A screenshot from one of the documents recording the Jury's verdict
(WEB HOST INDUSTRY REVIEW) — A ruling delivered by a jury last week in a South Carolina counterfeit trial found web hosting provider Bright Builders Inc. liable for $770,750 in damages for contributory infringement, in a case against a customer website, according to a report posted this week on the website law.com.
The ruling, delivered by South Carolina District Judge Margaret Seymour on March 14, should be notable to hosting providers, who tend to rely on a certain protection from liability for the activities of their customers.
In this particular case, lawyers for the plaintiff were able to demonstrate that Bright Builders was aware of the client’s activity, in spite of the fact that no notification had been sent prior to the lawsuit being filed.
The hosting provider’s client, Christopher Prince, and his company Prince Distribution LLC, was sued by Roger Cleveland Golf Company Inc. for copyright infringement. Prince, according to court papers, operated a website called copycatclubs.com that appeared to willfully and surprisingly unabashedly engage in infringement, claiming to be “your one stop shop for the best copied golf clubs on the Internet.”
Prince was found liable for $20,250.
The jury found both Prince and Bright Builders liable for Prince’s website according to the South Carolina Unfair Trade Practices Act, reaching a judgment based on the infringement of 11 of Cleveland’s Golf’s registered trademarks, plus interest.
Most interesting in this case seems to be the decision that Bright Builders had been found liable for failing to act when it discovered the infringing activities of its customer.
Cleveland Golf’s lead counsel Christopher Finnerty, of Nelson Mullins Riley & Scarborough said the company originally filed the suit against Prince and his company, and amended the complaint to also name Bright Builders as a defendant after discovering the company’s role during the initial deposition.
For hosting providers, and other service providers, the ruling is an indication that if the company knows, or should know, about the infringement, they may be required to act, rather than waiting for the brand’s owner to notice, and contact them.
The ruling, if it is understood to be a precedent in future cases of this kind, doesn’t require service providers to outright police their users’ content, but it would seem to require them to act on illegal activity, should they become aware of it.
A PDF copy of the jury’s ruling is located here.
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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