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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.


Microsoft’s appeal, against the last month’s decision imposed by the U.S. District Court in I4i v. Microsoft Corp patent infringement case, has been successful in staying the district court order on its Word program.

The U.S. Court of Appeals for the Federal Circuit (Washington) put on hold the order imposed by the district court until the final hearing in the appeal proceedings. The last month’s decision by the District court had found Microsoft infringing patents relating to customizing XML, a way of encoding data to exchange information among programs and ordered the world’s biggest software maker to alter its Word Software program by 10th Oct or halt its sales in addition to a $200 mn fine.

Oral arguments on the appeal are scheduled for Sept. 23 in Washington.

In the case of Versata Software Inc. v. SAP America Inc., the  U.S. District Court (Eastern District of Texas (Marshall)) has found SAP guilty and ordered a payments of $138.6 million to the respondent for violation of its  patent rights. Versata Software claimed that SAP wrongfully used technology covered by a patent relating to the way items are priced and systems configured for products with multiple levels. According to Bloomberg  reprots this is 4th highest in US and the 11 highest overall damages awarded in a Patent litigation this year.

Read Bloomberg, IndiaTimes or PCWorld reports for more details