Every now and then, a controversial issue triggers a flood of online discourse. For our Noise Filter feature, the WHIR pans the raging rivers of opinion for shining nuggets of useful commentary.
(WEB HOST INDUSTRY REVIEW) — Tuesday Morning, the WHIR ran a story about the verdict in a lawsuit brought by the fashion design house Louis Vuitton against a hosting provider it had accused of profiting from a customer site selling counterfeit versions of the company’s designer materials.
The jury in the case awarded Louis Vuitton $32.4 million in damages from the hosting businesses of Akanoc Solutions Inc. and Managed Solutions Group Inc., both operated by Steven Chen.
Following the announcement of the Jury’s decision, commentary began appearing online, the general consensus of which appears to be that the places too heavy a burden of responsibility on the service provider for the actions of its customers.
However, key to the jury’s decision was the belief that the defendants “knew or should have known” that the infringing activity was taking place.
According to a post on the New York Times fashion blog, the case is the most recent in a series of moves by the French fashion company to combat online sales of counterfeit items. Cathy Horyn writes:
Last year, in a French court, Vuitton won a $63 million judgment against eBay for its role in selling LV fakes. The online auctioneer has said it tries to police counterfeits and remove them from the site. It sounds as though juries don’t think that’s enough.
In a much more opinionated post on Tech Dirt titled, in part, “dreadful ruling,” Michael Masnick writes:
This is a bad end result no matter how you look at it. If you do any sort of web hosting, your liability just went up by a tremendous amount, and you may now be expected to proactively police all your customers’ websites for anything that might possibly be seen as trademark infringement. It’s safe to say that this is not what Congress intended — given the nature of the safe harbors it set up in the DMCA and the CDA.
In a somewhat more just-the-facts type story on Daily Finance, Sam Gustin does observe:
The ruling sends a clear — and mildly terrifying — message to internet service providers across America: you could be liable for counterfeit or otherwise infringing material sold by websites hosted on your servers — even if you try, but fail, to stop the activity.
In a post analyzing the case from much earlier in the year, law blogger Eric Goldman said:
All told, the contributory copyright infringement analysis in this case is heavily plaintiff-favorable. It appears that the plaintiff’s prima facie showing is (1) allegedly counterfeit goods being sold outside the host’s purview (the direct infringement), (2) demand letters plus emails from the host to customers relaying takedown notices (knowledge), and (3) the host’s ability to turn off accounts or disable IP addresses (material contribution). This is a disconcerting standard, because just about every web host could satisfy this test.
Goldman’s post was linked from a story on the ruling, appearing on Data Center Knowledge, in which Rich Miller points out:
Standard disclaimer: I am not a lawyer. But it seems that the Vuitton verdict is bound to focus additional attention on how hosting companies process and respond to complaints about problem content.
Miller also links an online copy of the jury verdict, and a document detailing a request by the defendants to have testimony concerning Akanoc’s reputation as a “bulletproof” disallowed as evidence.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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