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Web Hosts Hit With $32 Million Judgment For Content
mikesd81 tips news that a California jury has found two web hosting companies liable for "contributing to trademark and copyright infringement" after hosting web sites that sold counterfeit Louis Vuitton items. Both companies are owned by the same man, Steven Chen, and are being ordered to pay $32 million in fines. A similar judgment for $61 million went against eBay last year for facilitating the sale of counterfeit Louis Vuitton merchandise.
"The US District Court for the Northern District of California is expected to issue a permanent injunction banning the internet service providers from hosting Web sites that selling fake Louis Vuitton goods in the future, the company said. Attorneys for the luxury goods maker said in a statement that the case is the first successful application on the internet of the theory of contributory liability for trademark infringement. Under this theory, companies that know, or should know, that they are enabling illegal activities have an obligation to remedy the situation. Entities that fail to do so, as Louis Vuitton alleged in this case, can be held legally responsible for contributing to the illegal activities."
The government has wiiiiiiiiiiiiiiide powers to regulate commerce. I'm not really concerned if they mess with sites linked by money to the real world- it doesn't stop the flow of information.
So...if I sell Cisco gear, and it turns out that I wind up with counterfeit Cisco gear, they could argue that because I know what real Cisco gear looks like I should be able to identify any counterfeit Cisco gear. Then Cisco can come in and slap me for some unholy sum for "should have known". I wonder how much they lose in sales due to cheap counterfit equipment. I mean, arguably, someone buying a cheap counterfit is not likely to pay the full price for a real one, so it is pretty difficult to call all of it lost sales. So...now there is an active disincentive to protect your goods from counterfit. Instead of worrying about counterfit, they can just go sue the shit out of anyone selling counterfit to people who probably wouldn't have purchased an original anyways. Thus turning a bunch of non-sales into revenue. This is just fucking brilliant.
The only change I can believe in is what I find in my couch cushions.
If the landlord knew his property was being used to make drugs and did nothing about it, potentially yes, he would be at risk from prosecution.
This is being widely discussed in the hosting industry. The full jury ruling is online, and there's additional analysis and discussion at the Web Host Industry Review, TechDirt and Data Center Knowledge.
...and put all the lawyers, hairdressers and managers in it?
You need to dig a bit (it's mentioned in the seventh paragraph of the linked article, with a more detailed discussion on the second page), but basically the ISP in question failed to take action to shut down the hosted sites despite repeated takedown notices from Louis Vuitton. The only real precedent that this sets if you ask me is a very positive one in that if your "abuse@" email is a blackhole then you had better have extremely good liability cover and/or be very hard to reach to avoid being served with lawsuits.
UNIX? They're not even circumcised! Savages!
This isn't the store, it's the not even the relevant "mall". It's the REIT that holds the mall.
If you are not co-located with the offending physical store presence, how are you supposed to know it's counterfeit?
A Pirate and a Puritan look the same on a balance sheet.
They further said that Chen and his companies had been informed of the activity by Louis Vuitton but still refused to implement a policy for removing the offending sites, which was their responsibility.
:
If true, then they got it coming their way. You do not willingly ignore that one of your customer do illegal activity when it has been reported to you.In addition
Under existing precedent (outside of the Internet realm) a plaintiff seeking to prove contributory trademark infringement needs to prove that a defendant intentionally and knowingly enabled another to infringe a trademark, Johnson said. In this case, the jury appears to have been convinced by the evidence presented by Louis Vuitton that the Web hosting companies had clear knowledge of the infringing activity, he said.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
How long until we see a mass movement of hosting facilities to other states and countries? This is really scary. I don't mind the fact that hosting facilities are now liable a lot more than before, but the court just _forced_ hosting providers to become judges of who is in breach or not of copyright. No sane hosting provider will ever protect its customer from for instance the laywers of MS. Practically any content you have can, one way or the other, be twisted into a copyright infringement by a clever lawyer. You can be shut down at any time without any chance to protect yourself. Yikes!
It wasn't "they should have know", it was "they were informed and ignored the warnings". Big difference.
There needs to be a new law that operates similar to the DMCA safe harbor and take-down notice system works for copyrights. If Louis Vitton thinks that someone is selling a fake Louis Vitton bag on, say, eBay, they would send eBay a take down notice alleging (under penalty of perjury) trademark/trade dress infringement. eBay then takes down the auction when notified (and in doing so is given safe harbor from any infringement connected with the auction). And just like the DMCA take-down notice system, if the take-down is baseless (i.e. no violation has taken place), the item can be re-listed (or the information can be re-posted or whatever). And just like the DMCA, when you file a counter claim, you are alleging (under penalty of perjury) that no violation has taken place.
sites get protection from being sued for allowing items/content/etc that violate someones IP to be listed/sold/posted/etc
Companies who's IP is being violated have a simple way to get infringing content/auctions/etc taken down (but only if its actually infringing)
And those who are selling legitimate items that DON'T violate someone else's IP (such as a genuine Louis Vitton bag) are free to go on selling without the risk of having their legit auction pulled.
"... or is it more a sort of handbag, really?"
Seems that now anyone who provides a service can be held liable for illegal activities from its users.
You know, it's unfeasible to keep control of user content. An automated system can only detect so much, and may block legitimate content. Having employees responsible of verifying the user content would cause delay and extra costs to the service provider. Even so, it would still be possible to ignore these measures by requiring authentication.
They would need both an advanced AI/an army of moderators and destroy all privacy to make sure no user content is infringing laws. Very unlikely to happen.
The good, the evil and the vacuum tubes.
I get the distinction, but businesses "get informed" all the time about all manner of stuff, much of it bogus. If all it takes to establish liability is for the plaintiff to send me an email claiming something that sets the bar pretty low. How much investigation would the court recognize as appropriate? What if I investigate and I determine that the accusation is without merit and they sue anyway? Do I have to investigate every complaint no matter how ridiculous and no matter the cost, to establish that I dont arbitrarily enforce? And so on. At least with DMCA there is established procedure and dispute resolution that can hold the plaintiff to some standard of proof. This is casting a pretty wide net and has pretty significant implications for extending liability *way* beyond the crime itself. If I were an ISP I'd be moving my servers offshore as we speak.
I had to look it up..
http://en.wikipedia.org/wiki/Real_estate_investment_trust
Thus only large uber-corporations will provide ISP\Web hosting with strict controls putting the Internet solely in the hands of multinationals that can afford the risk.
Freedom takes another blow and more and more of the Internet as we knew it vanishes. Soon there will be nothing left except big business and big government on the Internet... or whatever you want to call what it has become...
I'm not big on conspiracies but all these dominos falling seem a tad too corrdinated for my tastes...
Step 1: Gain control of communications
Step 2: Commoditize communication
Step 3: Litgate liability
Step 4: Censor in the name of controlling liability
Step 5: Control the flow of information
Step 6: Persecute, I mean prosecute those who share 'dangerous and subversive' information
Hilter, Stalin, and Mao would be proud of the direction we are headed... The Internet was a great dream and a place for freedom. Now there are so few dominos left to fall before that dream lies dead...
-=[ Who Is John Galt? ]=-
Can we please stop making reference to the Digital Millenium Copyright Act in this discussion? The case in point concerns trademark infringement. The DMCA does not apply to this.
And for all those who say, "oh, but what if I get a phony notice," how hard is it to verify that someone is a licensed Louis Vuitton distributor? I'd agree that simply looking at the site may not be sufficient to determine whether the hosting client is engaged in trademark infringement, but the site's owner should at least be able to demonstrate that he or she is a licensed distributor.
I'm on Vuitton's side in this one.
The DMCA covers copyright law, not trademark law. Trademark infringement is still decided by a court, not via email.
Loius Vuitiion (or whatever the hell his name is), makes an over-priced, uber-expensive handbag, and then complains when knock-offs come around? Isn't that capitalism? I also notice that this dude and his bag of lawyers sue or jail everyone selling the stuff.
But not the guys making the stuff.
Because his handbags come out of the same Chinese factory as the knock-offs. That's why most people will never notice that they *are* knock-offs. During daylight hours, the factory produces legitimate "on the books" merchandise, and then the night shift takes over, making the exact same stuff, but "off the books", which are then sold cheap, and shipped off to the rest of the world.
Legitimate copyright holder screams bloody murder, and sues and jails everyone, except the factory, who have already made their profit by selling the knock-offs to the distribution channel. And the guy can't sue or jail the factory in China, because during the day, they make his "real" merchandise.
The Chinese have figured out capitalism pretty well for a communist country. They've got capitalsim down better than the USA, that's for sure.
If telephones are outlawed, then only outlaws will have telephones.
Noticing how many posts are from people making references to the DMCA, despite this case being about a trademark, shows to me that the 'intellectual property' campaign to confuse people and treat information like property, and to blur the difference between patents, trademarks, and copyrights, is having success and is helping destroy society.
http://www.gnu.org/philosophy/not-ipr.html
Despite the belief of Slashdot, most companies don't get to the point of a $32 million dollar lawsuit without trying some fairly rigorous steps to prevent getting to that point. Nor do judges tend to make decisions about "should have known" without at least "some" evidence that this was the case. Hell no one has even tried this one against a file sharer or torrent site, and I'm sure some lawyers thought about it.
The premise for cases like this is that deliberate ignorance is not a defense. You can't do a house inspection walk through the basement and pretend that the meth lab isn't there, you know it's there and you're responsible for doing something about it.
Heck, come on down, you can find a great ISP for less then 100USD per year and do whatever the heck u want to do. The servers are all located/mirrored in the US, so speed is great, and there are no restrictions. Oh, by the way, we get all our Louis Vuitton on the street here, there are vendors almost 24x7 selling stuff there, no shipping and handling required.
I think therefore I can't be ~TTNH
Did Defendants prove by a preponderance of evidence that they are service provides [sic] who acted in a manner that entitles Defendants to the "safe harbor" provisions of the Digital Millennium Copyright Act?
the jury answered "no" for all three parties, including the service provider. They considered the DMCA and rejected that defense.
It looks to me like this is a lot of people getting upset over nothing; to the best I can tell (without access to other court documents), the host blatantly ignored DMCA-like steps to mitigate the situation, acted willfully to support the copyright infringers, and got financial compensation for doing so. Justice was served.
To John's Paint Store:
We believe your customer, Mr David Jones, is using your paints to create signs which violate our trademarks. You are to cease and dissist from providing him with such paints or we will sue you for contributory infringement.
Sincerely:
so-and-so, Lawyer for Acme Industries, Inc.
Same? Different? On what basis?
LedgerSMB: Open source Accounting/ERP
I dont disagree but I was expressing concern as to what constituted "deliberate ignorance". Obviously the prosecution and defense will differ wildly on what rises to the level of "deliberate" and "complicit". Claiming a service provider that implicitly enables a crime *might* be a steep slippery slope. Do we go after the software vendor that supplied the shopping cart service? How about Firefox for not blocking the site? How about Visa and Mastercard for processing the payments? Comcast for not blocking the site? I hope that in this case the court found that the ISP was particularly deliberate rather than just the easiest to prosecute.
The Hitchhiker's Guide To The Galaxy has a few things to say on the subject of Hand Bags. . .
"A handbag, it says, is the most massively useful thing an intergalactic hitchhiker can have. [Insert witty Adams-isms about the usefulness of hand bags here.] [. . .] thus leading to The Great Counterfeit Hand Bag Crisis of the early twenty-first century. The judges, lawyers and general rif-raf of the legal profession as it happened all had wives who were partial to their expensive accessories and none too pleased to see cheap knock-offs of their own fashionable handbags being carried about by simply EVERY other woman on the street. As such, the wives exerted their collective will toward the task of making their husbands entirely miserable until something was done about this altogether offensive state of affairs. Now, as is well recognized that the collective might of any large group of truly unhappy women is approximately equal in its force upon a planetary culture as a prolonged, large-scale military engagement, it was not long before the crime of hand bag counterfeiting was elevated to the very top of the list of humanity's most heinous mis-doings, right up there with the really bad stuff, --like listening to music without a license, and forcing children to make handbags and other fashion accessories in musty sweat-shops. Indeed, handbag counterfeiting and listening to music without a license were swiftly and severely punished leading to the establishment of a planet-wide police state. And while sweat-shop labor received somewhat less attention, it was nonetheless strongly frowned upon; people would shuffle while looking at their shoes and utter things like, "Oh, yes, well that's simply terrible, that is! Simple terrible." Indeed, it was considered altogether so terrible that it was often considered wise to simply not mention it at all, particularly when attending those swank gatherings where the finest handbags were on display."
-FL
Because society has penalties for making false claims. We need to give those provisions teeth again, and we could then start to trust them.
It is merely out of balance with the penalties for not acting when the claims are valid.
The only time I take down a site that "supposedly" is infringing on a copyright is if I have a court order forcing me to do so.
I get tons of emails, phone calls and letters from lawyers telling me I have to shut down website xyz.com because they "may" be infringing on their clients copyrights.
Kiss my ass!!! How do I know your client isn't infringing on my clients copyright???
How do I know you're not some asshat competitor trying to get the site shut down???
Point being, is that if the judge ordered them to shut down the site and they didn't then yes, they are liable. But if there is no court order enforcing this, then they can appeal and most likely overturn that case.
The day Microsoft creates a product that doesn't suck, it will be known as the Microsoft Vaccuum Cleaner!