SEO services company found guilty in lawsuit over counterfeit merchandise sold by a client
Written by: DAMG
SOUTH CAROLINA – A federal court has ruled against an SEO services firm, holding them financially responsible for the sale of counterfeit golf cubs by a client e-retailer.
A federal judge in South Carolina has found Bright Builders Inc. guilty 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. She also ordered Christopher Prince, the owner of the site, to pay $28,250 to the plaintiff, Cleveland Golf Company Inc.
Cleveland Golf is a golf club manufacturing company that is part of Srixon, a subsidiary of Japan’s Sumitomo Rubber Industries. The company filed the suit in 2009, initially against CopyCatClubs.com. The complaint was then amended to include Bright Builders after learning that the SEO company created the retailer’s e-commerce site.
Cleveland Golf argued that Bright Builders should have known that Prince’s e-commerce site was illegally selling counterfeit goods.
“For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning,” says Christopher Finnerty, a lawyer 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.”
According to Finnerty, this is the first time that an internet marketing service provider has been found liable for contributory infringement without prior notification of counterfeit sales by a client retailer.
CopyCatClubs.com is no longer in business, however, in 2009 the site’s home page stated that it offered “the newest clubs from brands such as: Callaway golf, Ping golf, Nike golf, Taylor Made golf, Titleist golf, Cobra golf, Mizuno golf, Cleveland golf, Yes and Odyssey putters.”
The site also stated, “Along with our exceptional customer service, we are your one stop shop for the best copied golf equipment on the Internet.”
Although this is the first time an SEO services company has taken the fall for a client, the issue of companies selling counterfeit merchandise is nothing new.
Stephen Gingrich, vice president of global legal enforcement and human resources for Cleveland Golf/Srixon, said it’s a problem that has been linked as of late to SEO services.
“Counterfeiting has existed for thousands of years but has been a localized issue,” Gingrich explained. “The Internet, ease of global shipping and payments, combined with SEO’s and web hosts injecting steroids into the situation has brought the issue into every consumer’s living room.”
Bright Builders and Prince did not comment.