The duties of online service providers


Susan Kayser

Is a host or sponsor of online content obliged to police itself to prevent counterfeiting by third parties using its services? If yes, what is the extent of that duty? And how much is enough? Susan Kayser investigates.

An online service provider (OSP) may refer to an e-commerce marketplace, Internet service provider, web host, web designer, or another OSP. The US decisions to date show that OSPs that have mechanisms in place to screen or alert them to direct trademark infringement or counterfeiting—and use those mechanisms— have typically been found not liable.

But mechanisms need to be in place regardless of any notice of a claim from a rights owner—an OSP cannot sit back and wait for specific notice. Nor can OSPs assist or facilitate counterfeiting by ‘knowingly’ failing to prevent infringement. OSPs also need to ensure that their neutral customer assistance does not facilitate counterfeiting; sales needs to communicate with the legal team—and vice versa.

An OSP can be liable for another’s direct counterfeiting or trademark infringement if it intentionally induces someone to infringe, or if it continues to supply its services to someone whom it knows, or has reason to know, is engaging in trademark infringement. A plaintiff must show that the OSP had both ‘knowledge’ of the infringement, and ‘direct control’ and monitoring of ‘instrumentality’ used to infringe.

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