed that MSG operated the servers that hosted the direct infringers’ websites. Even assuming that the direct infringers could be construed as MSG’s customers, Louis Vuitton presented no evidence that MSG had reasonable means to withdraw services to the direct infringers."

However, after Louis Vuitton discovered that the websites were using IP addresses assigned to defendants MSG and Akanoc, I am sure that they both received Notices of Infringements. So both had an actual or constructive knowledge about the infringements. Plus Chen managed both MSG and Akanoc. According to the defendants, MSG leased servers, bandwidth, and some IP addresses to Akanoc. So the means to withdraw seem self-evident, because MSG could simply have severed the bandwidth or stopped the functionality of the server, once it knew what was happening on the severs it was leasing to Akanoc.

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