Louis Vuitton – the high-end fashion retailer - has been awarded damages in excess of $30 million dollars for willful trademark infringement and $900,000 for willful copyright infringement. The infringers were a pair of website hosting companies. After repeated requests for removal of the infringing web sites went ignored, Louis Vuitton filed action for contributory trademark infringement and copyright infringement against the service providers.
The defendant’s raised the defense of immunity under the Digital Millennium Copyright Act’s (DMCA) safe harbor provision, which exempts online service providers from claims of copyright infringement as a result of the actions of their customers. However, the DMCA only creates a safe harbor for online service providers against copyright liability if they adhere to and qualify for certain safe harbor guidelines and promptly block access to or remove allegedly infringing materials upon notice of the infringement by the copyright holder. Under the DMCA, if the service provider fails to immediately remove the infringing copyright protected materials, the service provider may be subject to a claim of direct copyright infringement.
Although the defendants did not commit direct copyright infringement of the Louis Vuitton merchandise, they hosted the web sites that did. And once placed on notice of the ongoing copyright infringements, they failed to take action as required under the DMCA. They were also found to have control of the infringing web sites. Thus, were found to have commited contributory trademark infringement. To be held accountable for the infringing acts of others, defendants must know - or they should have known - that a third party’s actions constitute an infringement and must have provided substantial assistance to the direct infringers.
What this case demonstrates is that the DMCA’s safe harbor provision does not permit service providers to ignore copyright infringements taking place on their servers once properly notified. To do so may result in large damage awards as seen in this case.