The chain works like this:
The online hawkers of handbags bearing the label of a famous high-end maker get their website services from a firm that "hosts" the websites (running the servers, granting "bandwidth", and giving IP ("Internet protocol") addresses) — all for a fee. The hosting firm in turn obtains the servers, bandwidth, and IP addresses under leases from an outfit that owns them.
The problem comes because the handbag sellers use fake copies of the maker's label to make their goods more buy-worthy. But the maker had has registered the label/mark with the United States Patent and Trademark office. And the maker very much wants to protect his good name.
Who can Louis Vuitton sue for trademark infringement?
LV has a no-doubt-about-it claim for "direct" infringement against the online handbag hawkers. But good luck chasing them down. They reside in China and have no U.S. presence or assets.
What about the third link in the chain — the people who own and lease the servers, bandwidth, and IP addresses from their offices in San Jose, CA? Can LV tag them for label larceny?
And what of the middle link — the American firm that hosts the websites?
The Ninth Circuit held that Monsieur Vuitton has a shot at showing "contributory" infringement of his trademarks by both the hoster/lessee and the owner/lessor. But, the panel ruled, he had to show that each supplied its services to the direct infringers with knowledge of their infringing conduct while having the ability to stop the direct infringers from using their services to infringe.
LV failed to prove at trial that owner/lessor Managed Solutions Group had any means to stop the Chinese firms' infringing acts, the Ninth Circuit ruled. But Akanoc Solutions, the hoster, could have shut down the infringement after getting Vuitton's demands that it do so. The court thus affirmed the district court's axing of the claims against MSG and entry of judgment against Akanoc for contributory infringement. Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., No. 10-15909 (9th Cir. Sept. 12, 2011).