On Friday, the 6th Circuit ruled for the first time on the question of whether the owner of a flea market can be liable for contributory trademark infringement, and answered in the affirmative.
The court unanimously found that Frederick Goodfellow, owner of The Southwest Flea Market in Memphis, Tennessee, knew or should have known that some of the market vendors were selling counterfeit Coach products.
Coach Inc. sued Goodfellow in June 2010, after sending him a letter telling him about the counterfeit goods. The local district attorney had sent Goodfellow a notification letter as well, and in April 2010, law enforcement seized the sham Coach products from the market.
In February 2012, a U.S. magistrate judge granted Coach summary judgment, ruling that Goodfellow was contributorily liable for the infringement. The following month, a jury awarded more than $5 million to Coach, a ruling which the 6th Circuit upheld Friday.
The 6th Circuit relied on Inwood Laboratories v. Ives Laboratories when making its decision, a 1982 Supreme Court case that found that when a party knows or should know that someone is infringing a trademark and continues to supply its product to him, that party can be held liable for the infringement. Since Coach had repeatedly notified Goodfellow about the counterfeit goods, he knew or should have known about them, the court said.
Read more at Thomson Reuters.
For more InsideCounsel coverage of counterfeit goods, see below: