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.
Several months ago, we alerted you to such a case decided by the US District Court for the Southern District of New York.
Now a similar case has been decided by the US Court of Appeals for the Eleventh Circuit, which covers Alabama, Florida, and Georgia.
That court upheld a jury award of nearly $2 million to Luxottica Group, S.p.A. and its subsidiary Oakley, Inc. These luxury eyewear manufacturers had sued the owners of a discount mall for contributory trademark infringement.
The mall’s subtenants were selling counterfeit eyewear labeled with Luxottica and Oakley’s RAY-BAN and OAKLEY trademarks. In fact, there were three law enforcement raids at the mall, during which officers executed search warrants, arrested subtenants, and seized alleged counterfeits of Luxottica eyewear and other brands’ products.
The mall owners decided not to take action against the subtenants unless the subtenants were actually convicted of a crime, despite the fact that they had received letters from Luxottica notifying them of the counterfeit eyewear being sold in booths operated by mall subtenants.
The Eleventh Circuit found that the evidence at trial was sufficient for a reasonable jury to find that the defendants either knew of or had reason to know of, specific acts of direct infringement by their subtenants.
Some courts have held landlords liable for contributory copyright infringement as well.
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 and copyright 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 be extremely careful who you rent to.
If, on the other hand, you are a trademark or copyright owner whose rights are 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, copyrights, or tortious interference.
Photo by Tyrel Johnson on Unsplash
