Landlords May Be Liable for Contributory Trademark Infringement

Malls, flea markets, swap meets, farmer’s markets, and rummage sales should consider themselves “on notice.” (Indeed, anyone who “supply[s] a service” for others to use, should also be “on notice”.) Since, you may be held liable for the trademark infringement of your tenants, according to the Court in Luxottica Group, S.p.A. v. Airport Mini Mall, LLC, 932 F.3d 1303, 1312 (11th Cir. 2019).

In Luxottica the Court was asked to weigh-in on the liability of a mall owner in College Park, Georgia to a manufacturer of sunglasses (Luxottica Group, S.p.A., and its subsidiary, Oakley, Inc.), where subtenants at the mall were selling knockoffs of Luxottica’s Ray-Ban and Oakley brands.

Since the mall itself was not selling the infringing products, Luxottica’s legal theory was pinned on a claim of contributory trademark infringement under the Lanham Act, 15 U.S.C., §§ 1051 et seq.

Thus, a claim for contributory trademark infringement has two elements: (1) a person or entity commits direct trademark infringement under the Lanham Act; and (2) the defendant (a) “intentionally induces” the direct infringer to commit infringement, (b) supplies a “product” to the direct infringer whom it “knows” is directly infringing (actual knowledge), or (c) supplies a “product” to the direct infringer whom it “has reason to know” is directly infringing (constructive knowledge). Id.

In the Luxottica case, the Eleventh Circuit had to determine (1) whether contributory liability extended to the landlord-tenant context, and (2) what level of proof of “knowledge” was required–actual knowledge or merely constructive knowledge.

In this case, Luxottica showed that the defendants took no steps to evict the infringing subtenants that during the time period when defendants owned the mall, despite the fact that (i) law enforcement had conducted three raids of the mall resulting in the arrest of subtenants and the seizing of alleged counterfeits and (ii) Luxottica had twice sent letters to defendants informing them that their subtenants were not authorized to sell Luxottica’s eyewear and “that any mark resembling Ray-Ban or Oakley marks would indicate that the glasses were counterfeit.”

In deciding the case, the Court found that “[A] landlord may be contributorily liable for its (sub)tenants’ direct trademark infringement if the landlord intentionally induces the infringement or knows or has reason to know of the infringement while supplying a service (such as space, utilities, or maintenance) that facilitates it.” The Court also found that defendants were at least willfully blind to specific instances of infringement (due to Luxottica’s demand letters and the law enforcement raids, all of which would have prompted a reasonable landlord to conduct some investigation).

Given these two findings, the Court upheld the lower Court’s $1.9 million judgment against the mall owners.

In light of Luxottica, anyone who sublet’s space or otherwise provides a service should be very careful if they receive claims of trademark infringement (or claims of infringement of any type of intellectual property). They could be on the hook for damages for any infringement–if it can be shown that they knew, had reason to know, or showed willful blindness to such infringement.

When it comes to intellectual property matters—be they simple trademark applications, reviews of established intellectual property protection plans, or expansive federal litigation—I can help. Give me a call or email and find out how.