881 F. Supp. 2d 695
D. Maryland2012Background
- Coach and Coach Services sue Farmers Market & Auction and Burroughs for multiple IP claims related to counterfeit Coach goods sold at a Maryland flea market.
- Raids in 2010 and 2011 at the market led to seizures of hundreds of counterfeit Coach items and criminal prosecutions of vendors.
- Coach filed a cease-and-desist and investigators observed ongoing sales of items bearing Coach marks at the market.
- Market Defendants moved to dismiss; Court granted in part and denied in part, ruling the complaint plausibly alleges contributory liability.
- Third Amended Complaint asserts counts for contributory trademark counterfeiting, infringement, trade dress, false designation, false advertising, dilution, and copyright infringement.
- Court analyzes whether contributory liability extends beyond manufacturers/distributors to market operators and whether allegations support liability on multiple counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contributory trademark counterfeiting liability | Coach asserts Burroughs knew or should have known and facilitated violations. | Market Defendants argue Inwood applies only to manufacturers/distributors. | Counts X and XI survive; knowledge or willful blindness shown. |
| Contributory trade dress infringement | Coach alleges market operators knew of ongoing trade dress use and failed to prevent it. | Market Defendants dispute cognizability and sufficiency of facts. | Contributory trade dress infringement cognizable; facts show knowledge/willful blindness and failure to act. |
| Contributory false designation of origin and false advertising | Market knew or should have known of infringement and continued supplying the site. | Argue lack of actionable contributory liability or insufficient facts separate from trademark claims. | Contributory false designation/advertising viable; continued operation supports liability. |
| Contributory trademark dilution | Market knowingly or willfully blind to dilution, yet rent space to violators. | Question whether contributory dilution is recognized and how it applies. | Cognizable contributory dilution; allegations show knowledge/willful blindness and encouragement via rental of space. |
| Contributory copyright infringement | Vendor copying of Coach Op Art design; market provided site for infringing activity. | Challenge to pleading specificity; rely on heightened pleading standard for copyright. | Direct copyright infringement plausibly pled; contributory infringement viable; standard defense rejected. |
Key Cases Cited
- Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144 (4th Cir.2012) (contributory infringement issues require fact-specific disputes)
- Inwood Laboratories, Inc. v. Ives Labs., Inc., 456 U.S. 844 (U.S. 1982) (establishes contributory liability principles for intellectual property)
- Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir.1996) (permitted evidence of knowledge/awareness for contributory liability at flea markets)
- Hard Rock Licensing Corp. v. Concession Services, Inc., 955 F.2d 1143 (7th Cir.1992) (willful blindness can satisfy actual knowledge for Lanham Act liability)
- Fare Deals Ltd. v. World Choice Travel.Com, 180 F.Supp.2d 678 (D.Md.2001) (noting limits of knowledge and actions after notice to infringers)
- Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th Cir.1999) (contributory dilution recognized; knowledge-based liability)