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Bad Online Guests Cause Trademark Trouble For Virtual Hosts

September 13, 2011

In an opinion of note to those involved in e–commerce, the Ninth Circuit Court of Appeals has held that web hosting firms may be legally responsible for contributing to trademark infringement in the content of websites they host. In the case, pitting Louis Vuitton against web hosting firms, the appellate court affirmed that website hosts who know or have reason to know that they are hosting infringing website content can be held liable for contributory trademark infringement on the theory that they provide the venue for infringement. “[W]ebsites are not ethereal; while they exist, virtually, in cyberspace, they would not exist at all without physical roots in servers and internet services,” wrote the court, which then went on to quote approvingly from the lower court decision: “Appellants ‘physically host websites on their servers and route internet traffic to and from those websites. This service is the Internet equivalent of leasing real estate.’” Because the hosts had “direct control over the ‘master switch’ that kept the websites online and available,” they could be held accountable for keeping the virtual power flowing to the infringing cyber–store fronts. This degree of control over and monitoring of the virtual instrumentality created real (and adverse) legal consequences for the web hosts.

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