Credit-Card Processors May be Held Liable for Contributory Trademark Infringement in Gucci Counterfeit Suit
By Sharona Hakimi – Edited by Matt Gelfand
Gucci America, Inc. v. Frontline Processing Corp., No. 09 Civ. 6925 (HB) (S.D.N.Y. June 23, 2010)
On June 23, 2010, Judge Harold Baer of the U.S. District Court for the Southern District of New York denied a motion to dismiss claims of contributory trademark infringement brought by fashion label Gucci America, Inc. (“Gucci”) against a group of credit card processing companies. Judge Baer held that these credit card processing companies may be held liable for contributory trademark infringement under the test established by the Supreme Court in Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U. S. 844 (1982), and its progeny.
Applying the principles outlined in those recent trademark infringement cases, Judge Baer held that plaintiffs can sue companies that service websites that sell counterfeit goods if plaintiffs can show that defendants (1) “intentionally induced the website to infringe through the sale of counterfeit goods;” or (2) “knowingly supplied services to websites and had sufficient control over infringing activity to merit liability.” Although Gucci did not sufficiently plead direct or vicarious liability theories, Judge Baer allowed them to proceed under the theory that the defendants induced infringement and provided services to counterfeit sellers either knowing that its clients “traded in counterfeit products, or [being] willfully blind to that fact.”
The Intellectual Property Law blog provides a detailed summary of the case. Eric Goldman’s Technology and Marketing Law Blog summarizes the case and offers relevant excerpts. Ron Coleman’s Likelihood of Confusion blog analyzes the case and compares it with recent developments in contributory trademark infringement case law. (more…)