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Luxottica Group v. Airport Mini Mall, LLC – Landlord liable for trademark infringement for tenants selling counterfeit goods

| Category: Firm News

On August 7, 2019, the U.S. Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) decided Luxottica Group v. Airport Mini Mall, LLC, finding landlords may be contributorily liable for their tenants’ or subtenants’ direct trademark infringement.

 

            Yes Assets, LLC (“Yes Assets”) owns a 79,000 square-foot shopping center, which accommodates approximately 130 booths for vendors. Since December 1, 2009, Yes Assets leased the shopping center, and the booths, to Airport Mini Mall, LLC (“AMM”). In turn, AMM subleased the booths to vendors (“subtenants”). Yes Assets provided AMM and its subtenants services which included: lighting, water, sewerage, maintenance and repairs, painting, cleaning, and a parking area for customers.

 

            Over the course of AMM’s lease, there were three law enforcement raids where subtenants were arrested and alleged counterfeits of Luxottica eyewear and other brand products were seized. On two occasions, Luxottica – owner of U.S. registered trademarks for Ray-Ban and Oakley –  notified Yes Assets and AMM (collectively, “Defendants”) that their subtenants were not authorized to sell Luxottica’s eyewear and any item resembling the Ray-Ban and Oakley marks were counterfeit. Luxottica also identified several specific vendors suspected of selling counterfeit eyewear. Further, there were three law enforcement raids, in which officers executed search warrants, arrested subtenants, and seized alleged counterfeits of Luxottica eyewear and other brand products. Nevertheless, Defendants continued to lease booths to the infringing subtenants. Luxottica sued Defendants for contributory trademark infringement under § 32 of the Lanham Act in the U.S. District Court for the Northern District of Georgia (“District Court”). After the District Court trial concluded, a jury found Defendants liable for contributory trademark infringement. Defendants timely appealed

 

            On appeal, the Eleventh Circuit first explained that contributory trademark infringement requires: (1) a person or entity commits direct trademark infringement under the Lanham Act; and (2) the defendant (a) “intentionally induces” the direct infringer to commit infringement, (b) supplies a “product” to the direct infringer whom it “knows” is directly infringing (actual knowledge), or (c) supplies a “product” to the direct infringer whom it “has reason to know” is directly infringing (constructive knowledge). The Eleventh Circuit further noted that Defendants did not contest that the above mentioned provided services constituted supplying a “product,” but argued that they lacked actual knowledge of their respective tenants’ direct infringement.

 

            With respect to the element of actual knowledge, the Eleventh Circuit emphasized that Luxottica’s notice letters gave the Defendants at least constructive knowledge of specific subtenants that were infringing Luxottica’s products.. Moreover, in at least one law enforcement raid, the Defendants’ property manager compiled a list of booths where law enforcement had seized goods, and informed Defendants of conversations he had with subtenants. Taken as a whole, the Eleventh Circuit found sufficient evidence to support the jury’s finding that the Defendants had at least constructive knowledge of subtenants directly infringing Luxottica’s marks.

 

            Therefore, the Eleventh Circuit upheld the jury’s verdict finding the Defendants liable for contributory infringement. Accordingly, the Eleventh Circuit acknowledged providing utilities to (sub)tenants constitutes providing a “product,” and that at least constructive knowledge is sufficient to prove contributory trademark infringement.  

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