$32M Louis Vuitton judgment shows limits of ISP safe harbors

2 09 2009

The best feature of the much-maligned Digital Millennium Copyright Act (DMCA) is its “safe harbor” for Internet service providers, who can’t be held liable for what customers do using their networks. Mostly. There are limits, and Louis Vuitton found them this week in a federal court. The luxury goods maker won $32 million from two ISPs and the man who ran them after proving to a jury that the ISPs had full knowledge that they hosted mainly websites for counterfeit goods—and refused to take action.

The two ISPs are Akanoc and Managed Solutions Group, both run out of Fremont, California by one Steven Chen. According to Louis Vuitton’s July 2008 complaint, Chen’s companies “were formed for and exist primarily to facilitate the promotion and advertisement of offers for counterfeit and infringing merchandise.” The ISPs hosted a huge array of sites offering fake Vuitton purses, wallets, and bags—sites like Luxury2us.com, Louis-vuitton-bags.org and HandBagSell.com.

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