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Civil Remedies
. . . . However, this failure is not the same as declining to exercise a right and ability to make thirdparty
websites stop their direct infringement.” 94
Financial Benefit. As noted above, courts generally have held that a site’s expansion of its user
base through increased infringing content constitutes a “financial benefit” directly attributable to
the infringement. In Napster, the Ninth Circuit held that the plaintiffs likely would succeed in
establishing that Napster had a direct financial interest in infringing activity given the “[a]mple
evidence support[ing] the district court’s finding that Napster’s future revenue is directly dependent
upon ‘increases in user base.’ More users register with the Napster system as the ‘quality and
quantity of available music increases.’” 95 More generally, courts have held that a “[f]inancial
benefit exists where the availability of infringing material ‘acts as a ‘draw’ for customers,’” and that
it need not be a “substantial” draw. 96
In the context of intermediaries, however, which have substantial non-infringing uses, some courts
have rejected general allegations that intermediaries derive a financial benefit from infringement.
For example, courts have held with respect to search engines that a plaintiff must establish that the
financial benefit at issue is directly related to the infringement. In one case, for example, the court
rejected the plaintiff’s allegation that Google’s “advertising revenue is directly related to the
number of Google users and that the number of users ‘is dependent directly on Google’s facilitation
of and participation in the alleged infringement.’ . . . This vague and conclusory statement does not
allege any actual relationship between infringing activity and the number of users and thus does
not allege obvious and direct financial interest sufficient to maintain this claim of vicarious
infringement.” 97
C. Potential Liability of Predatory Foreign Websites and Intermediaries—Trademark
1. Potential Liability of Predatory Foreign Websites—Trademark
Predatory Foreign Websites that sell counterfeit products and/or which use confusingly similar
domain names as a plaintiff’s mark may be found directly liable for trademark infringement.
Section 32 of The Lanham Act, 15 U.S.C. §1114, provides liability for trademark infringement if,
without the consent of the registrant, a defendant uses “in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark: which is likely to cause confusion, or to cause
mistake, or to deceive.” Courts routinely find that the selling of counterfeit products on a website
that are the same or nearly identical to a trademark owner’s genuine product violates Section
1114. 98 Similarly, trademark owners may have a claim for false designation of origin under 15
U.S.C. §1125(a)—i.e., whether the public is likely to be deceived or confused by the similarity of
the marks at issue. 99 Further, if the Predatory Foreign Website is using a domain name which is
identical or confusingly similar to, or dilutive of, the plaintiff’s mark, the plaintiff may have a
claim under the Anti-Cybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §1125(d). 100
Given that Predatory Foreign Websites selling counterfeit goods engage in commercial transactions
with consumers, courts routinely find that they have purposefully availed themselves of the forum
state and are subject to personal jurisdiction. 101 That said, the operators of such sites typically do
not subject themselves to the court’s jurisdiction, resulting in a default judgment against them. In
such situations, so long as the site’s domain name is “located” in the United States (i.e., is issued by
a U.S.-based registrar or registry), the ACPA allows the owner of a mark to file an in rem civil action
against a domain name if the domain name violates the owner’s trademark rights, and if the owner
of the mark satisfies certain procedural provisions. 102 In an in rem action, the remedies are limited to
forfeiture, cancellation, or transfer of the infringing domain name to the owner of the mark. 103
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