Online shopping is here to stay, and so are trademark concerns for e-commerce shopping platforms. However, platforms and service providers lack clear precedent on when they are responsible for trademark infringing activities by third parties, whether and to what extent platforms must search for and actively police product listings, and requirements for soliciting and responding to trademark-related takedown requests. While the Digital Millennium Copyright Act of 1998 ("DMCA"), provides guidance on a platform's liability for copyright infringement and service providers have terms of use governing user generated content and conduct occurring on platforms, a platform's liability for trademark infringement is often fact-specific. This article summarizes important aspects in the current landscape of platform trademark liability.
There is some precedent for platforms falling outside the bounds of direct trademark infringement. For example, the Federal Circuit declined to find a traditional shopping platform liable for direct trademark infringement, noting that platforms merely facilitate sales between other parties and often do not take title of the products.1 The Second Circuit reached a similar conclusion in Tiffany v. eBay, finding that a platform's knowledge of counterfeit goods available on its platform is not a basis for direct trademark infringement.2 This supposes that the platform operates as a passive facilitator, which merely lists and facilitates delivery of third-party goods. However, in Ohio State University v. Redbubble, the Sixth Circuit determined platforms that are more involved in procurement of counterfeit goods may be liable for direct trademark infringement.3 The court noted that a platform's liability can fall on a spectrum depending on the platform's involvement in providing the goods in question and reversed a grant of summary judgment for Redbubble on the question of direct trademark infringement. The court observed that once an order is placed, Redbubble hires third-party providers who manufacture and ship the product, and the product comes shipped with a Redbubble hang tag, in Redbubble packaging, and shows Redbubble's address as the return address. Under those facts, Redbubble was deemed to be more than a passive facilitator and could be liable for direct trademark infringement.
Allegations of contributory trademark infringement by platforms introduce additional uncertainty. Contributory trademark infringement occurs when (1) a party intentionally induces another to infringe a trademark, or (2) when a party continues to supply a product knowing or having reason to know that the product is infringing a trademark.4 In Tiffany v. eBay, the Second Circuit held that ecommerce platforms "must have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods."5 In other words, liability rests on the platform's awareness of particular products that are infringing a trademark and failure to remove those listings. In Y.Y.G.M.A. v. Redbubble, the Ninth Circuit similarly held that platforms must be "aware of specific instances of infringement or specific infringers."6 The court added that platforms are not required to actively search their product listings and identify instances of trademark infringement. However, once the platform is aware of specific instances of infringement, it is required to take "bona fide efforts to root our infringement," which "will vary based on context."7
Copyright law may provide guidance, as some platforms have used similar notice-and-takedown practices for trademarks as those in place for claims of copyright infringement.8 Under the DMCA, platforms may qualify for safe harbors that shield them from contributory copyright liability stemming from third-party content if certain threshold conditions are met. To qualify, the platform must at least (1) designate a DMCA agent with the U.S. Copyright Office, (2) implement a repeat infringement policy, (3) manage notice and take-downs, (4) not financially benefit from the infringing activity, and (5) not have actual knowledge of the infringing activity.9 However, the DMCA is expressly limited to copyright and following DMCA practices for trademark matters does not provide any statutory safe harbor. With that said, for those providers of online shopping platforms, it may be prudent to seek legal counsel to establish a fair and effective takedown policies and review IP policies and practices to try to reduce potential exposure to liability under trademark law.
Baker Botts continues to monitor this area of law and counsels its clients on effective practices for defending allegations of trademark infringement.
Footnotes
1 Milo & Gabby LLC v. Amazon.com, Inc., 693 F.App'x 879 (Fed. Cir. 2017).
2 Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 103 (2d Cir. 2010).
3 Ohio State University v. Redbubble, Inc., 989 F.3d 435, 447-48 (6th Cir. 2021).
4 Inwood Labs., Inc. v. Ives Labs., Inc, 456 U.S. 844, 854 (1982).
5 Tiffany, 600 F.3d at 107.
6 Y.Y.G.M. SA v. Redbubble, Inc., 75 F.4th 995, 1002 (9th Cir. 2023),cert. denied,144 S. Ct. 824 (2024).
7 Id. at 1003.
8 Tiffany, 600 F.3d at 99.
9 See 17 U.S.C. § 512.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
