Should Designers Pay the Price? A Look at Contributory Trademark Infringement as It Relates to Different Outcomes of Internet Auction Site Litigation in the United States and France
Haynes, Rebecca M., Ave Maria Law Review
They fill the streets of New York and Los Angeles; hundreds line the Las Vegas strip--counterfeit goods that is. Not only do counterfeit handbags, sunglasses, and jewelry now line the sidewalks of big cities, but the items are also invading smaller communities. A local headline just before one of the largest shopping days of the year read, "$650k Worth of Fake Goods Seized at Knoxville Malls." (1) The local police seized fake handbags, sunglasses, designer cell phone cases, and jewelry when they executed search warrants at the ten retail outlets just before Black Friday. (2) The counterfeiting problem does not stop with street vendors and malls. The largest shopping mall in the world is the Internet, and it provides customers with thousands of different items daily. Among these hot buys found on the Internet are "knock-offs." One estimate for 2006 "posits that 14 percent--or $84 billion--of [the] year's $624 billion global counterfeit trade was derived from Internet sales." (3) As more and more counterfeits reach more and more Americans, what are Congress and the judicial system doing to stop it?
The Internet has provided a large marketplace for buyers and sellers of both real and counterfeit items, and as a result, the legal standards for contributory trademark infringement have been playing catch-up over the past twenty years. The problems associated with the trade and trafficking of these counterfeits are not found simply in the United States; courts around the world are struggling to control the problem. As designers and elite trademark owners fight an uphill battle in the United States, they are finding help in other jurisdictions. The French courts seem ready to come to the rescue of these top name-brand designers after the Commercial Court of Paris handed LMVH Moet Hennessy Louis Vuitton SA ("Louis Vuitton") a twenty-million euro verdict against eBay after eBay was found liable for selling fake Louis Vuitton merchandise. (4) Under similar circumstances, Tiffany sued eBay in the Southern District of New York only to be left with a cold verdict. (5) This begs the question as to why the courts in France are coming to the rescue of trademark owners who file suit in their jurisdiction while courts in the United States will not give the same relief.
This Note discusses the development of contributory trademark infringement law in the United States and compares it to the stand France has taken in stopping contributory trademark infringement. Part I examines the history of contributory trademark infringement law in the United States and where it may be headed in the wake of Tiffany v. eBay. Part II briefly discusses France's history of trademark laws and the holding of Louis Vuitton v. eBay. Part III looks at policy concerns that stem from contributory trademark infringement and policing the Internet. Finally, Part IV explores different laws and programs as potential models for a standardized contributory trademark law. This Note proposes a reasonably anticipated standard or similar standardized rule to resolve the discrepancies that have arisen in the international context regarding how to prevent infringement activities on internet auction sites.
I. OVERVIEW OF UNITED STATES TRADEMARK LAW AND THE OUTCOME OF TIFFANY V. EBAY
A. Background of Trademark Law in the United States
A trademark is defined as a "word, name, symbol, or device, or any combination thereof ... used by a person ... to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods." (6) A trademark is beneficial to its owner because it helps him establish goodwill in his product or service. (7) There are two primary justifications for trademark protection. The first justification is "to 'protect the public so that it may be confident that, in purchasing a product bearing a particular trademark which it favorably knows, it will get the product which it asks for and which it wants to get. …