Bright Builders, a website builder and SEO firm has been held liable in a South Carolina federal court in a case in which it was accused of enabling the sale of counterfeit goods.
"A federal judge in South Carolina entered a judgment against Bright Builders Inc. on counts of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com. Judge Margaret B. Seymour of the U.S. District Court for South Carolina ordered Bright Builders to pay $770,750 in statutory damages and Christopher Prince, owner of the web site, $28,250, according to lawyers for the plaintiff, Cleveland Golf Company Inc."
The firm also hosted the site, so this could also be a serious warning to both marketing consultants and web hosts that they could be legally responsible for what their clients do with their services.
The lawsuit was filed by the Roger Cleveland Golf Company, which makes golf clubs and related products, accusing Christopher Prince, the owner of the copycatclubs.com web site, of selling counterfeit Cleveland clubs. It also contended that Bright Builders helped Prince, and his company, Prince Distribution, to build a web site. This included helping with search engine optimization -- so that the site would come up on searches for Cleveland's trademarked terms. Bright Builders denied the charges in a written motion, and hadn't responded to a request for comment by publication time.
According to the plaintiffs, Bright -- like many site hosting companies -- provided SEO services, including review of the sites for search engine visibility, a "quick start" for marketing, keyword research, a "tune up" including a "keyword rich title and description," along with submission of the site to more than 2,500 search engines and directories. The word "Cleveland" was embedded within the site metadata, the plaintiffs say, and the online store featured marketing copy advertising that, "we're your one stop shop for the best COPIED and ORIGINAL golf equipment on the internet."
The jury found that web hosts and SEO's cannot rely solely on 3rd parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host."
"For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning," wrote Christopher Finnerty, a partner at Nelson Mullins Law Firm in Boston who represented Cleveland Golf and its parent company, Srixon.