CP solves. The courts will make progress towards increasing trademark infringement liability on e-commerce platforms following their US v. Frison ruling for brick-and-mortar shops – it’s easy, empirics prove.

Although the courts have not yet applied aiding and abetting statutes to the e-commerce world, they have not been afraid to apply the standard to brick and mortar institutions.172 In 2016, the 8th Circuit affirmed a district court decision holding that brick and mortar marketplaces, such as the flea market in the case, could be held accountable for the aiding and abetting of trafficking in counterfeit goods.173

In United States v. Frison, Jack Frison, the owner of Frison Flea Market, challenged a conviction of aiding and abetting the trafficking of counterfeit goods.174 Frison’s market operated three days a week under his supervision, and Frison’s income came from vendor rental fees, and admission charges to customers.175 The rental fees allowed vendors certain privileges, such as the ability to leave their inventory in the brick and mortar marketplace while it was closed.176 Among the other goods that were sold at the flea market, many of the vendors sold counterfeit clothing, footwear, purses, and accessories.177 Naturally, the sale of counterfeit goods at the Frison Flea Market did not go unnoticed.178 Frison and his market received warnings from police officers that he needed to prevent the sale of counterfeit goods because he was responsible for everything in his flea market, notices from the Record Industry Association of America warning off the sale of bootleg music, cease and desist notices from Coach, Inc. and Coach Services regarding the sale of counterfeit goods, complaints from the Better Business Bureau, and was the subject of warrants and seizures by the Department of Homeland Security, Immigration and Customs, and other federal officers.179 However, these punitive measures did little to deter the sale of counterfeit goods in the Frison Flea Market.180 In fact, the only major change was the Frison’s implementation of a $500 fine to vendors who were caught selling counterfeit goods.181

Despite the evidence gathered against him, Frison argued on appeal that the statute as applied to him, aiding and abetting in the trafficking of counterfeit goods, was unconstitutionally vague, and therefore void.182 Specifically, he claimed that he “did not have fair notice that his behavior was criminal; [and] it was unclear what he should have done to avoid liability.”183 Frison’s main argument with regards to the notice, was that he did not have notice that a “passive landlord who [was] merely renting his property could be held responsible for the actions of his tenants.” However, the court found that Frison was far from a passive landlord.184 In fact, he was extremely active in his market, inducing fines on vendors, establishing his dominance and his position “in charge,” among other things.185 However, even if he had been a less active landlord the court believed that a person of ordinary intelligence would have realized that aiding and abetting individuals that were committing willful infringement or trafficking of counterfeit goods should have known that they would be held liable for the same illegal conduct.186 If this was not enough, the court noted that Frison received multiple warnings and notices that his conduct as the owner and operator of the flea market was unlawful.187

Although Frison attempted to assert that he thought he did all he could do to comply with the law, posting signs telling vendors not to sell counterfeit goods and fining vendors that did, the court found this “lip service” to the law unconvincing.188 The court looked instead to the facts that Frison did not evict violators from the premises, and the fact that Frison actually benefited from fining the vendors.189 By failing to evict infringers and continuously fining them for their misbehavior, Frison indicated that he both knew the fake merchandise existed, and failed to shut it down, instead choosing to profit monetarily from their illegal activity.190

Looking at these facts, the court determined that Frison, and his brick-and-mortar flea market, was correctly convicted for aiding and abetting for the actions of the vendors in his market despite the arguments to the contrary.191

3. Applying Brick and Mortar Laws to E-Commerce Platforms

The similarities between Frison and the arguments of e-commerce platforms is plain, in a similar way that secondary trademark liability for a flea market owner can be analogized to an ecommerce platform. Using the crime triangle as discussed above, Frison stated that he was not responsible for the actions of the vendors that made use of his marketplace192 but was found to be complicit in aiding and abetting. A similarity is found with e-commerce platforms claiming no responsibility for criminal activity on their sites. Additionally, e-commerce platforms, similar to Frison, take some sort of monetary benefit from the sales of counterfeit goods on their platforms, even if done unwittingly.193

It is easy to assert that not all of the factors that the court applied in Frison are relevant in the e-commerce space. First and foremost, e-commerce spaces typically attempt to comply with the law in order to avoid later, and more grand liability.194 Additionally, e-commerce platforms will often shut down the accounts of individuals found to be selling counterfeit goods.195 However, these differences may not transcend the overall concept purported by Frison: that marketplace owners should be held accountable for the illegal activity that occurs on its premises, especially when they have an active role in the maintenance of the marketplace and sufficient control over the vendors.196 Just as the Frison court looked at an abundance of statutes collectively and in light of the conduct that occurred at the Frison flea market, so too should we look at an abundance of statutes in light of the conduct occurring online in the ecommerce space.197

The application of the crime triangle here is relevant. Specifically with regard to the three behaviors that we suggest above as e-commerce platforms can engage with sellers and consumers in ways that ensure they have an active role in the maintenance of the marketplace and sufficient control over vendors. If they fail to 1) take active steps to protect consumers on their sites, 2) engage in place management strategies that are designed to make their sites less conducive to counterfeit trade, and 3) remain aware and ahead of the ever-changing curve set by trademark counterfeiters198 then these factors could potentially influence whether or not they are aiding and abetting.