Principled Standards versus Boundless Discretion: A Tale of Two Approaches to Intermediary Liability Online

Abstract

Over the past decade, courts have developed two distinct approaches in evaluating trademark claims against online intermediaries. In one – contributory infringement – courts struggle with the tension between preserving legitimate, non-infringing uses of technologies, on the one hand, and minimizing infringement, on the other. In the other – direct infringement – liability turns on perceived wrongdoing by intermediaries whose own behavior increases the risk of consumer confusion. This second type of liability boasts neither a clear doctrinal framework nor a coherent normative vision. Most troublingly, the scant case law has paid little attention to issues at the core of secondary liability analysis – namely, the need to strike a balance between infringing and non-infringing uses, and the worry that liability might threaten legitimate uses of trademarks that enhance competition and increase consumer choice. This brief essay compares these two visions of intermediary liability as reflected in recent case law. It contends that, if direct infringement is here to stay, it must accommodate market actors’ right to make non-infringing uses of trademarks, and intermediaries’ right to help them.

Keywords: trademark law, contributory infringement, online intermediaries, intellectual property, search engines, Internet auctions, Rosetta Stone v. Google, Rescuecom v Google

JEL Classification: K11, K19, K39