Can A Landlord Be Held Liable For Its Tenant’s Trademark Infringement?

Fox Rothschild LLP

Fox Rothschild LLP

Can landlords, whose tenants infringe on others’ trademarks, be held liable for trademark infringement? According to the 11th Circuit, the answer is yes. In Luxottica Group v. Airport Mini Mall, LLC, the 11th Circuit determined that a landlord whose tenants sell counterfeit goods can be liable for contributory trademark infringement if the landlord either stayed willfully blind to or had knowledge of the tenant’s infringing actions.

In its decision, the 11th Circuit assessed whether Airport Mini Mall’s (“AMM”) actions constituted contributory trademark infringement. Under the Lanham Act, a defendant may be liable for contributory infringement if (1) another entity commits direct trademark infringement, and (2) the defendant either intentionally induces the infringement, has actual knowledge of the infringement, or has constructive knowledge of the infringement. To support a showing of constructive knowledge, a plaintiff can demonstrate that a defendant remained “willfully blind” to the infringing actor’s unlawful conduct, which takes place when a defendant suspects wrongdoing but fails to investigate it. Importantly, the 11th Circuit determined that “a landlord may be contributorially liable for its (sub)tenants’ direct trademark infringement if the landlord intentionally induces the infringement or knows or has reason to know of the infringement while supplying a service (such as space, utilities, or maintenance) that facilitates it.”

During AMM’s time as landlord of the shopping center in question, the mall experienced three law enforcement raids that seized alleged counterfeits of Luxottica’s products. Even more, during AMM’s tenure, Luxottica sent two letters notifying AMM that its subtenants may be selling counterfeit products. Despite those events, however, AMM failed to determine whether their tenants’ products were in fact counterfeits, did not terminate their leases, and even renewed the leases of multiple potentially infringing tenants. As a result of these actions, the 11th Circuit determined that AMM was willfully blind and responsible for contributory infringement: “even if liability for contributory trademark infringement requires the defendant to have knowledge of specific acts of direct infringement, the evidence in this case was sufficient for a reasonable jury to find that the defendants had at least constructive knowledge of (or were willfully blind to) specific acts of direct infringement by their subtenants.”

If you are a landlord, it is likely best to avoid renting commercial space to tenants undertaking infringing behavior, and if you’re notified of such behavior, it is likely best to avoid staying “willfully” blind to that infringement. Otherwise, you could ultimately find yourself liable to those businesses enforcing their trademarks or other intellectual property rights.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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