Cleveland Golf won a legal victory with a jury verdict last week, and entry of judgment Monday, in South Carolina federal district court in a first-of-its kind trademark infringement case. (Roger Cleveland Golf Company, Inc. v. Prince (et al.), March 14, 2011)
Based on the jury's verdict, the court entered judgment Monday against search engine optimization (SEO) and web-hosting firm Bright Builders Inc. on counts for contributory trademark infringement and unfair trade practices for assisting with the construction and hosting of www.copycatclubs.com (Copycat), an online business that sold counterfeit Cleveland clubs. The judgment included an award of $770,750 in statutory damages against Bright Builders and $28,250 in statutory damages against Christopher Prince, who owned the website.
This represents the first time a SEO/web host or other Internet intermediary was found liable for contributory infringement without having first received actual notification of the counterfeit sales from a third party.
The case was presented and pursued by Cleveland Golf/Srixon, based on a theory that Bright Builders knew, or should have known, of the infringing conduct based on the name of the website, the content of the website and certain discussions Bright Builders had with Prince regarding his website.
The jury accepted this theory, finding Bright Builders was liable for contributory trademark infringement of 11 of Cleveland Golf's registered trademarks.
The lawsuit was filed after Cleveland Golf learned counterfeit golf clubs bearing Cleveland trademarks were being sold online by Copycat and its principals, Prince, and Prince Distribution LLC (Prince).
During discovery, it became apparent Prince had received assistance in creating the website from Bright Builders. As a result, the complaint was amended to include claims against Bright Builders for contributory infringement and unfair trade practices.