Could you be liable for the infringing activities of your tenants? It may surprise you to learn that the answer is “yes.” In a number of cases, commercial landlords have been held responsible for contributory trademark infringement.
Although contributory trademark infringement is not specifically addressed in the federal trademark statutes, the US Supreme Court has endorsed this judicially created doctrine.
Contributory trademark infringement occurs not only when someone intentionally induces a trademark infringement, but also when someone knows or should have known that they are supplying products or services to an infringer.
In the cases finding commercial landlords liable for contributory infringement, courts emphasize the fact that these landlords either knew, or should have known, about their tenants’ infringing activities, but continued to rent to the infringers, doing nothing to stop the infringing conduct.
Just last month, a jury awarded The Swatch Group Ltd. $1.1 million, finding a SoHo landlord liable for the sale of counterfeit watches by its tenant.
Swatch argued that the landlord knew that the tenants were selling counterfeit watches since there had been two nuisance disputes with the city and a previous lawsuit, all involving infringing activities.
So what can you, as a landlord, do to protect yourself? You probably aren’t in a position to monitor every product your tenants sell, but don’t ignore infringement notices from trademark owners or even gossip you hear about your tenants’ illegal activities – promptly investigate and take appropriate action.
Further, before providing a lease to a new tenant, or any kind of amendment to a current tenant, you should make sure that the lease requires tenants to comply with all applicable laws and contains appropriate indemnification provisions. In addition, you should also be extremely careful who you rent to.
If, on the other hand, you are a trademark owner whose mark is being infringed, you’ll want to determine whether the infringer rents its space and, if so, determine whether it would be appropriate to notify the landlord of the problem in writing.
This must be done, if at all, with care, because in some circumstances, such a notification could be found to be “tortious interference,” and subject you to liability for interfering in the contractual relationship between the landlord and the tenant.
Please feel free to contact us if you have any questions about, or need any help with, commercial leases, trademarks, or tortious interference.
Photo by Green Chameleon on Unsplash
