Are landlords responsible for their tenant’s trademark infringement? LUXOTTICA v. AIRPORT

Trademark law in the United States grants the owner of a trademark the right to exclude others from using a trademark in a way that is likely to cause consumer confusion. Trademark infringement is the unauthorized use of a trademark in a manner that is likely to cause confusion, deception, or mistake about the source of the products which bear the trademark. A trademark owner can combat trademark infringement by filing a lawsuit against the alleged infringer. The lawsuit can request an injunction to prevent the infringing activity as well as monetary damages for infringement which has occurred.

When people think about trademark infringement they typically think of direct infringement, where the person who is accused of trademark infringement is the person selling the infringing products. Other legal theories exist that can impose liability on a trademark infringement defendant even when the defendant is not the person directly infringing on a trademark. Contributory infringement is not expressly imposed by the Lanham Act, however the United States Supreme Court has recognized that “liability for trademark infringement can extend beyond those who actually mislabel goods with the mark of another.” See INWOOD LABORATORIES, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982).

In INWOOD LABORATORIES, manufacturers had supplied pharmacists with a generic version of a drug whose brand name was trademarked. Some of those pharmacists mislabeled bottles of generic pills as trademarked pills. The plaintiff sued the generic manufacturers instead of the pharmacists on the theory that the generic manufacturers contributed to the trademark infringement. The Supreme Court held that “if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorially responsible for any harm done as a result of the deceit.”

The relationship a contributory infringer selling products to a direct infringer is relatively straight forward. The question then becomes what other business relationships will make a vendor liable for contributing to the trademark infringement of a customer?

LUXOTTICA GROUP, S.P.A. v. AIRPORT MINI MALL, LLC, 18-10157 (11th Cir. 2019) is a case where a landlord was found liable for contributory infringement when the tenant was a direct infringer. The plaintiff in this case is a retailer of many different brands of popular luxury eyewear that are frequently counterfeited. The defendant in this case is the operator of a mall in College Park, Georgia. Three law enforcement raids happened at the defendant’s mall, during which officers executed search warrants, arrested tenants, and seized alleged counterfeits of the plaintiff’s trademarked eyewear. The plaintiff sent the defendant several notices that no tenants of the defendant were authorized to sell the plaintiff’s products. The defendant took no steps to terminate the leases of tenants who were found to be selling counterfeit eyewear.

The plaintiff sued the defendant for contributory trademark infringement and the jury in the case awarded the plaintiff $1.9 million in damages. The defendant appealed to the Court of Appeal for the 11th Circuit.

In its opinion the 11th Circuit held that a landlord may be contributorially liable for its (sub)tenants’ direct trademark infringement if the landlord intentionally induces the infringement or knows or has reason to know of the infringement while supplying a service (such as space, utilities, or maintenance) that facilitates the direct infringement. The 11th Circuit found that the evidence in this case was sufficient for a reasonable jury to find that the defendants had at least constructive knowledge of (or were willfully blind to) specific acts of direct infringement by their tenants. The 11th Circuit affirmed the District Court’s verdict because if found no reversible error and the evidence present at trial was sufficient to support the jury’s verdict.

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