The plan applies the ‘constructive knowledge of trademark infringement’ standard from Luxottica v. AMM to online intermediaries. This isn’t burdensome and already exists for brick and mortar stores

Alternatively, the Supreme Court could adopt a broader but also clearer interpretation of the “reason to know” standard found in Inwood. The Court could hold that without specific notices of infringing posts, e-commerce platforms could satisfy the “reason to know” standard if they are aware that a significant amount of infringing activity is happening on their websites. However, the Supreme Court should only hold platforms contributorily liable if they fail to at least do an investigation.165 This approach is similar to the Eleventh Circuit’s holding in Luxottica.166

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165 What constitutes an investigation depends on various factors such as the scale of the platform or nature of the goods and services being sold. For example, comparing prices and looking at sellers’ past listing or IP address could be an investigation.

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In Luxottica, Oakley and its parent company, Luxottica, sued Airport Mini Mall (“AMM”) in Georgia for contributory trademark infringement.167 Luxottica makes and sells high-end sunglasses using the Ray-Ban and Oakley trademarks.168 AMM owned and operated an indoor mall where it subleased venues to different third-party sellers.169 When police raided those sellers in three separate instances, they found certain vendors in the mall were selling counterfeit Luxottica sunglasses.170 Luxottica also sent two letters to AMM informing them that there were certain sellers in the mall selling counterfeit sunglasses.171 However, AMM did not inspect its sellers nor did it take action to stop its subtenants’ from selling counterfeit sunglasses.172 At the district court, the jury found that AMM was contributorily liable for its subtenants’ direct trademark infringement.173 The was a case of first impression for the Eleventh Circuit, and it affirmed.174

The Eleventh Circuit held that “actual or constructive knowledge of the direct infringers’ identities could arise from many sources,” such as when the defendants could have investigated alleged direct infringement after being put on notice by the Plaintiff that unnamed subtenants’ of AMM may have been selling counterfeits.175 The court reasoned that although Inwood did not create an “affirmative duty to take precautions against the sale of counterfeits,” a reasonable jury could find that Luxottica’s notice letters would prompt a landlord to inspect the Mall’s booths.176 It further explained that the defendants had a responsibility to investigate because “a cursory visual inspection” of 130 booths was not so burdensome. 177 It also reiterated that, “evidence of ‘serious and widespread’ infringement makes it more likely that a defendant knew about the infringement.”178 Finally, the court held that AMM was contributorily liable because the evidence showed that the defendants had at least constructive knowledge because there existed serious and widespread violations that indicated their subtenants were selling counterfeit goods.179

Although Luxottica did not involve the internet or online service providers, it is easy to extend the Luxottica approach to e-commerce platforms. To provide trademark owners and e-commerce platforms clearer guidance on their respective rights and liabilities, the Supreme Court could adopt and extend the Eleventh Circuit’s broader approach to e-commerce platforms when clarifying the Inwood test. The Court could explain that actual or constructive knowledge of the direct trademark infringements could arise from many sources, such as when trademark owners put e-commerce platforms on notice that sellers using their platforms have been selling counterfeit products.180 Furthermore, the Court could establish that e-commerce platforms have a reasonable duty to conduct at least a cursory automated inspection of their website if they receive allegations of direct trademark infringements from trademark owners. Like in Luxottica, this duty is reasonable because a rudimentary automated inspection of e-commerce platforms’ own websites would not be too burdensome.181

The Luxottica approach is less burdensome than the Second Circuit’s approach in Tiffany since it does not require trademark owners to inform the e-commerce platform of every infringing post. 182 Additionally, this approach alleviates a reasonable amount of monitoring duty from the trademark owners and place it on e-commerce platforms. Thus, compared to the Tiffany approach, the Luxottica approach would be better suited to solve the balancing conundrum.