The Internet Retailer magazine reports Court holds SEO firm responsible for online sales of counterfeit golf clubs.
An SEO firm was ordered to pay $770,750 in statutory damages because his client sold counterfeit golf clubs. The client was only ordered to pay $28,250. Got that?
Here is an excerpt from the article:
A federal court has ruled that a firm that provided marketing and web hosting services was financially responsible for the sale of counterfeit golf clubs by a client e-retailer.
A federal judge in South Carolina entered a judgment against Bright Builders Inc. on counts of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com. Judge Margaret B. Seymour of the U.S. District Court for South Carolina ordered Bright Builders to pay $770,750 in statutory damages and Christopher Prince, owner of the web site, $28,250, according to lawyers for the plaintiff, Cleveland Golf Company Inc.
“For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning," says Christopher Finnerty, one of the lawyers for Cleveland Golf. “The jury found that web hosts and SEO's cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host."
There is a WebmasterWorld discussion around this ruling. Some say that the SEO company should have been more careful and deserves what they got, while others find it crazy that an SEO firm can be held liable for their client's web sites.
One moderator said:
That's stretching it a bit to me. Go down the slippery slope a bit more and sue: - the web hosting company's Internet backbone provider for providing the conduit for people to access the site - the web hosting company's electric company for providing the electricity to run the site - Google, Yahoo, and Bing for sending people to the site - the company's merchant processor for processing the transactions (especially since THEY definitely should have known about the products being sold)
While others said:
They were doomed from the moment they chose CopyCatClubs as a domain. You know, put a sign on your back that reads "Kick Me!".
Everyone knew what they were doing. As they say, it comes with the territory.
I am a bit shocked by this ruling but I didn't review all the details. Did the SEO company offer a revenue share model? There are a lot of questions but honestly, I just did not dig into the case.
Forum discussion at WebmasterWorld.