9th Cir.: ISPs providing servers for Louis Vuitton counterfeiters are contributory infringers

Money quote: ISPs who “physically host websites on their servers and route internet traffic to and from those websites” perform a service that “is the Internet equivalent of leasing real estate.”

The court in Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., No. 10-15909 (Sept. 9, 2011) dealt with claims of contributory trademark infringement and contributory copyright infringement.

There were lots of holdings on both liability and damages as to contributory infringers. On the trademark liability side, the court noted that Vuitton had to show that the defendant “continued to supply its services to one who it knew or had reason to know was engaging in trademark infringement” and “had direct control and monitoring (sic) of the instrumentality used by a third party to infringe.” The ISPs were found to have “direct control over the ‘master switch’ that kept the websites online and available.”

As to the copyright claim, the court noted that Vuitton had to prove that the defendant “materially contributed” to the copyright infringement, and that “material contribution turns on whether the activity in question ‘substantially assists’ direct infringement.” The court concluded that “providing direct infringers with server space satisfies that standard.”

The court also held that statutory counterfeiting damages are available not just against direct counterfeiters, but also against those who contribute to counterfeiting. As to copyright statutory damages, the court held that “a plaintiff may receive a single statutory award for all infringements of any one copyrighted work from either (1) any one defendant, where the defendant is separately liable, or (2) multiple defendants, where those defendants are jointly and severally liable.” (emphasis added).