Contributory Trademark Infringement: What Every Trademark Attorney Needs to Know

Contributory Trademark Infringement in the age of the Internet is something every trademark attorney needs to understand.

There are two theories under which a defendant may become contributorily liable for the infringing conduct of another under trademark law; 

First, a defendant can be liable for contributory infringement if that defendant “intentionally induces another to infringe a trademark.”

Second, the second theory of contributory infringement occurs when a defendant “continues to supply its service (for instance, an online sales, e-commerce or auction site) to a direct infringer whom the defendant knows or has reason to know is engaging in trademark infringement.” 

The standard for contributory trademark infringement is set forth in the Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982). Learning from Inwood, it is incumbent upon any person asserting their rights to a trademark that they provide notice (either direct or constructive) of any perceived infringement to the allegedly infringing parties.

Establishing that a defendant or Internet service provider knows or has reason to know of direct infringement through its service can be a challenging argument.  Providing notice of trademark infringement to such third parties becomes critical if a plaintiff is to establish contributory infringement against a service provider who does not otherwise have direct or constructive knowledge that their Internet service is being used to sell counterfeit goods or other goods and services which infringe trademarks. 

If a service provider acts reasonably  in precluding further sales by the party engaging in direct trademark infringement or counterfeiting, the service provider will typically be insulated from allegations of contributory trademark infringement.

How to trademark tip from the landmark trademark contributory infringement case Inwood Laboratories;

• If a trademark owner perceives infringement of his or her mark, they should immediately provide notice of such infringement to the infringing parties.
• An Internet service provider accused of contributory trademark infringement should immediately cease providing services to the directly infringing party or otherwise they may be liable as a third party contributory trademark infringer.