When Selling on the Internet, You Sell EVERYWHERE: Lessons from LOUIS VUITTON MALLETIER V. MOSSERI

Earlier this month on December 2, 2013, the United States Court of Appeals for the 11th Circuit entered a judgment against Joseph Mosseri, granting Louis Vuitton’s request for (1) a default judgment and a permanent injunction; (2) orders requiring the domain names of the websites “lazata.com” and “pendoza.com” be made inoperable; (3) $324,000.00 in statutory damages under 15 U.S.C. § 1117(c); (4) $9,135.00 in attorney’s fees under 15 U.S.C. § 1117(a)–(b); (5) $2,567.50 in investigative fees under 15 U.S.C. § 1117(a); (6) $504.10 in costs; and (6) prejudgment interest. You can read the whole case here.

The Facts

Joseph Mosseri operated (past-tense, now) a business that was selling on the Internet counterfeit Louis Vuitton goods. Mosseri lives and operates in New York, but he has never actively done business in the state of Florida. However, Louis Vuitton filed suit against Mosseri for trademark infringement in Florida. Regardless of whether or not Mosseri intended to do business in Florida, by selling counterfeit items over the Internet, and shipping goods into the state of Florida, the 11th Circuit Court of Appeals determined that Mosseri had availed himself of the laws of Florida. Because Mosseri chose to operate over the Internet, his physical presence in New York is immaterial to him being found bound by the laws of the state of Florida.

The Take-Away

If your business operates on the Internet, it is potentially bound by the laws of every single state your customers reside in. Say, for instance, you sell baked goods in Idaho via a website that you set up for $900. If your company’s name violates the registered trademark of a company that does business out of a single location in New Mexico, you are just as liable as a company that had opened up down the street in Albuquerque. You will have to defend yourself there, too.

Practical Advice

The Internet is a game changer. Now, more than ever, performing your due diligence before going into business is not optional. While the Mosseri case involves intentional trademark infringement and counterfeiting, the  same rules apply to negligent trademark infringement. Therefore, if your business unknowingly violates another’s registered trademark online, not only are you potentially infringing the trademark, but you may have to defend yourself in another state. That $900 website could cost you thousands of dollars in legal fees to an attorney that you’ve never met in a state you’ve never visited.

Bottom Line

Do your homework. Perform a trademark search and know the playing field before setting up shop. Just because a competitor with a similar name is 1,000 miles away doesn’t mean they are irrelevant.