Engine files brief supporting Internet platform startups in trademark case
TLDR: An appeals court is currently considering whether Internet platforms can be held liable when their users are accused of trademark infringement. Redbubble was accused of direct trademark infringement based on the accusation that its users were selling infringing Ohio State products on the platform. A trial court concluded that Redbubble should not be liable in this circumstance, and Engine filed a brief in support of Redbubble’s position on appeal.
What’s Happening: On Friday, Engine filed a brief in a trademark lawsuit between The Ohio State University and Redbubble. Redbubble is a well-known online marketplace platform where independent artists and designers can sell products, including prints, stickers, t-shirts, and phone cases.
Ohio State had accused Redbubble of trademark infringement based on the allegation that some Redbubble users were selling products that contained Ohio State’s logos. Before the lawsuit, Redbubble had asked Ohio State to identify instances of infringement, and Redbubble would investigate those users accused of infringement and take down any infringing merchandise. Instead of identifying any infringing products, Ohio State sued. Ohio State only accused Redbubble of direct trademark infringement, and did not accuse Redbubble of contributory infringement (i.e., Ohio State argued that Redbubble itself directly infringed trademarks, but did not argue that Redbubble was liable because it was facilitating infringement by specific users).
A trial court considered the case earlier this year, and held that Redbubble was not directly infringing Ohio State’s trademarks. Ohio State appealed. The brief Engine filed last week explained why the appeals court should affirm the district court’s earlier decision.
Why it Matters to Startups: We argued that the appeals court should affirm the trial court’s decision that Redbubble is not directly liable. The general approach to online platform liability had been to hold platforms liable for trademark infringement if they intentionally assist their users in infringement or know about infringement and do nothing to intervene. Ohio State’s claim against Redbubble seeks to expand platform trademark liability in a way that could harm startups. If the court accepted Ohio State’s arguments, then startups could be liable for infringement even if they have no direct involvement in or knowledge of the underlying infringing conduct.
For one, if a startup platform were directly liable for all of its users’ conduct, it would have to affirmatively monitor all of the content uploaded to its site. That would, of course, require the use of ineffective and expensive filtering technology and hiring numerous employees to monitor content. In the trademark context, this sort of affirmative monitoring is especially difficult. There are over 2.5 million active trademarks in the U.S. alone, and every startup would have to learn all of those marks and be able to monitor for them. It would, for example, be difficult to identify every variation of each mark and be impossible for a platform to know whether each individual use of a mark was licensed or infringing.
Moreover, because filtering technology is imperfect (and even human review cannot catch everything), platforms would face the constant risk of expensive litigation and infringement damages over allegedly infringing user-generated content it has never seen. The increased costs of monitoring and covering litigation risk would be a significant burden on existing startups, would deter investors, and could effectively create a barrier to entry for future startups looking to compete with established online marketplace platforms.
On the Horizon.
The Senate Judiciary Committee is planning to hold a hearing on “encryption and lawful access” at 10 a.m. next Tuesday, December 10th.
The Senate Judicary’s Subcommittee on Intellectual Property is holding an oversight hearing of the U.S. Copyright Office at 2 p.m. next Wednesday, December 11th.
