Mandating a notice and notice provision immunizes platforms from liability if they pass notice of infringement onto brands – that prevents overenforcement

The secondary liability standard is one of the leading causes for platform uncertainty in dealing with claims of trademark infringement, as we outlined above. Exacerbating this uncertainty is a lack of a second type of safe harbor (as opposed to the first type that we just discussed, categorical exemptions), one that would immunize platforms and other online entities from any trademark infringing behavior by their users. As Part III mentions, "notice and takedown" has become the unintentional default regime for trademark claims (even though the DMCA only applies to claims of copyright infringement) because copyright owners are including claims of trademark infringement within the same notice to the ISPs. 202 Particularly after the Second Circuit decision in eBay, platforms are extremely reluctant to ignore the trademark claims, even where the platform may believe the user had a good argument for noninfringement.203

Although some of the platforms themselves advocate for a DMCA-like safe harbor and process, they caution that it is not as simple as replacing the term "copyright" with "trademark." 204 Due to the differences between the rights underlying copyright and trademark, we believe that a "notice and takedown" system is too blunt of an instrument, as it lacks the ability to take into account the nuanced analysis that is required of claims of trademark infringement.205 For example, while copyright law provides for a relatively discrete examination of "substantial similarity," trademark law requires consideration of many more factors beyond similarity, including the marketing channels used, likelihood of "bridging the gap" between the goods of the defendant and the plaintiff, the defendant's intent, and evidence of actual confusion.206 In the case of counterfeit merchandise, it becomes extremely difficult to tell whether the merchandise is actually fake or not.207 And deferring to the plaintiffs determination opens up a host of potential problems that may facilitate abusive takedown requests, without independent examination.208 Therefore, we suggest that the United States needs to adopt a "notice and notice" framework, borrowing from Canada's recent adoption of such system in the copyright context.209

Unlike a notice and takedown format, which requires an ISP to take down the infringing content upon notice, a notice and notice framework would only require the ISP to forward the notice to the alleged infringer.210 As one commentator argued, a notice-and-notice regime places the emphasis where it should be: on the alleged primary wrongdoer, and takes a more moderate approach to self-regulation by returning "intermediaries to their natural role as middlemen," restoring the responsibility to the courts for enforcement.211 It also respects the privacy and expressive freedoms of end users more effectively than in a notice and takedown regime.212

In an ideal world, these notices from trademark owners would contain allegations of infringement for only those uses that were not within one of the categorical safe harbors as previously discussed. In such a world, then, compliance with the notice-and-notice framework would provide the ISP with immunity from secondary liability of its users' infringement. Even in a less-than-ideal world, compliance with the notice-and-notice framework provides more clarity surrounding procedures, even where the alleged infringements are not valid.

There are still some persistent questions, however. First, however, is the tricky question of who would qualify for the safe harbor and thereby should comply with a notice-and-notice regime. The DMCA, like the European Union E-Commerce Directive, categorizes ISPs into different types, depending on the service they provide. The DMCA's four categories are: (1) transitory digital network communications (the traditional service that ISPs provide, as in access to the internet for users); (2) system caching (this is where an ISP has made an automatic copy of a user's material in order to enable it to transmit); (3) information residing on systems or networks at direction of users (for example, where an ISP stores material on its system, but unlike in category (2), the storage is at the request of the user, and not an automatic technical process like caching); and (4) information location tools (this refers to services provided by search engines).213

While it would be handy to pull in these categories from the DMCA into our new framework, there would be a number of problems with such wholesale importation. First, due to the nature of trademarks and ISPs, an ISP's services could be categorized under more than one category.214 For example, an e-commerce platform could fall into both the system caching, and potentially into the information location tool categories due to how they provide their retail services. This is problematic because for each category, the DMCA provides different conditions under which the ISP must follow in order to qualify for the immunity.215 More concerning is that some categories, such as "information location tools" would be overbroad, as it does not distinguish between the different services that such ISPs offer, such as paid advertising services (like keyword ads) and organic services (where the ISP is simply indexing websites based on the natural searches and hits by users).2 16

One solution to these problems is to meld together the categories provided by the DMCA and by the EU E-Commerce Directive, as suggested by one commentator. Jordan Teague recommends that ISPs should be categorized according to how they interact with trademarks. 217 Teague identifies three different ways in which ISPs interact with trademarks: (a) where an ISP uses trademarks to identify products for sale (including directing users to similar products); (b) hosting content that contains trademarks; and (c) informational index trademark uses.218 Teague then proposes that a trademark safe harbor framework would categorize ISPs into the following non-mutually exclusive types: "(1) information location tools; (2) advertising platforms; (3) online brokers; and (4) passive hosts." 219 This melds together the concepts from the DMCA and the EU E-Commerce, as it brings into the trademark context the recognition that ISPs are often actively interacting with trademarks (online brokers, advertising platforms) and sometimes they are passively storing the information (passive hosts).

With the categories identified, we can turn our attention to the procedures that would be undertaken by such ISPs in a notice-and-notice framework. As briefly outlined above, the trademark notice-and-notice system would be distinguished from the existing copyright notice-and-takedown one because the ISP would not be required to takedown any material. Upon receipt of the notice, the ISP would simply forward onto the user the notice it received from the trademark owner. It would be up to the user to takedown any material that was claimed to be infringing. Thus, the ISP would be immune from any secondary liability if it ended up that the user was in fact infringing another's trademark.220

While this sounds fairly straightforward, the lessons from Canada's implementation of the notice-and-notice regime for copyright infringement claims are helpful to heed. In particular, the potential for abuse needs to be carefully considered. Canada's legislation requires a number of items to be placed within the notice, but leaves it up to regulation as to specific language or template to be used.221 Canada's Minister of Canadian Heritage and Official Languages decided to allow the implementation of the law without issuing any regulations.222 In addition, the legislation provides that the ISP can face statutory damages of a minimum of CAN$5,000 (and up to $10,000) if they do not forward the notice to the alleged infringer.223 The combination of these two items, a lack of regulation and a statutory damages award, has led to subscribers receiving abusive notices that claim they could be subject to a substantial fine (some notices claimed that the subscriber could face a $150,000 fine) and face suspension of their Internet accounts. 224 Both of these claims are false, as Canadian law limits the statutory damages award for noncommercial infringers to C$5,000 and there is no such provision regarding account suspension in the Canadian Copyright Act.225 These abusive notices have led some subscribers to pay the fines, as well to an overall sense of confusion.226

Any notice-and-notice regime adopted in trademark law should likely include provisions regarding a form notice template with required language.227 Serious thought needs to be given to drafting the form notice template that uses clear, non-legalese language, as well as governmental (or nonprofit) resources for the recipient of the notice to turn to with questions or concerns.228 While the goal of a notice-and-notice system is to take the platform out of the role of enforcing trademark owners' rights, the pendulum should not swing so far to where users are left without any protections. As we can learn from the Canada example, it is likely that loopholes will exist in any legislation, even with well-thought out statutory language. Any notice-and-notice legislation should take this into account and build into the system a way in which regulations could be easily implemented to cover any unforeseen loophole that has a negative impact on users and the system as a whole.