Fake handbags, real bad news for Web host

To some, buying a knockoff designer handbag at a local flea market is a frivolous act, hardly worth a second thought.

Not if your Louis Vuitton, however. The luxury goods manufacturer fought it out in court for more than two years with Fremont, CA-based Akanoc Solutions, an ISP and Web host.

At the heart of the litigation was Louis Vuitton Malletier’s claim that most of the websites hosted by Akanoc were involved with or “trading in” counterfeit goods. Furthermore, Akanoc knew about it and still continued to host the sites in its data center.

There was a time when the courts might have slapped the Web host on the wrist with a cursory fine but this time the judgment made was loud, clear and a pretty harsh $32.4 million worth of damages for "contributory trademark and copyright infringement."

What then are the ramifications for Web hosts and ISPs?

Andy Coombs of Louis Vuitton's legal team said: "This verdict clearly establishes a standard for infringement complaints on the Internet based on trademark...It represents a positive contribution to existing case law and marks the first time statutory damages have been awarded against those found contributorily liable for trademark infringement."

Beyond that Web hosts absolutely need to be fully aware that they have a responsibility to take action if they know counterfeit items are being sold on websites hosted on their servers. It's safe to argue that any illegal acts being conducted online that they have knowledge of needs to be addressed. It's quite apparent now that the courts will make someone pay, one way or the other.