Louis Vuitton Malletier wins $32.4 million dollars against Akanoc Solutions Inc. and Managed Solutions Group, Inc., two web-hosting companies, and their owner Steven Chen. A jury in the Ninth Circuit Court in California determined that defendants were guilty of Louis Vuitton’s contributory trademark claims on August 28, 2009. This decision in Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. et al will create more stringent processes for web-hosting companies to review any trademark-infringing third parties that they host on their sites.

After a summer of interning at Affliction Holdings, LLC in their Brand Enforcement Department, this verdict felt like true justice to me. I spent my summer sending several Cease and Desist letters to the both Akanoc Solutions and Managed Solutions Group to shut down counterfeit sites. Sending those letters was the only thing we could do since the registrants were mostly Chinese and our trademarks were not protected in China.  Other Internet Service Providers (ISPs), host the websites to registrants who buy the domain names to conduct activity on the internet,  had processes in place to take into the consideration any received C&D letters and take down infringing sites with sufficient evidence of the infringing materials from a trademark holder. It is easy to obtain information about who the ISP is of site with a simple Whois search online.  My personal favorite ISP was GoDaddy, who was very responsive and have effective policies in place to quickly take down any illegal websites. They would immediately respond and block any site about which I complained. I was quite persistent with my complaining – sending emails, faxes, and using good old snail mail and repeating that process if I didn’t hear back within a week. Akanoc Solutions and Managed Solutions Group never responded, so I was happy to hear about the decision.

How did Louis Vuitton prove its case?

It began action in August of 2007 claiming contributory trademark  infringement. To establish direct  infringement of a trademark, a plaintiff must show: (1) ownership of a valid trademark, and (2) a likelihood of confusion resulting from a defendant’s alleged infringing use. Applied Info. Sciences Corp. v. eBay, Inc., 511 F.3d 966, 972 (9th Cir.2007). The jury found that thirteen of the registered Louis Vuitton trademarks were directly infringed upon by these websites selling counterfeit products with Louis Vuitton trademarks. Contributory infringement involves a third party to direct infringer who knows of the infringement and supplies the means to infringe. The plaintiff must prove that there was a material contribution to the infringement and there was knowledge of the infringing activity. Sony v. Universal Studios Inc., 464 U.S. 417 (1984).  The jury found that the defendants provided the platform for the trademark infringement by providing the platform for these counterfeiting sites. The element of knowledge of the infringing activity was fulfilled by the countless C&D letters that Louis Vuitton sent to Akanoc Solutions, Inc. and Managed Solutions Group, Inc. that were left unanswered. Finding these two elements in defendants’ actions, the jury awarded damages in the amount of $31.5 million in contributory trademark infringement.

This decision if left standing on appeal is the answer to my brand enforcement prayers from this summer to force ISPs to set more stringent processes for analyzing C&D letters that they received from registered trademark holders. Their abuse departments will have to take every letter with the evidence supplied into consideration and take down infringing sites – meaning they will no longer ignore my many methods of notification. Although this verdict was extremely costly to ISPs without such a system in place, it can give fashion houses armed with their registered trademarks extra protection in the US against counterfeit websites.