See No Evil, Hear No Evil, See No Evil Louis Vuitton Hits $3.6M Judgment Against Its Landlord for Contributory Trademark Infringement

Lee A. Collins

March 27, 2012

A jury sitting in the United States District Court for the Western District of Texas, in Louis Vuitton Malletier v. Eisenhauer Road Flea Market, Inc., Bruce L. Gore, and Patricia D. Walker, found a landlord liable for $3.6 million to the designer brand Louis Vuitton for allowing tenants to sell knock-offs of its Louis Vuitton products.

Previously, no Federal Court sitting in Texas had extended the doctrine of contributory trademark infringement to the landlord/tenant relationship.  The United States Supreme Court, in Inwood labs., Inc. v. Ives Lab., Inc., 456 U.S. 844, 854 (1982), defined contributory infringement when “a manufacturer or distributor intentionally induces another to infringe on a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement.”  Id.  In instructing the jury on the standard for contributory trademark infringement, Federal District Judge Harry Lee Hudspeth extended the doctrine to a landlord/tenant relationship for first time in Texas.

Over and above extending liability where it had not previously been extended, this case is a blow to landlords because the landlord in Louis Vuitton, Eisenhauer Road Flea Market, had no control over what products were delivered to the leased premises, what products the tenant stocked in inventory, and what products the tenant actual sold; save and except the power to evict the tenant.  While the landlord has filed various post-trial motions to set aside the jury verdict, a prudent landlord should vigilantly monitor their tenants activities and respond quickly if and when infringing activity is discovered.