Cleveland Golf Company, Inc. won a landmark legal victory with a jury verdict recently in a trademark infringement case. The company said it represented the first time that a SEO/Web host or other Internet intermediary was found liable for contributory infringement without having first received actual notification of the counterfeit sales from a third party. The case is Roger Cleveland Golf Company, Inc. v. Prince (et al.), March 14, 2011.
Based on the jury's verdict, Judge Margaret B. Seymour of the U.S. District Court in South Carolina, entered judgment against Search Engine Optimization (SEO) and web-hosting firm Bright Builders Inc. on counts for contributory trademark infringement and unfair trade practices for assisting with the construction and hosting of the Web site www.copycatclubs.com, an online business that sold counterfeit Cleveland golf clubs. The judgment included an award of $770,750 in statutory damages against Bright Builders and $28,250 in statutory damages against Christopher Prince, who owned the website. The site is now closed.
The case was presented and pursued by Cleveland Golf/Srixon based on a theory that Bright Builders knew or should have known of the infringing conduct based on the name of the website, the content of the website, and certain discussions Bright Builders had with Prince regarding his website. The jury accepted this theory finding Bright Builders was liable for contributory trademark infringement of eleven of Cleveland Golf's registered trademarks.
The lawsuit was filed after Huntington Beach, CA-based Cleveland Golf/Srixon learned counterfeit golf clubs bearing Cleveland Trademarks were being sold online by Copycat and its principals, Christopher Prince, and Prince Distribution LLC. The homepage of copycatclubs.com went so far as to boast, “Your one stop shop for the best copied golf clubs on the Internet.” During discovery, it became apparent that Prince had received assistance in creating the website from the SEO/Web Host Bright Builders. As a result, the complaint was amended to include claims against Bright Builders for contributory infringement and unfair trade practices.
