The Tiffany standard is creating a flood of counterfeit microelectronics online

The Tiffany standard for contributory liability-requiring contemporary knowledge of which particular listings are infringing-improperly allows ecommerce platforms to insulate themselves from liability. Online marketplaces organize their operations in such a way as to avoid contemporary knowledge and then essentially suggest that they are too large to know which listings are infringing, all the while profiting from every sale by their sellers. 429 The burden is disproportionately placed on brand owners to continually screen platforms, seek out listings that are potentially counterfeit, and send takedown notices to the platforms. 430 It has been repeatedly described as a game of "whack-a-mole." 431 Further, by the time the infringing listings are removed, the items may have already been sold, and new listings may have appeared. That is out of touch with today's world. 432 It has led to a flood of counterfeit products, including counterfeit microelectronics, being sold on the internet, and the result is lost sales by original manufacturers, damage to brands, and threats to public health and safety.

The Lanham Act should be amended to specifically recognize contributory liability for anyone who knowingly facilitates direct infringement by a third party. That should include an online marketplace that "continues to supply its [service] to one whom it knows or has reason to know is engaging in trademark infringement." 33 "Reason to know" (i.e., constructive knowledge) of infringing activity should be context-dependent and could be demonstrated in multiple ways, including sample purchases that were identified as counterfeit, unusually large numbers of listings for an item, unexpectedly low prices, suspicious images, law enforcement raids, and other indicators. Requiring actual knowledge of specific infringing acts is not the correct standard. Imposing liability when an intermediary has constructive knowledge that infringing activity is occurring will redistribute the burden and force e-commerce platforms to bear partial responsibility for identifying and curtailing that activity. It could also encourage electronic parts manufacturers to pursue civil actions against online purchasing platforms hosting vendors of counterfeit parts.