\u27We Know It When We See It\u27: Intermediary Trademark Liability and the Internet

The recent history of intermediary liability decisions in copyright and trademark law reflects a notable resistance to rules that might constrain judicial discretion to ferret out bad guys. Indeed, a dichotomy appears to be emerging between two types of defendants: those who want infringement to happen and those who do not. In both copyright and trademark cases, courts are developing two distinct sets of rules to deal with two different classes of intermediaries. Good-faith intermediaries — those with a core business model unrelated to infringement — have an obligation to address infringement upon notice, but need not go out of their way to root it out; a reactive approach will suffice to protect them from liability. Bad-faith intermediaries, on the other hand — those who not only benefit from infringement, but intend it to happen — face certain liability, without regard to specific notice of particular acts of infringement. The trick, of course, lies in understanding how to differentiate between good and bad faith actors. Doctrinally, copyright courts are turning to inducement to do the sorting. Inducers, as bad actors, get none of the protections afforded to other infringement-enabling intermediaries. And inducers are those whose business model depends, at its core, on infringement. Far from defying Sony, I view this development as fully consistent with the normative goal laid out by the Supreme Court in defending the staple article of commerce doctrine: “[t]he staple article of commerce doctrine must strike a balance between a copyright holder\u27s legitimate demand for effective — not merely symbolic — protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce.