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Web Hosting Companies Sued by Louis Vuitton for Trademark Infringement

Web Hosting Companies Sued by Louis Vuitton for Trademark Infringement

Louis Vuitton is notorious for their relentless efforts to copyright their signature trademark. From legally shutting down reproduction factories to suing landlords in Chinatown who rent to tenants that sell counterfeit LV purses, Louis Vuitton is legally aggressive – to say the least.

Now, the Louis Vuitton legal team has taken their aggression to the next level by suing two web hosting companies, Akanoc Solutions, Inc. and Managed Solutions Group, Inc., for hosting client websites that sell counterfeit goods. The most surprising part is that Louis Vuitton successfully won in court – and the hosting companies now must pay $32 million in fines!

The Line between Hosting Companies and Their Clients

At what point is a web hosting company responsible for its client’s trademark and copyright infringement? Did the U.S. Court system cross the line by agreeing with the lawsuit brought against Akanoc Solutions Inc. and Managed Solutions Group Inc by Louis Vuitton? Let’s delve into the details to analyze how this case may impact web hosting companies in the future.

The lawsuit brought against Akanoc Solutions Inc. and Managed Solutions Group Inc. shows clearly that the owner and operator of the two hosting companies (who coincidentally owns the counterfeiting websites in question), Steven Chen, knowingly utilized 13 trademark images on the offending sites.

Further, in knowing these images were being used without the permission of Louis Vuitton, Chen did nothing to remove the websites from the web hosting companies, nor did he attempt to remove the trademarks from the sites. Steven Chen agreed on all counts of willingly committing copyright infringement.

Lawyers for Mr. Chen argued that the companies were protected by the Digital Millennium Copyright Act’s (DMCA). However, this particular code indicates that the offending party must not be aware of the infringement, or if aware, has made attempts to remove the offending web site. Steven Chen clearly knew of the offenses and chose to leave them as is.

While there may be quite a bit of division in regards to the decision made by the courts (Slashdot in particular is hosting a rather rigorous debate), the plain and simple fact is that the defendant clearly acknowledged that he was aware of the trademark and copyrights used. The win for Louis Vuitton is said by some to be an infringement of free speech. However, trademark and copyright infringements have never been a free speech issue outside of the internet, and they shouldn’t begin now simply because of a new source of media.

How Does This Case Impact Web Hosting in the Future?

The end result of this lawsuit may be nothing more than a quiet footnote in internet law history. True, this case was unusual, as the owner of the web hosting companies also owned the counterfeiting websites in question. This isn’t the norm for most web hosting companies. They often are too large to continuously check on all web hosting customers to ensure copyrighted and trademarked information isn’t being illegally used.

Hopefully, what we may see in the future is web hosting companies clearly outlining possible monetary repercussions for copyright and trademark infringements. More definition in hosting contracts would easily be a good place to start. A notice needs to be sent out that web hosting companies will not be responsible for the illegal acts of their clients and that trademark and copyright infringement will not be tolerated.

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