Louis Vuitton claims victory and major damages against Internet service providers in landmark counterfeit lawsuit – 01/09/09

US. LVMH-owned Louis Vuitton Malletier has been awarded US$32.4 million in damages following a lawsuit filed in 2007 against the web host of sites that sold Louis Vuitton counterfeit merchandise.

California-based Internet hosting business Akanoc Solutions, Managed Solutions Group and Steven Chen (“˜the Akanoc defendants’) were found liable for contributory trademark and copyright infringement by the US District Court, Northern District of California (San Jose) on 28 August.

The court is expected shortly to issue a permanent injunction banning the Akanoc defendants from hosting websites that sell counterfeit or infringing Louis Vuitton goods.

Louis Vuitton Intellectual Property Director Nathalie Moullé-Berteaux said: “We are very pleased that the jury recognised the Akanoc defendants’ contributory liability. This decision is another important step towards reducing the illegal activity of websites selling counterfeit merchandise and enforcing the rule of law on the Internet.

The Akanoc defendants’ business model of providing unmanaged server capacity to web hosting resellers does not exempt them from taking steps to prevent infringing activity upon notification from an intellectual property rights owner, the court found. This case is said to be a particularly important one in that it involves the successful application on the Internet of the theory of contributory liability. This means that those who know or should have known that the business operations for which they provide venues, are conducting illegal activities, have an obligation to ensure those business operations are legal.

Moullé-Berteaux added: “The size of this award should make it clear to all Internet Service Providers (ISPs) that they cannot act, or fail to act, with impunity when a trademark owner provides notice that websites hosted by the ISP are selling counterfeit goods. We believe the size of the damages awarded should serve as a deterrent to other ISPs who may consider ignoring counterfeit trade on the websites they host.

“Louis Vuitton will continue its fight throughout the world-concrete and virtual- to protect its brand and customers against counterfeiting.”

Louis Vuitton’s counsel Andy Coombs said: “This verdict clearly establishes a standard for infringement complaints on the Internet based on trademark. It represents a positive contribution to existing case law and marks the first time statutory damages have been awarded against those found contributorily liable for trademark infringement.

“The standard applied to copyright infringement claims must also be applied to trademark infringement claims. The jury recognised that having an appropriate use policy is not sufficient. ISPs have an obligation to effectively enforce that policy as well.”


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