| According to the Department of Commerce, losses | | | | to the alleged infringer. |
| to U.S. businesses from the counterfeiting of | | | | Cease and desist letters sent under California's |
| trademarked consumer products are estimated at | | | | proposed new trademark law appear somewhat |
| $200 billion a year. A model trademark law proposed | | | | related in function to the "takedown notices" under |
| by the International Trademark Association and | | | | the Digital Millennium Copyright Act. The takedown |
| currently winding its way through the legislative | | | | provisions of the DMCA essentially compels an |
| process in California includes a provision which | | | | internet service provider to disable access to material |
| appears to be an attempt to slow this ever growing | | | | allegedly infringing the complainant's copyright or |
| enterprise. | | | | otherwise face the loss of immunity from claims of |
| The proposed new trademark law provides that the | | | | contributory infringement. Similarly, under the |
| owner of a state registered mark may bring an | | | | proposed trademark law, an ISP who receives a |
| action for infringement against any persons that | | | | cease and desist demand could face a trademark |
| "knowingly facilitate, enable, or otherwise assist a | | | | infringement claim if it continues to provide access |
| person to manufacture, use, distribute, display, or sell | | | | for the infringer or otherwise continues to facilitate |
| any goods or services bearing any reproduction, | | | | the infringing activity. |
| counterfeit, copy, or colorable imitation of a mark | | | | What about if the alleged infringer is not engaged in |
| registered under this chapter, without the consent of | | | | any infringing activity, or the complaining party is |
| the registrant." Under the new trademark law, a | | | | compelled by a desire to hobble its competition? |
| person is presumed to have acted knowingly if that | | | | Under the DMCA, the alleged infringer may send the |
| person continues to engage in the complained of | | | | ISP a counter notice claiming non-infringement. If the |
| activity following delivery and receipt of a cease and | | | | ISP receives a proper counter notice the ISP is |
| desist demand letter containing certain language and | | | | prevented from disabling access to the complained of |
| information. | | | | material and maintains its immunity from contributory |
| In the case of brick and mortar commerce, this | | | | infringement. However, under the proposed |
| provision appears to be entirely reasonable. If a | | | | trademark law if the alleged infringer insists that it is |
| landlord leasing retail space to a business receives a | | | | not engaged in any infringing activity the ISP is stuck |
| cease and desist letter from a mark owner, the | | | | between the proverbial rock and a hard place; the |
| landlord has the ability to visit the property and | | | | ISP is left to decide what it must do. If the ISP |
| investigate the claim. Likewise, a swap meet operator | | | | believes the alleged infringer, who may also be the |
| receiving such a cease and desist letter can | | | | ISP's customer, but later turns out to be wrong, the |
| investigate the claim and, presumably after personally | | | | ISP could face infringement liability. If the ISP |
| inspecting the complained of goods, would have the | | | | terminates service to its customer and it is later |
| ability to determine whether the goods are infringing | | | | determined that its customer was not engaging in |
| or legitimate. Given the ability to reasonably | | | | any infringing activity, the ISP could possibly face a |
| investigate any such infringement claims, it is | | | | breach of contract claim. Even if the ISP has |
| reasonable that persons akin to landlords and swap | | | | language in its contract which allows it to terminate |
| meet operators bear some responsibility for | | | | the customer's contract, firing a customer is not |
| merchandise sold on their premises. However, the | | | | good for business. |
| question being posed now by Internet activists such | | | | Given the prospect of litigation or the fallout from |
| as the Electronic Frontier Foundation is how such a | | | | firing a customer, ISPs and other service providers |
| provision will play out in cyberspace. | | | | would rather terminate a contract then face litigation. |
| While companies such as Google, Yahoo and eBay | | | | An unscrupulous brand owner could take advantage |
| have a large enough legal department to handle the | | | | of this by sending cease and desist letters to end |
| predicted onslaught of cease and desist letters, | | | | truthful but unfavorable comparative advertising or |
| smaller providers would be hard pressed to deal with | | | | other non-infringing uses of its marks. Unless the |
| the receipt a significant number of cease and desist | | | | California legislature further amends its proposed |
| letters in a cost efficient manner. Rather than face | | | | trademark law to address the untenable position ISPs |
| litigation and any possible adverse judgment, its likely | | | | and service providers would be placed in, brand |
| that a smaller provider would rather terminate service | | | | owner bullying is certain to occur. |