Contributory Infringement Liability and Willful Blindness to Trademark Infringement

In the case of Brandy Melville v Redbubble, a three judge appellate panel explored whether an owner of an online market place is liable for contributory trademark infringement. Scott Hervey and Jamie Lincenberg discuss this on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

Show Notes:

Scott:
On today’s episode of The Briefing, we will be taking a dive into the Willful Blindness Doctrine which is highlighted by a recent filed opinion in the case between Redbubble and YYGM doing business as Brandy Melville, in which a three-judge appellate panel discussed what legal standard the district court should apply when examining whether an owner of an online marketplace is liable for contributory trademark infringement, which is committed by artists who sell products on its marketplace. I’m Scott Hervey of Weintraub Tobin, and I’m joined today by my colleague, Jamie Lincenberg. Jamie, thank you for joining us today.

Jamie:
Thank you, Scott. I’m happy to be here.

Scott:
Jamie, can you provide a quick recap of the lawsuit?

Jamie:
Absolutely. In 2021, Brandy Melville, a popular manufacturer of clothing, home goods, and other items, sued Redbubble for trademark violations alleging infringement of its registered Brandy Melville heart mark and La lightning mark. The defendant, Redbubble, owns and operates an online marketplace where artists can upload their own work to be printed on various products and then sold. Unlike other print on demand vendors, Redbubble outsources everything other than marketing and payment processing, so third party users upload their images, and third party manufacturers and other vendors produce and ship the ordered items. The district court had found Redbubble liable for one willful contributory counterfeiting of the heart mark and the lightning mark, two contributory infringement of those two marks, and three contributory infringement of unregistered trademarks that were Brandy Melville variations. After the jury’s verdict, the district court granted Redbubble’s motion for judgment as a matter of law on the contributory counterfeiting claim for the heart mark. The district court let the verdict stand for the remaining claims, and it denied Brandy Melville a permanent injunction, attorneys fees, and prejudgment interest. On Monday, the 9th Circuit appellate panel overturned much of the lower court’s findings and remanded for reconsideration of Redbubble’s motion for judgment as a matter of law, telling the district court to use the correct legal standard for what constitutes willful blindness, the doctrine we will explore in more detail today.

Scott:
This panel’s opinion vacates the district court’s order granting in part and denying in part Redbubble’s motion for judgment as a matter of law, and also vacated the district court’s denial of Brandy Melville’s motion to permanently enjoin Redbubble from referencing, mentioning, and or using Brandy Melville, brandy Melville’s registered trademarks and Brandy Melville’s unregistered trademarks. In reversing the lower court with respect to Redbubble’s contributory infringement liability, the panel held that a party is liable for contributory infringement when that party continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement. And a party only meets this standard if it is willfully blind to that infringement. So how do we determine whether a party is willfully blind to infringement?

Jamie:
In agreement with other circuit courts, the panel held that willful blindness requires the defendant to have knowledge of specific infringers or instances of infringement, general knowledge of infringement on the defendant’s platform, even of the plaintiff’s trademarks, is not enough to show willful blindness. Without the specific knowledge or awareness of specific instances of infringement, the defendant need not search for infringement on its own accord. As mentioned, other circuits have reached similar conclusions, including the Second, Fourth and 10th Circuits. One such case is Tiffany Inc. Versus eBay Inc. Which involved counterfeit Tiffany jewelry being sold on eBay. The Second Circuit held that a service provider must have more than general knowledge that its platform is being used to sell those counterfeit products in order to be liable for contributory trademark infringement.

Scott:
The panel in this case also discussed a non-presidential companion ruling, Atari Interactive versus Redbubble, in which the court again ruled in favor of Redbubble. In that opinion, the court said that most of the evidence Atari relied on to show that Redbubble was willfully blind was evidence of general infringement on Redbubble’s website, and not specific instances of users infringing. Atari’s marks. Atari’s evidence showed that when it notified Redbubble of specific infringing listings, Redbubble removed them as a large online marketplace. Redbubble’s response was reasonable, according to the court. At a minimum, the court said that the evidence did not show that Redbubble took active steps to avoid acquiring knowledge. Redbubble has said that they are pleased that the 9th Circuit agrees that they are not contributorily liable when third parties misuse Redbubble services to infringe without Redbubble’s knowledge, and that this ruling helps ensure that Redbubble can remain an open marketplace where hundreds of thousands of independent artists and designers can sell their creations.

Jamie:
So, Scott, as we wrap up here, I am left with a few questions. Based on this opinion, it seems that online marketplaces such as Redbubble, or even an Amazon or eBay would only be liable for user submitted trademark infringement when they have that specific knowledge of such infringement. And that seems here to be determined based on notice and takedown principles. And if the intention of the willful blindness doctrine is not equivalent to a notice and takedown, then exactly what facts would demonstrate willful blindness other than a disregarded takedown notice? The court doesn’t seem to address this here. Further to that, under the standard presented here, and compared to the elements of the DMCA copyright takedown notice, could a rights owner send a notice claiming that a specific product is always infringing, and thereby put the burden on the defendant to find and prevent every instance of that product on the site? In that same vein, it’s apparent that defendants would benefit from a statute specifying what constitutes a legally effective trademark takedown notice. The panel sidesteps this question, but will be an issue to keep an eye on moving forward.

Scott:
Jamie, these are all really great questions. Based on the 9th Circuit’s decision, it would seem that a notice similar to the type sent in a DMCA takedown, where the marketplace is given detailed and specific information of the counterfeit goods and the applicable seller, that type of notice would suffice. Based on the court’s opinion, I don’t think that a general notice to the marketplace that a type of product would infringe in all instances, and as you noted, thereby putting the burden on the defendant or the marketplace to find and prevent every instance of this product. I don’t think that would suffice. I don’t think that is detailed and specific enough to satisfy the knowledge qualifier that the court is looking for here. But given that this is a new development from the 9th Circuit, I’m certain that we’re going to see follow up cases on this. So thanks for bringing this to our attention, and we’ll be certain to watch for cases on this matter.

Jamie:
Absolutely.

Scott:
Well, that wraps it up for this installment of the briefing by Weintraub Tobin. Thanks for tuning in today. Please remember to subscribe to our podcast and to our YouTube channel and like and leave us a comment.