B. The Elements of Contributory Liability under Inwood: 3. The Requirement of Actual or Constructive Knowledge: (a) In General — Part 1
Under the Inwood standard, the plaintiff must prove that the defendant continued to supply a product “to one whom it knows or has reason to know is engaging in trademark infringement.” Inwood, 456 U.S. at 854. The extent of a defendant’s knowledge of the wrongful activities of the direct infringer is the focus of courts deciding contributory trademark infringement cases. See David Berg and Co. v. Gatto Int’l Trading Co., Inc., 884 F.2d 306, 311 (7th Cir. 1989)(“[t]he determination of contributory infringement depends upon a defendant’s intent and its knowledge of the wrongful activities of its distributors,” citing Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1382 (9th Cir. 1984)). See also Sony Computer Entertainment America, Inc. v. Gamemasters, 87 F.Supp. 2d 976 (N.D.Cal. 1999)(“gravamen of a contributory infringement action is the defendant’s knowledge”); Power Test Petroleum Distributors, Inc. v. Manhattan & Queens Fuel Corp., 556 F.Supp. 392, 394 (E.D.N.Y. 1982)(“a determination of liability for contributory infringement turns on the factual issue of knowledge”). And see Louis Vuitton Malletier, S.A. v. Akanoc Solutions, 591 F.Supp.2d 1098, 1111 (N.D.Cal. 2008)(sustaining contributory liability claim where defendant ISPs internal emails showed the company knew about infringing websites using its services, creating a genuine issue of material fact regarding its actual or constructive knowledge).
Two main factors have influenced the courts’ determination of knowledge in this area: one is the extent to which the defendant was involved with the underlying direct infringement; the second is the likelihood and strength of the direct infringement claim. See Lockheed Martin Corp. v. Network Solutions, Inc. 985 F.Supp.949, 964-965 (C.D. Cal. 1997)(“Contributory infringement doctrine has always treated uncertainty of infringement as relevant to the question of an alleged contributory infringer’s knowledge[]”), aff’d, 194 F.3d 980 (9th Cir. 1999), and cases cited therein. See also Tiffany v. eBay, 576 F.Supp.2d 463, 508 (S.D.N.Y. 2008)(noting that “courts have been reluctant to extend contributory trademark liability to defendants where there is some uncertainty as to the extent or the nature of the infringement”), affirmed in part and remanded in part, 600 F.3d 93 (2d Cir. 2010); RGS Labs Int’l, Inc.v. The Sherwin-Williams Co., 2010 WL 317778, *3 (S.D.Fla.)(“a contributory infringement claim requires, at a minimum, both an allegation of a direct infringement by a third party and an allegation of an intentional or knowing contribution to that infringement by the defendant”), citing Optimum Techs. Inc, v. Henkel Consumer Adhesives, Inc. 496 F.3d 1231.1245 (11th Cir. 2007). The requirement to demonstrate direct trademark infringement is discussed in further detail, in Section II.B.5.
Thus, where the record was “grossly lacking” in evidence of either actual or constructive knowledge on the part of the defendants, the court, for purposes of granting a preliminary injunction, could not find a likelihood of prevailing on a contributory infringement claim as a matter of law. Sony Computer Entertainment America, Inc. v. Gamemasters, 87 F.Supp. 2d 976 (N.D.Cal. 1999). Moreover, the questionable nature of the underlying direct infringement claim in this case significantly undermined the plaintiff’s argument for contributory liability based on knowledge. See id. at 986.
Sony Computer arose out of the sale of allegedly counterfeit video game accessories by a retail store, “GameMasters” and its owners. Sony Computer Entertainment America Inc. (“Sony”), the manufacturer of the PlayStation video game for which the accessories were designed, sued GameMasters, alleging both direct and indirect trademark and copyright infringement, including trademark counterfeiting. Sony sought a preliminary injunction in connection with both the direct and indirect liability claims. Id. at 977.
Among the accessories sold by the defendants in Sony Computer was the video “Game Enhancer.” As described by the court, the Game Enhancer was an external device that served at least two functions. One was to simply modify an existing video game according to the user’s wishes, e.g., to make it more or less challenging. The second function of the Game Enhancer was to permit players to play games sold in Japan or Europe and intended by Sony for use exclusively in those territories, i.e. “grey market” games. See Sony Computer, supra at 981.
Sony contended that the Game Enhancer also allowed users to play counterfeit copies of original PlayStation software. See id. at 982. By selling the Game Enhancer, Sony argued, the defendants contributed to others’ trademark and copyright infringement. Id. The defendants simply rejected the assertion that the Game Enhancer could be used to play counterfeit games. Id. The court noted that there was nothing in the instructions accompanying the Game Enhancer to support such a use. Id. Nor had Sony brought any evidence to suggest that the particular Game Enhancers sold by the defendant enabled users to play counterfeit games. See id.
The court denied the preliminary injunction, both because of the weakness of the direct infringement claim and the lack of evidence suggesting that the defendants had any knowledge or constructive knowledge of it. Sony Computer, supra at 986-987. Citing Inwood, the court stated that Sony was required to prove that GameMasters supplied a product to third parties with actual or constructive knowledge that its product was being used to infringe. Id. at 986. The court noted, however, that the “scant evidence and allegations” by Sony only suggest that the defendant supplied a product that “consumers could have used to engage in trademark infringement.” Id. Moreover, the court held, “[a] consumer’s choice to play the non-territorial game [by way of the Game Enhancer] cannot be the infringing activity,” because those games were authentic, Sony authorized games. Id., (citation omitted). Finally, the court noted that the record was “grossly lacking” in evidence of actual or constructive knowledge of infringement on the part of the defendants. Id. at 987. See also, David Berg and Co. v. Gatto Int’l Trading Co., Inc., 884 F.2d 306, 311 (7th Cir. 1989)(affirming district court’s rejection of contributory infringement claim where plaintiff had presented no evidence that defendant had knowledge or any reason to know of any infringing sales); Cf. Power Test Petroleum Distributors, Inc. v. Manhattan & Queens Fuel Corp., 556 F.Supp. 392 (E.D.N.Y. 1982) (denying defendant’s motion to dismiss where factual question remained as to defendant’s awareness of potential infringement by subsequent parties in the chain of distribution).
By contrast, where the underlying infringement was patently obvious both from the design of the products and accompanying misleading advertising, the court readily found knowledge and intent. See Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1381-1382 (9th Cir. 1984). Sealy was a trademark dispute that arose out of the sale of sets of Sealy mattresses together with non-Sealy foundations by Danco, a bedding products company. The plaintiff, Sealy Incorporated, (“Sealy”) was an association of bedding manufacturers which owned and licensed the SEALY trademark. Sealy, supra at 1380. Also involved in the dispute was Ohio-Sealy, a bedding manufacturer and Sealy licensee. Ohio-Sealy owned a subsidiary, Pacifica, which was not a Sealy licensee.
Danco acquired its genuine Sealy mattresses from an Ohio-Sealy subsidiary, and sold them together with non-Sealy foundations made by Pacifica. The unlabeled Pacifica foundations were covered in fabric or “ticking” that was identical to the Sealy mattress ticking. The mattress and foundation combination thus gave the impression of being a matched Sealy set. Sealy supra at 1381. Furthermore, at Danco’s suggestion, the items were advertised by some retailers as a “Sealy Back-Saver and matching foundation.” Sealy supra at 1381. Sealy brought a trademark infringement action in district court against both Danco and Pacifica, seeking, inter alia, an injunction against the sale of the Sealy-Pacifica bed sets. Id. The court granted the injunction and the defendants appealed.
The Ninth Circuit affirmed, finding substantial evidence to support the district court’s findings that the defendants “foresaw and intended that the Pacifica foundations would be passed off as Sealy products.” Sealy, supra at 1382. It pointed specifically to the matching ticking on the Pacifica foundations and to the advertisements offering the product as a “matching foundation,” for the Sealy mattress. Id. It found further that remedial measures taken by the defendants during the course of litigation did not overcome the misleading impression conveyed by the identical ticking on the Pacifica foundation. Id. The effect of such measures is discussed in further detail infra.
Similarly, where the defendant “candidly admit[ted]” that it specifically designed its paper towel product for use in the plaintiff’s branded dispenser, the court found that the plaintiff had pleaded facts alleging contributory trademark infringement sufficient to survive a motion to dismiss on summary judgment. Georgia Pacific Consumer Products, LP, v. Von Drehle Corp., 2010 WL 3155646, *7 -*8. (4th Cir.). In Georgia Pacific, the court determined that a reasonable jury could find that the defendant both induced infringement and continued to supply its product to distributors knowing that infringement was taking place, thereby satisfying Inwood under either of its two tests. Id. at *7.
The plaintiff in that case, Georgia Pacific, (“G-P”), was the manufacturer of paper products and dispensers for both the home and institutional use. It invented the first electronic, hands-free dispenser, the “enMotion,” a paper towel dispenser that enabled the customer to dry his hands with paper towel without having to touch the dispenser. Georgia Pacific, supra at *2. G-P also designed a related product, the enMotion paper toweling, a special, high-quality, non-standard-sized paper towel for use in its enMotion dispensers. Id. at *1.
To ensure that the enMotion dispenser would be used exclusively with the enMotion paper towels, G-P restricted the terms by which it sold the toweling and leased the dispensers. It sold the enMotion paper toweling to janitorial supply distributors, who in turn sold it to their respective end-user customers. Id. at *1. It only leased its dispensers, however, to those distributors, who in turn, were permitted to sublease them to their respective end-user customers. Id. at *1. Both the leases and subleases provided that only the enMotion toweling was to be used in the enMotion dispensers, the inside of which bore stickers reiterating that requirement and the face of which bore Georgia-Pacific’s registered trademarks. Id.
Notwithstanding these efforts, one of G-P’s competitors, the Von Drehle Corporation, (“VD”), began marketing and selling to distributors a cheaper paper toweling specifically manufactured and designed by VD for use in the enMotion dispensers. Georgia Pacific, supra at *1. G-P thereafter sent VD a cease and desist letter, “informing it that its conduct constituted trademark infringement and tortious interference” with contract. Id. at *4. VD responded, rejecting G-P’s claims and insisting that “its conduct regarding its … [paper toweling was] legitimate competition.” Id.
G-P consequently sued VD, alleging inter alia unfair competition under the Lanham Act and state common law, tortious interference with contract, and contributory trademark infringement. Georgia Pacific, supra at *1. VD counterclaimed for violation of the state Unfair and Deceptive Trade Practices Act. Id. The district court granted summary judgment in favor of VD with respect to all of G-P’s claims and summary judgment in favor of G-P with respect to VD’s counterclaim, and both parties appealed. Id.
On de novo review, the Fourth Circuit found entirely in G-P’s favor, vacating and remanding the district court’s grant of summary judgment dismissing G-P’s claims, and affirming its grant of summary judgment in favor of G-P with respect to VD’s counterclaim. Georgia Pacific, supra at *1. Noting that all of G-P’s claims turned on whether G-P adduced evidence sufficient for a reasonable jury to find VD liable for contributory trademark infringement, the court began its inquiry there, applying the Inwood standard. Id. at *6.
The court noted at the outset that it would assume for the purposes of deciding the contributory liability claim that the “stuffing of [the enMotion] dispensers with VD’s [toweling] by end-user customers constitute[d] trademark infringement under the Lanham Act,” and indeed further on did find sufficient evidence in the record to sustain a claim of direct infringement by the end-user customers. Id. at *7, *13. It then readily found the record sufficient to demonstrate to a reasonable jury that “VD directly induced such infringement and continued to supply its product to distributors knowing such infringement was taking place.” Id. at *7.
Specifically, the court noted that “VD candidly admit[ted] that it developed its … toweling for the specific purpose of end-users stuffing enMotion dispensers, which dispensers were the only ones on the market at the time to accept” the non-standard-ized toweling. Georgia Pacific, supra at *7 -*8. It found further that VD’s sales staff directly marketed its toweling as a cheaper alternative to G-P’s, making “in-person sales calls on distributors and end-user customers.” Id. at *8. Finally it noted that “leaving no doubt as to VD’s intentions,” VD’s president had testified, well after receiving the cease and desist letter from G-P, that it intended for “every roll” of its toweling to be used in G-P’s dispensers. Id. These findings on the record were sufficient to satisfy the test for contributory trademark infringement under both prongs Inwood. See Id. at *7 -*8. For a discussion of the significance of defendants’ responses to cease and desist letters in the context of willful blindness, see Section II. B. 3 (c).
In another case, the court found the probability of direct infringement to be so obvious that it remanded the case back to the trial court to examine evidence of the defendant’s knowledge of it, notwithstanding his earlier denials. See Polymer Technology Corp. v. Mimran, 975 F.2d 58, 64 (2d Cir. 1992). In Mimran, the plaintiff, Polymer Technology Corp. (“Polymer”), manufactured and sold contact lens solutions under the registered BOSTON trademark. It distributed its various lens care solutions in two main lines of trade: one line was sent to distributors for resale to eye care professionals, while the other line was distributed in the retail market. Mimran, supra at 60. There were several basic differences between the retail line solutions, sold at a profit, and the professional line products, sold at a loss with an intention to boost retail sails. See id. The court noted, inter alia, that the retail solutions were packaged individually, and that the outer packaging contained various warnings, lists of ingredients and notices. Such labeling and packaging, the court further noted, was regulated by the Food and Drug Administration. Id. The various professional solutions were not so regulated because they were not intended for retail sale. Thus, some of the professional products contained labels such as “Not for Sale,” or “For Sale by an Eye Care Professional Only.” Id. at 60-61. Furthermore, the outer packaging of those products did not contain lists of ingredients and the products themselves did not necessarily contain tamper-evident seals. Id.
The defendant, Mimran, owned a number of businesses that distributed contact lens care products. Mimran, supra at 60. Polymer alleged that Mimran had obtained its professional products and resold them in the retail market, a claim that Mimran did not deny. Mimran, supra at 61. It further alleged that Mimran broke down the professional products, which were packaged in kits, and sold them individually at retail. Id. The defendant denied tampering with the packaging. Id. However, among the parties to whom Mimran had sold such products was another defendant, Worldwide Scents, Inc., who admitted to breaking products out of their original packaging and selling them at retail with counterfeit packaging. Id. n.7.
Polymer sought a preliminary injunction against the defendant in district court, alleging various trademark infringement and counterfeiting claims, including contributory trademark infringement arising out of Mimran’s sales to Worldwide Scents. The district court denied the motion, and Polymer appealed.
On appeal, the Second Circuit vacated and remanded the case for a further review of the evidence relating to Polymer’s claims, including the contributory liability claim. Citing the Inwood standard, the court noted that although the defendant had denied knowledge of Worldwide’s counterfeiting scheme, “it would not have taken a great leap of imagination for Mimran to realize that, given their labeling, the professional kits would have to be repackaged before they could be sold at retail.” Mimran, supra at 64. Noting that the district court did not discuss this evidence, the Second Circuit remanded for further review. Id. at 64, 65. Regarding claims of willful blindness, see discussion infra.
The inevitability of the ultimate trademark infringement has not always led the courts to a finding of knowledge, however. By contrast with Sealy and Mimran, supra, in two other cases, the sale of generic replacement parts for Rolex watches has been held not to constitute contributory infringement, notwithstanding the fact that those parts fit only Rolex watches and therefore arguably gave the seller reason to know of their eventual infringing use. See Rolex Watch, U.S.A., Inc. v. Michel Co., 179 F.3d 704 (9th Cir. 1999)(“Michel”) and Rolex Watch USA, Inc. v. Meece, 158 F.3d 816 (5th Cir. 1998)(“Meece”).
In Michel, supra, the defendant was a jeweler who reconditioned used Rolex watches with parts that were not provided or authorized by the plaintiff, Rolex Watch U.S.A, (“Rolex”) the United States distributor for Rolex watches. He sold the reconditioned watches to jewelry dealers and retail jewelers. The reconditioned watches retained their original ROLEX trademarks on their dials and bracelets, except where the defendant had replaced the bracelet, in some of which cases there appeared an imitation of Rolex’s Crown Device logo, which depicts a crown. Michel, supra at 706, 707. Additionally, the defendant specially reconditioned used Rolex watches for individual retail customers, by replacing their bezels, dials, and bracelets with parts that were not authorized or provided by Rolex. Finally, in addition to these activities, the defendant sold the generic replacement parts fitting the Rolex watches to retail jewelers and dealers as well. See id. at 706.
Rolex brought various trademark counterfeiting and infringement claims against the seller in district court, including a contributory trademark infringement claim arising out of the sale of the generic replacement parts. See Michel at 707, 712-713. Regarding the contributory liability claim, the district court found that none of the defendant’s sales of the non-Rolex replacement parts constituted contributory infringement. See id. at 708. Specifically, it found that the evidence was insufficient to show that the defendant had either intended to induce infringement by others or had knowledge of others’ infringing use of the non-Rolex replacement parts. Id. at 713.
On appeal to the Ninth Circuit, Rolex advanced several arguments to demonstrate that the lower court’s findings regarding the contributory liability claim were clearly erroneous. It contended that the defendant himself found it difficult to distinguish between genuine Rolex replacement parts and the non-Rolex parts he distributed. Rolex v. Michel, supra at 713. It argued further that the defendant had not provided any written disclosures on any of the generic replacement parts or documentation accompanying their sale. Finally, Rolex asserted that the defendant knew that the generic parts would be incorporated into the Rolex watches; in other words, he knew of the ultimate infringing activity. See id. at 713.
Notwithstanding these arguments, the Ninth Circuit upheld the findings of the district court, which it reviewed for clear error. Following Inwood, it noted that the district court explicitly found that there was insufficient evidence that the defendant “had either intended to induce infringement by others, or had knowledge of others’ infringing use of the replacement parts[.]” Michel, supra at 713. Among the evidence relied upon by the district court was the defendant’s testimony that it was his practice to disclose the source of his replacement parts to his customers. See id. It further relied on testimony from one of the defendant’s customers to the same effect. The Ninth Circuit noted further that there was no evidence that the defendant “continued to sell replacement parts to jewelers he knew or had reason to know were engaging in trademark infringement or counterfeiting.” Id.
A similar result was reached in Meece, 158 F.3d 816 (5th Cir. 1998). In that case the defendant sold both new and used Rolex watches to which he affixed non-genuine Rolex parts, such as diamond bezels, thereby enhancing them to imitate more expensive Rolex watches. See Meece, supra at 820. As in Michel, supra, the defendant also separately sold non-genuine Rolex parts designed solely to fit genuine Rolex watches to other jewelers. The parts were marked only “Made in Italy.” Meece, supra at 819, 820. In addition to the claims of trademark infringement and trademark counterfeiting regarding the altered watches, Rolex brought a claim for contributory trademark infringement regarding the sale of the non-genuine replacement parts. The district court rejected the claim, finding no evidence to support the finding that Meece was “inducing others to infringe or that he knows that he [was] selling replacement parts to people who are using the parts to make reconstructed infringing watches.” Id. at 828.
On appeal to the Fifth Circuit, Rolex argued, as it had done in Michel, supra, that Meece himself had trouble distinguishing non-genuine from genuine Rolex replacement parts. It further pointed out that he had admitted that his replacement parts were specifically made to fit Rolex watches and that he knew of no other watch that they fit. It therefore contended that Meece had reason to know that his non-genuine parts would end up in infringing watches. Id. at 828-829.
The Fifth Circuit, citing the Inwood standard, found the district court had not clearly erred in finding no contributory infringement. Meece, supra at 829. It noted that there was no evidence that Meece sold large quantities of parts to any single retailer, but rather sold a few parts at a time to numerous jewelers. Id. It noted further Meece’s testimony that there was no group of jewelers or any particular jeweler who purchased a large number of replacement parts. Id. Finally, the court observed although Meece had no control over what the jewelers did with the parts he supplied to them, there was no evidence that he continued to supply those parts knowing or having reason to know the jewelers were engaging in trademark infringement. Id.
Michel and Meece are noteworthy insofar as in both cases, the defendant was found to be a direct infringer, intimately involved with the infringing activity, and yet, the evidence apparently failed to support a finding that the defendant should have known of the ultimate infringing use for which the component parts were specifically designed. Perhaps the fact that the purchasers of the non-genuine parts themselves were not parties in either case is relevant, in that it is to their infringing activity the defendants are alleged to have contributed. The posture of the cases may have affected the trial courts’ treatment of the evidence (although in Michel one of the customers’ testimonies was noted).
Indeed, where a contributory defendant was an integral part of the direct infringer’s counterfeiting operations, the court readily found actual knowledge. See A &M Records v. Abdallah, 948 F.Supp.1449 (C.D.Cal. 1996). A & M Records was a copyright and trademark counterfeiting case brought by a group of record companies against multiple defendants, including Mohammed Abdallah, the owner of General Audio Video Cassettes (“GAVC”), a company that sold blank audiotapes and duplicating equipment. The other defendants included customers of Abdallah who ran audiocassette counterfeiting businesses utilizing the tapes and equipment supplied to them by Abdallah and GAVC.
The defendant’s pivotal role in and undeniable knowledge of the counterfeiting process was demonstrated by overwhelming evidence, the court found, so much so that his handwriting was literally all over it. Specifically, in order to produce the counterfeit recording tapes, the other defendants needed special “time-loaded” tapes, i.e. blank cassettes whose time length was customized to accommodate the length of the sound recording the counterfeiters wished to duplicate. See A & M Records, supra at 1453-1454. The court found credible evidence that Abdallah had timed legitimate, i.e, authentic, tapes for his customers and then sent the tapes back with his handwritten notations to facilitate their ordering of the time-loaded tapes. See id. “This fact strongly indicate[d] that Mr. Abdallah knew what his counterfeiting customers were doing with the tapes that he sold them[,]” the court found.
The defendant’s role went “far beyond merely selling blank, time-loaded tapes,” the court observed further. A & M Records, supra at 1457. For example, “[h]e acted as a contact between his customers and suppliers of other material necessary for counterfeiting, such as counterfeit insert cards; he sold duplicating machines to help his customers start up a counterfeiting operation or expand an existing one … and he helped to finance some of his customers when they were starting out or needed assistance after a police raid.” Id. (discussing defendant’s role in context of the contributory copyright infringement). Citing the Inwood test for contributory trademark infringement, the court concluded that the defendant had continued to supply the blank time-loaded tapes to his customers notwithstanding his knowledge that they used the tapes to engage in trademark infringement. See id. (referring to its discussion of the analogous copyright claim).
Individual officers who run the day-to-day business of their companies have been held contributorily liable for the infringing actions of those companies. In these cases, the courts readily find the element of knowledge, simply by virtue of the defendants’ inherent familiarity with and participation in their company’s activities. See, e.g., Microsoft Corp. v. Black Cat Computer Wholesale, Inc., 269 F.Supp.2d 118 (W.D.N.Y. 2002); Microsoft Corp. v. Grey Computer, 910 F.Supp. 1077, 1090-1091 (D. Md. 1995). And see L & L Wings, Inc. v. Marco-Destin, Inc., 676 F.Supp.2d 179 (S.D.N.Y. 2009) (imposing contributory liability based on actual knowledge where direct and indirect infringers were corporations both closely held by the same owner; shared nearly identical corporate officers, directors and main office employees; and had received the same cease and desist letter), discussed infra in Section II. D.I.(a); Symantec Corp. v. CD Micro, Inc., 286.F.Supp.2d 1278, 1283 (D. Or. 2003)(chief executive officer of company that sold counterfeit software held liable for contributory trademark infringement where he personally decided on purchase of counterfeit disks; he was warned by both the plaintiff and users and shareholders that the software was counterfeit but did not stop selling it). Cf. McKay v. Mad Murphy’s, Inc. 899 F.Supp. 872, 876-877 (D. Conn. 1995)(rejecting contributory liability claim against individual defendant who filed a permit application on behalf of allegedly infringing restaurant corporation; defendant claimed she had no knowledge of trademark problem, she was neither an officer nor a shareholder and was not otherwise involved in the corporation’s business activities).
In Microsoft Corp. v. Grey Computer, supra, the court found that one of the defendant companies, Direct Wholesale, had distributed counterfeit copies of Microsoft software products to various other defendant companies, in violation of Microsoft’s copyrights and trademarks. See id. at 1083-1090. Upon discovery of Direct Wholesale’s counterfeit operations, Microsoft sued both the company for its direct infringement and its two sole shareholders for contributory infringement. Microsoft argued, and the court agreed, that the two officers were each personally involved in acquiring and distributing the infringing software products. See id. at 1090.
More fundamentally, the court found that the two individuals “knew about and participated in the infringing activities of Direct Wholesale because, for all intents and purposes, they were Direct Wholesale.” Microsoft Corp. v. Grey Computer, supra at 1090 (emphasis added). The court cited the general proposition that “[a] party who, with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another, will be held liable as a contributory infringer and is jointly and severally liable for the infringement.” See id., citing Polymer Technology Corp. v. Mimran, 975 F.2d at 64. Note that the court in Polymer Technology actually cited the Inwood contributory trademark infringement standard; the Microsoft court here incorporates the analogous copyright test. In any event, the court held that this general statement applied as well to trademark infringement and therefore held both individuals jointly and severally liable as contributory infringers. Furthermore, the court noted, even if the two officers had acted primarily for the benefit of Direct Wholesale, they could still be held personally liable. See id., (citation omitted). Compare Tiffany v. eBay, 576 F.Supp.2d 463, 501 (S.D.N.Y. 2008)(rejecting plaintiff’s joint and several liability claim because defendant never took possession of items sold on its website and did not directly sell counterfeit merchandise to buyers), affirmed in part and remanded in part, 600 F.3d 93 (2d Cir. 2010).
