Vicarious Liability of ISPs for Trademark Infringement

I am taking IPL and ICT this sem. One of the questions I encountered is: Is there really vicarious liability of Internet Service Providers (ISPs) for trademark infringement?

Sec. 30 par. (b.).iii of the E-Commerce Act is the relevant provision. This provision has 3 parts. The third part of which refers to vicarious liability arising from receiving financial benefit from the infringing activity or unlawful act of another person or party. Here, as long as there is some form of financial benefit, the ISP may already be liable.

As regards the vicarious liability of ISPs for trademark infringement, the decisions of the federal courts in the United States establish that 2 tests or standards have so far been developed. First, is the application of agency principles to parties involved in trademark infringement. Second, is the application of the joint tortfeasor liability doctrine. The most recent cases which illustrate these doctrines are the cases of Fare Deals v. World Choice Travel.com, Inc and Perfect 10 v. Visa International Service Association. None of these cases use the test of receiving financial benefit from the infringing activity or unlawful act as legal basis to determine vicarious liability.

Sec. 30 of the E-Commerce Act, I think, was based on American jurisprudential rules. If my assumption is correct, it seems, therefore, that vicarious liability, which comes from direct financial benefit, pertains only to copyright infringement and not to trademark infringement. This does not require knowledge, as long as the defendant ISP benefits financially (RTC V Netcom). However, the law is expressly clear, providing a basis for vicarious liability for ISPs. Since law does not make any distinction – covering both trademark or copyright infringement – neither should we. This is consistent with our rules on statutory construction.

As it stands, it seems to imply that the third part of Sec. 30 par. (b.).iii may also be applicable to trademark infringement. But then again, if we look at the rationale in American jurisprudence from which the law has been lifted, it is prudent and more reasonable not to apply this part of the third paragraph to trademark infringement cases.

Well, a test case has yet to settle this issue.

Reody Anthony M. Balisi
14th Entry