When a third party directs or contributes to trademark-infringing activity of another party, the direct infringer’s liability is clear, but the third party may also be liable under the concept of contributory infringement. The U.S. Supreme Court said in 1982 that the manufacturer of generic drugs could be contributorily liable for trademark infringement for providing their product to pharmacists who were using the protected brand name on the labels, in the case of Inwood Laboratories, Inc. v. Ives Laboratories, Inc., explains a comprehensive article in IPWatchdog.
Another situation in which a third party may be contributorily liable in trademark (or copyright) infringement is when infringing activity like selling infringing goods takes place on the premises of property owned or controlled by another. This could take place, for example, in a mall or other rental building that leases commercial space. Potentially responsible parties may include mall or building owners, landlords or rental agents who could be providing a location for infringing activity – like facilitating the behavior. Similar venues with logical potential for hosting infringers include flea markets or swap meets, reports IPWatchdog. This could extend to any venue that allows vendors to sell onsite such as concerts or festivals.
As in other areas of vicarious liability in the law, the issue of third-party infringement liability relies on the idea that the third party has some kind of control over the infringer and that that controlling power gives the third party the responsibility to take action to stop the infringement if it knew about it or reasonably should have known, writes IPWatchdog.
This provides lessons for landlords and property owners as well as trademark owners. Landlords and property owners and their agents could include a prohibition in the lease or rental agreement on infringing activity on the premises. It could also be grounds for termination of the lease. Should the landlord become aware or suspicious of infringement, they should take immediate action to stop it.
The takeaway for trademark owners is to assess potential third parties for infringement liability. While landlords and property owners are potential defendants, other parties may also be, depending on the situation.