US Court of Appeals for the Sixth Circuit: Redbubble could be held liable for direct infringement arising from – mondaq.co.uk | Candle Made Easy

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Ohio State Univ. v. Redbubble, Inc., 6th Cir., No. 19-03388, 2021 US App. LEXIS 5610 (02/25/2021)

Online shopping has transformed the US market and there are a variety of digital marketplaces that allow consumers to shop online. in the Ohio State Univ. v. Redbubble, the US Court of Appeals for the Sixth Circuit, has issued an important ruling regarding the responsibility (and potential liability) of companies like Redbubble that operate online marketplaces for facilitating online transactions between consumers and sellers when they Transactions involving trademark infringing products.

Redbubble is an online marketplace for print-on-demand products such as clothing, phone cases, stickers, stationery, and wall art featuring user-submitted artwork. The process begins when independent artists upload their artwork to Redbubble’s website and consumers place an order for a customized item featuring the artwork. Upon receipt of an order, Redbubble arranges for the product to be manufactured and shipped through third-party manufacturers or carriers, and rewards artists with a portion of the proceeds from the sale. The finished print-on-demand product is delivered to the consumer in packaging bearing the Redbubble logo, garments bear Redbubble tags, and returns and refunds are processed by Redbubble. Although Redbubble arranges and directs the manufacture of the Products, Redbubble’s Terms of Service state that the artists (not Redbubble) are the “sellers” of the Products.

Ohio State University (“OSU”) filed a lawsuit against Redbubble, alleging that among other thingsthat Redbubble was liable for direct trademark infringement as a result of the sale of goods on the Redbubble website infringing various OSU trademarks.

Redbubble sought summary judgment on the ground that Redbubble did not “use” OSU’s trademarks because Redbubble did not design, manufacture, or handle the products and never acquired ownership of any of the allegedly infringing products. The district court agreed, granting summary judgment to Redbubble. The district court concluded that Redbubble merely provides a platform for artists to sell products and access Redbubble’s relationships with manufacturers and shippers. In other words, the district court concluded that Redbubble’s platform was merely a “transaction broker”, not the seller of the products, and that Redbubble therefore had not “used” OSU’s trademarks in commerce (a necessary element for a direct trademark infringement). The district court concluded that Redbubble was comparable to Amazon, which was a “neutral intermediary” between consumers and third-party sellers.

OSU appealed and the Sixth Circuit was overturned. The Court of Appeals ruled that in determining whether Redbubble had “used” OSU’s trademarks in commerce, the district court “applied the Lanham Act too narrowly” and failed to consider the essential manifestations of Redbubble
does Engage in the manufacture, shipment, and sale of the allegedly infringing products. The Court of Appeals specifically noted that the factual records in the District Court were “sparse,” but it “appears that products ordered on Redbubble’s website do not yet exist, but only come into being when ordered through Redbubble and delivered in Redbubble packaging with Redbubble tags.” The Court of Appeals compares the extent of Redbubble’s involvement to that of Amazon, which does not produce products – rather, Amazon is merely facilitating a transaction for a product that already exists, by connecting sellers with buyers. Given these facts the appeals court ruled that the district court “had erred in clearly placing Redbubble on the passive end of the liability spectrum”.

Accordingly, the Court of Appeals ruled that summary judgment was not appropriate and that the case should be remanded to the district court for further consideration and findings of fact regarding “the degree of control and involvement by Redbubble over the manufacture, quality control and supply of goods.” Consumer” and “whether the infringing goods can be fairly tied to Redbubble for liability purposes.”

It will be interesting to see if the circuit court on remand finds that the factual records are sufficient to hold Redbubble liable for direct injury. Additionally, we’ll have to wait and see if other district courts outside of the Sixth Circuit will invoke the Sixth Circuit’s decision to rule that Redbubble or similar print-on-demand platforms can be held liable for direct trademark infringement.

But in the meantime, it’s important to note that not all online marketplaces are treated equally when it comes to the sale of allegedly infringing goods on their websites. Rather, the question is presented as a spectrum that depends on the platform’s level of involvement in the manufacture, delivery, and sale of its products.

The content of this article is intended to provide a general guide to the topic. In relation to your specific circumstances, you should seek advice from a specialist.

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