Online Auction House Liability for the Sale of Trademark Infringing Products

Article excerpt

INTRODUCTION
  I. FACTS AND BACKGROUND OF TIFFANY, INC. V. EBAY AND
     LOUIS VUITTON MOET HENNESSY V. EBAY
     A. EBay's Business Model
     B. Tiffany's Quaff el with EBay
     C. LVMH's Troubles with EBay
 II. AVENUES FOR CONTRIBUTORY TRADEMARK LIABILITY
     A. United States Contributory Trademark Liability in the
        Online Context
        1. Contributory Tort Liability in the United States
        2. Contributory Trademark Liability in the United
           States
           a. Inwood Laboratories v. Ives Laboratories: A
              Guide to Contributory Trademark Infringement
           b. Tiffany's Treatment of In wood
               i. Establishing the Supplier's Direct Control
              ii. Requisite Knowledge Required for the
                  "Continued to Supply" Method
     B. French Contributory Trademark Liability in the Online
        Context
        1. Contributory Tort Liability in France
        2. Contributory Trademark Liability in France
III. IMPLICATIONS AND EVALUATION OF THE U.S. AND FRENCH
     DECISIONS
     A. A Specific Knowledge Requirement Protects the Business
        Model of Online Auction Houses
     B. A Specific Knowledge Requirement is Consistent with
        Congressional Policies of the Communications Decency
        Act
CONCLUSION

INTRODUCTION

With the rise of the Internet, trademark owners have seen an increase in online trademark infringement. (1) In particular, trademark owners have found a large amount of trademark infringing products listed for sale on online auction houses' websites. (2) Trademark owners have demanded that these online auction houses help protect their trademarks and prevent the sale of trademark infringing products. (3) Trademark infringement on these websites, however, remains rampant, even with online auction houses' assistance in removing trademark infringing listings. (4) As a result, trademark owners looking for an effective solution to online trademark infringement seek to hold online auction houses liable for contributory trademark infringement. (5)

Two avenues exist by which trademark owners can hold online auction houses liable for contributory trademark infringement: tort negligence law and trademark law. In the United States, these trademark owners must use trademark law to bring a suit of trademark infringement because trademark owners are barred from bringing negligence actions for third party liability under [section] 230 of the Communications Decency Act. (6) However, in France, trademark owners are free to choose to bring suit for contributory trademark infringement under either a theory of tort negligence law or trademark law.

These two approaches were highlighted in two different cases: Tiffany, Inc. v. eBay and Louis Vuitton Moet Hennessy v. eBay. (7) In Tiffany, a United States district court, through its finding that specific knowledge is required for contributory trademark infringement liability, held that the trademark owner ultimately bears the burden of protecting its trademark on online auction houses' websites. (8) However, in LVMH, a French trial court held, under a theory of tort law, that online auction houses are liable to trademark owners if the online auction houses fail to prevent any trademark infringing sale on their websites. (9) Therefore, in France, online auction houses are responsible for protecting the trademark owners' trademarks. (10)

This Comment examines online auction house liability for the sale of trademark infringing products and the methodology used by these courts in making this determination. Part II of this Comment briefly summarizes the key facts from Tiffany and LVMH. Part III outlines contributory trademark jurisprudence in the United States and France and the application of this jurisprudence in Tiffany and LVMH, respectively. Part IV evaluates the implications of the two approaches to determine which approach is more practical and effective. …