By Thomas Long, J.D.
Retailer allegedly created knockoff goods and acted as more than a hands-off intermediary.
Australia-based online retailer Redbubble, Inc., could be directly liable for third-party sellers’ infringement of trademarks owned by the Ohio State University, the U.S. Court of Appeals in Cincinnati has held. Unlike online retailers or auction houses that typically had been found not to be liable for trademark-infringing goods sold through their platforms, Redbubble’s marketplace allegedly involved creating products and garments that would not have existed but for Redbubble’s business. The appellate court held that a district court applied an overly narrow reading of the Lanham Act in granting summary judgment to the retailer. The case was remanded for further development of the factual record as to Redbubble’s control over the manufacturing and delivery of the infringing goods. Redbubble also could be liable for violations of Ohio’s right-to-publicity statute by selling products bearing the image of the university’s former football coach, Urban Meyer. At minimum, the appellate court said, Redbubble could have "used" the coach’s persona for commercial purposes by advertising the products bearing his image (The Ohio State University v. Redbubble, Inc., February 24, 2021, Nalbandian, J.).
Redbubble’s online marketplace had a global reach, with around 600,000 artists using the site and over $100 million in sales flowing through the platform. The site featured apparel, wall art, and accessories bearing an image selected by the customer. Independent artists, not employed by Redbubble, uploaded images onto the site, through which customers could browse and select for placement on a product. Redbubble then contacted the artist and arranged the manufacturing and shipping of the ordered products. Redbubble did not design, manufacture, or handle products itself, but the finished and shipped products bore Redbubble’s logo, and Redbubble performed customer service in connection with the goods. Redbubble also engaged in marketing and advertised various goods as "Redbubble" products.
The Ohio State University (OSU) asserted that third-party artists had sold products infringing the universities’ trademarks through Redbubble, and that Redbubble was liable for these acts of infringement based on its role in managing the marketplace. Specifically, OSU alleged that many items available for purchase through the marketplace infringed registered trademarks, including BUCKEYES, OHIO STATE, OHIO STATE UNIVERSITY, and URBAN MEYER. OSU also accused Redbubble of trademark counterfeiting, unfair competition, and passing off under the Lanham Act, and violation of the statutory right of publicity under Ohio law (with respect to the "Urban Meyer"–marked products). The parties filed cross motions for summary judgment, and the district court held that OSU failed to show that Redbubble used the university’s marks in commerce by creating, manufacturing, selling, or advertising the infringing goods sold by third-parties. The district court also decided that OSU failed to meet the commercial purpose requirement of the Ohio right of publicity statute. OSU appealed.
Vicarious infringement. Before addressing the merits, the court determined that OSU could not put forth a "vicarious infringement" theory because it raised that theory for the first time on appeal. Neither its complaint nor its motion for summary judgment mentioned vicarious liability under the Lanham Act. OSU also had made affirmative statements that it had purposefully chosen not to argue vicarious infringement.
Direct infringement. According to OSU, the district court failed to take into account the Lanham Act’s broad application to parties that "use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services." OSU contended that Redbubble violated the Act when it "used" OSU’s trademarks by "marketing and selling trademark-infringing products" on the Redbubble platform.
The appellate court noted that the Sixth Circuit had previously held that there was "no reason" to restrict Lanham Act liability to those who actually create, manufacture, or package the infringing items. And the appellate court agreed with OSU that the district court applied Lanham Act liability too narrowly. OSU contended that Redbubble did not act as merely a "passive facilitator" and could not escape liability on that basis. OSU argued that the key distinction between Redbubble and a more passive retailer, such as Amazon, was that Redbubble directs others to make or display infringing Redbubble products with Redbubble tags and instructions for caring for Redbubble garments. The court found this reasoning persuasive.
"Here, although the record is sparse, it appears that products ordered on Redbubble’s website do not yet exist, come into being only when ordered through Redbubble, and are delivered in Redbubble packaging with Redbubble tags," the court said. "Under those facts, the district court erred in affirmatively placing Redbubble on the passive end of the liability spectrum."
Because the record below lacked sufficient development of facts bearing on the degree of control and involvement exercised by Redbubble over the manufacturing, quality control, and delivery of goods to consumers, the Sixth Circuit reversed the district court’s grant of summary judgment to Redbubble and remanded the case for further proceedings.
Publicity rights. OSU asserted that Redbubble violated Ohio Revised Code Section 2741, Ohio’s right-of-publicity statute, by facilitating the sale of products bearing the likeness of former football head coach Urban Meyer. Meyer had assigned the rights to his persona to the university; accordingly, OSU held a property interest in his name, image, and likeness. The issue was whether Redbubble had used Meyer’s persona for a "commercial purpose," as required by the statute. The district court had disposed of his claim by reasoning that OSU could not succeed on it after losing "under the more lenient federal definition" of using a trademark.
In the Sixth Circuit’s view, the right-of-publicity claim turned on how Redbubble’s business model differed from Amazon, eBay, and other passive virtual marketplace operators. The court reiterated that Redbubble was not a mere passive facilitator, and it noted that the text of Ohio’s right-of-publicity statute prohibited using a persona in connection with a product, advertising a product, or soliciting the purchase of a product. The statutory language extended liability beyond directly selling trademark-infringing products. Redbubble admitted that it marketed the products made by vendor artists and directed consumers to purchase them. Therefore, the appellate court also reversed and remanded the district court’s grant of summary judgment on the publicity rights claim.
This case is No. 19-3388.
Attorneys: Benjamin Michael Flowers, Office of the Attorney General, for The Ohio State University. Kenneth B. Wilson (Coastside Legal) for Redbubble Inc.
Companies: Ohio State University; Redbubble Inc.
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