Dreadful Ruling: Web Hosts Hit With $32 Million Judgment For Content On Customers' Websites

from the chilling-effects dept

Well, this is bad. We've worried in the past about the lack of a specific safe harbor to protect trademark infringement claims being brought against third party service providers. The DMCA has a safe harbor that protects against copyright claims, and the CDA has a safe harbor that protects against all non-intellectual property claims, such as defamation. But trademark is a loophole... and because of that you can get some really dreadful results. Earlier this year, we noted that a court had ruled that web hosting firms could be liable for trademark infringement done by their customers. The case involved luxury goods retailer Louis Vuitton suing some web hosting firms for the actions of their customers. Any common sense ruling would find that the hosts are simply the tool providers, and it was the customers running the actual websites who were liable. That is, if there were common sense.

Instead, as Eric Goldman alerts us, the jury has sided with Louis Vuitton and awarded the company $32.4 million in damages from the web hosts.

This is a bad end result no matter how you look at it. If you do any sort of web hosting, your liability just went up by a tremendous amount, and you may now be expected to proactively police all your customers' websites for anything that might possibly be seen as trademark infringement. It's safe to say that this is not what Congress intended -- given the nature of the safe harbors it set up in the DMCA and the CDA. Hopefully, either a higher court will toss this out and/or Congress will finally get its act together and extend safe harbor protection to trademarks as well.

Filed Under: chilling effects, liability, safe harbors, trademark, web hosts
Companies: akanoc, louis vuitton