DMCA Upset: ISP Liable for Infringement

LOS ANGELES — In a stunning twist of trademark infringement litigation, a federal jury in California has found two web hosting companies and their owner liable for contributing to trademark and copyright infringement for hosting sites selling counterfeit goods.

Last week a jury found Fremont, Calif.-based hosting companies Akanoc Solutions Inc., and Managed Solutions Group, Inc., and their owner Steven Chen, liable for knowingly allowing multiple websites they hosted to sell products that infringed upon Louis Vuitton copyrights and trademarks. The jury assessed damages equaling more than $32 million.

In accordance with the jury's decision, the U.S. District Court for the Northern District of California is expected to issue a permanent injunction banning the hosting companies from hosting the sites that were allegedly selling fake Louis Vuitton goods now and in the future.

Attorneys for Louis Vuitton stated that the case is the first successful application on the Internet of the theory of contributory liability for trademark infringement. Farmington Hills, MI-based, adult industry attorney, Corey Silverstein, agreed that this verdict may be the first of its kind. Silverstein who holds the positions of Chief Operating Officer and General Counsel for MojoHost found the decision "concerning, and a preview of things to come for the adult industry."

"In summation, what happened here was that the jury found that the Defendant hosting companies knew or should have known that they were enabling illegal activities and were duty bound to stop the activities," Silverstein said.

The Defendants' attempts to utilize the protections granted to Internet Service Providers ("ISP") by the Digital Millennium Copyright Act ("DMCA") were unsuccessful in this case.

"The DMCA provides certain safeguards from liability for copyright infringement for an ISP, as long as the ISP implements certain policies and procedures and the ISP adequately responds to properly formatted copyright infringement notices," Silverstein told XBIZ. "Apparently in this case the Defendants' arguments that they could not be held responsible for the actions of the sites, did not sit well with the jury."

While Silverstein indicates that he has not seen the evidence that was presented at trial, he believes that the Plaintiff was able to successfully demonstrate that the Defendants had become aware of the unlawful activities of the sites but failed to take sufficient measures to stop the illegal activities of the sites.

Silverstein noted that he fully anticipates that the Defendants will appeal the jury's finding and that this particular case is far from over. However, Silverstein stated that no matter what the final result of this case may be after the appeals process has run its course, this decision should not be taken lightly by ISPs.

"Every ISP should not be taking notices of copyright and or trademark infringement lightly," Silverstein said. "Each ISP should have strict procedures for responding to such notices and maintain all documentation to and from the alleged infringer."

MojoHost CEO, Brad Mitchell, also learned of this decision, and while troubled was not surprised.

"While MojoHost is completely against copyright infringement and has a strict policy that includes the removal of alleged infringing content when the alleged infringer fails to properly respond, we believe that all of the other hosts who do not utilize similar strict policies are making life much more difficult for copyright holders," Mitchell said.

The question of intellectual property rights is especially important to Mitchell, who takes great pride in MojoHost's specialty of hosting high traffic media outlets who publish original content for the rest of the world to enjoy.

Silverstein also found the jury's decision to hold Steven Chen, jointly liable troubling.

"Although I am unfamiliar with the specifics of this case and the actions or inactions or Mr. Chen, generally for an individual to lose the corporate protections granted to him, would require the showing of willful participation in the illegal activity or some type of gross negligence," Silverstein offered.

Silverstein also believes that ISP's should be on high alert.

"The DMCA is one of the most controversial pieces of legislation in the adult industry and while it provides safeguards to an ISP, an ISP cannot be excused from willful participation in copyright infringement," Silverstein concluded. "This case may give copyright holders the ammunition they have been waiting for to combat any ISP that does not conform to the guidelines of the DMCA and utilize proper policies and procedures for dealing with allegations of copyright infringement."

Related:  

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

CAM4 Debuts Weekly 'Skyy Knox's CAM Crawl' Livestream

CAM4 is launching "Skyy Knox’s CAM Crawl," a new livestream running every Sunday at 3 p.m. PDT.

Texas Judge Pauses AG Ken Paxton's Aylo Lawsuit Until SCOTUS Decision

A Texas district judge granted a request Wednesday to pause proceedings in the lawsuit filed by Attorney General Ken Paxton against Aylo over its implementation of Texas’ controversial age verification requirements for Pornhub, pending the outcome of the Free Speech Coalition-led lawsuit against Paxton, which will be heard by the Supreme Court during the next term.

Author of UN Report Recommending Worldwide Criminalization of Sex Work, Porn to Speak at NCOSE Summit

Jordanian activist Reem Alsalem, a special rapporteur on violence against women and girls at the United Nations Human Rights Council who recently issued a controversial report recommending that governments abolish all forms of sex work, including porn, will speak at anti-porn lobby NCOSE’s 2024 summit in August.

Spicey AI Voice Chat Platform Launches

Spicey AI, a platform that uses artificial intelligence to create interactive voice messages from chatbots based on adult performers, has launched.

Utherverse to Host 8th Annual VirtualCon in September

Virtual reality and metaverse technology company Utherverse will hold the eighth edition of its annual virtual conference, VirtualCon, from Sept. 26-28.

Pornhub Shuts Down Access in Nebraska Over Age Verification

Aylo began blocking access to Pornhub in Nebraska on Monday, in anticipation of the state’s new age verification law — one of many such bills promoted by religious conservatives around the country — which is scheduled to go into effect Thursday.

FeelMe AI Launches 3 New Subscription Tiers

FeelMe AI has launched three new subscription levels, allowing users to connect compatible Kiiroo sex toys to their videos for interactive solo play.

CamSoda Launches AI Girlfriend Builder

CamSoda has debuted a personalized "AI girlfriend" feature, which allows users to create their very own virtual companion at no charge, including free NSFW role-play and chat.

Free Speech Organization Comes Out in Support of Wisconsin Professor Who Posted on OnlyFans

After a University of Wisconsin-La Crosse faculty tribunal recommended stripping veteran professor of communications Joe Gow of tenure last week due to Gow having unremorsefully created and appeared in adult content, a major free speech organization has come out in his support.

MojoHost Unveils Public Cloud Service MojoCompute

MojoHost has launched MojoCompute, a new cloud service, as the central component of its MojoCloud product offerings.

Show More