A Counterfeit Site & A Court Case
Sunday, March 20th, 2011The following comes from an article found on Law.com – it pertains to a court case that is vitally relevant to my business, as well as clients of TKG. I wish I could post the whole article, because I feel that it is written better than I could, to make sure the legal aspects are represented – but I’ll give it my best shot. To read the entire article (which I recommend), I have provided a link:
http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202486373422&Web_Host_Liable_for_Contributory_Infringement
Sheri Qualters All Articles
The National Law Journal
So here’s the basic rundown: A web hosting and SEO firm in South Carolina called Bright Builders hosts a site and provides SEO services for a counterfeit golf club company. The fake golf club company openly states on it’s site that they make and sell the best fake Cleveland Golf clubs on the internet. Cleveland Golf gets wind of this and sues. Judge decides a verdict against Bright Builders (the web hosting company) to the tune of $770,750!!!!!!! The fake golf club guys get a jury return of a mere $28,250 statutory damages verdict.
A lawyer (Finnerty) in the case maintains that hosting a web site is the same as being a landlord –
“A Web-hosting company’s obligation is similar to that of a landlord’s, he said. A landlord doesn’t have the obligation to act as an investigator against his tenants to find out they are doing anything illegal, but once they knew or should have known, they have to act,” Finnerty said. “How is that any different online?”
Basically stating that a Web hosting company has a minimal obligation to know what they are hosting, as a landlord has a minimal obligation to know whom he is renting an apartment. If the hosting company or SEO provider discovers something remiss, or flat out illegal, they are obliged to report it.
I guess that’s just basic common sense. I don’t know that I want to get hit with a monetary judgment because I wasn’t aware of what a client had on a Web site TKG is hosting or does SEO for. I think for the most part, we are fairly familiar with all of our clients and would notice something going on. In this particular case, it was clear and obvious that Bright Builders knew what was up, and just didn’t do anything about it. TKG has always upheld the highest Web standards, and hopefully, this would never be an issue. That being said, we host hundreds of Web sites, and a few are just hosted here, we haven’t touched them other than to host.
As law catches up to technology, we’re going to see more and more of these cases. Judges are going to have to try and use existing law as a precedent, as in the landlord example. Or they are going to be setting landmark precedents. Hopefully, these types of cases will be decided justly, and won’t impinge on the freedom of the Web.
What are your thoughts on this case? Do you think the hosting company should have been liable for damages, or do you think it’s a crock? I think I am in the middle on this one. If they were aware of the situation, then yeah, they are liable, but I don’t see how they are more liable than the actual site owners. That one baffles me a little. What say you?





