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2011 Stan. Tech. L. Rev. 9 (2011)
Why the Reasonable Anticipation Standard is the Reasonable Way to Assess Contributory Trademark Liability in the Online Marketplace

handle is hein.journals/stantlr2011 and id is 190 raw text is: 


Bernstein & Potenza: Why the Reasonable Anticipation Standard Is the Reasonable
Way to Assess Contributory Trademark Liability in the Online Marketplace












      Why the Reasonable Anticipation Standard Is the

    Reasonable Way to Assess Contributory Trademark

                   Liability in the Online Marketplace


                   DAVID H. BERNSTEIN & MICHAEL R. POTENZA *



                               CITE AS: 2011 STAN. TECH. L. REv. 9



    Trafficking in counterfeit and trademark-infringing goods is a widespread and serious problem,
particularly in online marketplaces that provide a forum where third parties, with relative anonymity
and at limited cost, can ply their trade. Fortunately, the law has long provided a fair, balanced
standard for determining when a party can be held liable for contributing to the infringing actions of
another. In Inwood Laboratories, Inc. v. Ives Laboratories, Inc., the Supreme Court held that a party can be
contributorily liable if it induced the infringement or continued to support conduct that it knew or
had reason to know was infringing.'
    In the nearly thirty years since then, that standard has been fairly applied in a variety of contexts,
including with respect to the actions of flea markets,2 landlords,3 and credit card processors.4 In
Tifany (NJ) Inc. v. eBay Inc.,5 though, the U.S. Court of Appeals for the Second Circuit took a different
approach; it held that the operator of the online marketplace could be found liable only if it had
specific knowledge of the infringement:

     [A] service provider must have more than a general knowledge or reason to know that its
     service is being used to sell counterfeit goods. Some contemporary knowledge of which



     *© David H. Bernstein & Michael R. Potenza. David H. Bernstein is a partner with Debevoise & Plimpton LLP in New
York, and an adjunct professor of law at New York University Law School and George Washington University Law School, where
he teaches Advanced Trademark Law. He received an A.B. magna cum laude from Princeton University's Woodrow Wilson
School of Public and International Affairs in 1985, an M.Sc. from the London School of Economics and Political Science in 1986,
and his J.D. from Yale Law School in 1989. Michael R. Potenza is counsel with Debevoise & Plimpton LLP. He graduated magna
cum laude from Yale College in 1990 and magna cum laude from Harvard Law School, where he received a J.D. in 1995. He
clerked for the Honorable William G. Bassler, United States District Court for the District of New Jersey and to the Honorable
Samuel A. Alito, Jr., United States Court of Appeals for the Third Circuit. Mr. Bernstem and Mr. Potenza served as counsel for the
International Anti -Counterfeiting Coalition in connection with its amicus curiae brief in the Second Circuit in Tiffany (NJ) Inc. v.
eBay, Inc., and for the International Trademark Association in connection with its amicus curiae brief in support of a petition for
certiorari in that case to the Supreme Court. Jia Wang, an associate with Debevoise & Plimpton LLP, assisted with the preparation
of this article.
    1 456 U.S. 844, 854 (1982).
    2 Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264-65 (9th Cir. 1996); Hard Rock Cafe Licensing Corp. v. Concession
Servs., Inc., 955 F.2d 1143, 1148 (7th Cir. 1992).
    Polo Ralph Lauren Corp. v. Chinatown Gift Shop, 855 F. Supp. 648, 650 (S.D.N.Y. 1994).
    4 Gucci Am., Inc. v. Frontline Processing Corp., 721 F. Supp. 2d 228, 247-48 (S.D.N.Y. 2010).
    5 600 F.3d 93 (2d Cir.), cer. denied, 131 S. Ct. 647 (2010).


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