Contributory Infringement for retail-center landlords whose tenants sell infringing Goods

Those who encourage, or benefit from, acts of infringement can be held liable just as readily as those who actually sell infringing goods.  The recent case of Coach Inc. v. Goodfellow, 717 F.3d 498, 106 U.S.P.Q.2d 2033 (6th Cir. 2013) is a good example of what can happen to retain-center landlords who do not take the appropriate steps to prevent the sale of infringing items by its tenants.

The Defendant, Goodfellow owned and operated a flea market where vendors sold counterfeit products bearing Plaintiff’s COACH trademarks.  Goodfellow controlled the flea market and had the ultimate authority to allow and remove vendors who sold goods at its flea market.  Goodfellow had previously received various correspondences from COACH and other intellectual property owners as well as the local district attorney general notifying Goodfellow of the counterfeit sales within its flea market.  The Court determined that Goodfellow had knowledge of and willful blindness toward the ongoing infringing activities of its vendors and thereby facilitated those infringing activities.  The Court did recognize that Goodfellow had taken some minor steps to reduce the vendors’ infringing activities but ultimately determined that such steps were insufficient.

The Court affirmed the district court’s grant of summary judgment in favor of Coach on the issue of Contributor Infringement and entry of judgment on damages and attorney’s fees and cost.  This was a costly lesson for Goodfellow which could have easily been avoided had Goodfellow sought appropriate legal advice and followed such advice.