Coach, Inc. v. Sapatis, No. 12–CV–506–PB, 2014 WL 347712 (D.N.H. Jan. 31, 2014).
A New Hampshire district court denied summary judgment as to one the defendants in a contributory trademark infringement case.
Here the plaintiff is Coach, Inc. and Coach Services, Inc., sellers of designer handbags and other goods. One of the defendants is the individual who previously owned and operated the Londonderry Flea Market in New Hampshire, and who currently owns the land upon which the Flea Market operates. Despite having sold the Flea Market to his daughter in 2008, the defendant landowner continues to “volunteer” his time at the Flea Market.
In 2011, private investigators hired by Coach went to the Londonderry Flea Market and asked to speak to the owner. The defendant landowner was summoned and Coach’s private investigators informed him that counterfeit Coach goods were being sold at the Flea Market. The defendant in turn alerted a Flea Market employee and a police officer, and the group accompanied the private investigators as they served the vendors selling counterfeit bags with cease and desist orders. A month later, Coach sent a letter to the “Owner/Manager” of the Londonderry Flea Market, alleging that unlawful activity continued to occur at the Flea Market. The defendant contacted Coach “on behalf of the Flea Market” and attempted to resolve the issue. Months later, the unlawful activities continued and Coach sent the Londonderry Flea Market a third letter. Again, the defendant was the one who contacted Coach in an attempt to resolve the issue.
Finally in June of 2013, Coach brought this action alleging, among other things, contributory trademark infringement against several parties, including the defendant landowner. A contributory trademark infringer is “a provider of a product who (1) intentionally induces another to infringe a trademark or (2) continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement.” This doctrine has also been expanded to govern service providers, such as those who operate flea markets where infringing activity occurs. Here, Coach alleged that the defendant landowner continued to provide his services to vendors that he knew or had reason to know were infringing Coach’s marks.
In evaluating Coach’s claim, the court asked “whether the defendant had sufficient control over the individuals directly engaging in such infringement.” The court concluded that “[the defendant landowner] exercised sufficient control over the Flea Market and its vendors during the period in question for a reasonable jury to hold him contributorially liable for the vendors’ conduct.” Specifically, the defendant was the one who primarily communicated with the customers, the vendors, and third parties such as Coach on behalf of the Londonderry Flea Market, the defendant controlled many aspects of the Flea Market’s operation, such as financial decision-making, and the defendant derived rent payments directly from admission fees and vendor rent payments. Because a reasonable jury could conclude from these facts that the defendant exercised the requisite degree of control, the court denied the defendant’s motion for summary judgment.
Given the facts presented so far, Coach may have this case in the bag.
