A federal jury in California has held two Web hosting companies and their owner liable for contributory trademark and copyright infringement for hosting sites that sold counterfeit Louis Vuitton goods and not acting even after Louis Vuitton had sent numerous notices to the Web hosting company.

In a decision last week, the jury awarded damages totaling more than $32 million against hosting companies Akanoc Solutions Inc., Managed Solutions Group Inc their owner Steven Chen for knowingly allowed several Web sites they hosted to sell products that infringed Louis Vuitton’s copyrights and trademarks.

The US Digital Millennium Copyright Act’s (DCMA) protects ISP from contributory infringements if they can prove that they do not have actual knowledge of the infringement and upon obtaining such knowledge acts expeditiously to remove, or disable access to, the material  and does not receive a financial benefit directly attributable to the infringing activity. In this instance however the Web hosts had been informed of the activity by Louis Vuitton but still refused to implement a policy for removing the offending sites, which was their responsibility.

This is said to be the first successful application on the Internet on contributory liability for trademark infringement.

Though this looks like a clear case of non compliance on the part of the web hosts, in reality, it would be difficult for web hosts to scrutinize between valid complains before acting upon it, as it is no legal expert to scrutinize trademark infringements and cannot pull the plug off its customers without being 100% sure.

Advertisements