When it comes to their tenant’s actions, landlords should pay attention to the products and services tenants sell. In particular, the 11th Circuit held that a landlord could be contributorily liable for trademark infringement of a tenant.

What is Contributory Liability Under the Lanham Act?

The Supreme Court has recognized a cause of action for contributory infringement of a trademark. Specifically, “if a manufacturer or distributor intentionally induces another to infringe 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, the manufacturer or distributor is contributorily responsible for any harm done as a result of the deceit.” See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854 (1982).

Elements for Contributory Trademark Infringement

Altogether, to be liable for contributory trademark infringement, there must be:

  1. A person or entity who commits direct trademark infringement; and
  2. The defendant either:
    • Intentionally induces the direct infringer,
    • Supplies a product to the direct infringer who it knowns is directly infringing, or
    • Supplies a product to the direct infringer who has reason to know is directly infringing.

So How Can A Landlord Be Liable for Contributory Trademark Infringement?

Overview

In the case before the 11th Circuit, Luxottica Group (Luxottica) sued Airport Mini Mall (Airport) for contributory trademark infringement. Luxottica is a manufacturer and seller of Ray-Band and Oakley branded eyewear. Airport was the landlord for several vendors who sold various products within their rented space. During Airport’s tenure as the landlord for one booth, it observed three law enforcement raids on its subtenant. These raids included the seizure of counterfeit goods and arrests of the subtenants. Law enforcement notified Airport of the raids, including the arrest of subtenants and confiscation of counterfeit goods.

Oakley is a Luxottica Brand

In fact, Luxottica even sent Airport letters informing them that their subtenants were selling counterfeit goods. However, at the advice of their attorney, Airport took “no action against the subtenants unless the subtenants were convinced of a crime.” Luxottica Group, S.p.A v. Airport Mini Mall, LLC, 932 F.3d 1303, 1309 (11th Cir. 2019).

Courts Ruling

During the trial, Luxottica presented evidence of Airports willful blindness to the actions of its subtenants. In particular, airports willful blindness occurred when it was presented with the illegal actions of its subtenants, but ultimately choose to ignore the infringing acts.

Hence, the 11th Circuit held that “a landlord may be contributorially [sic] liable for its (sub) tenants’ direct trademark infringement if the landlord intentionally induces the infringement or knows or has reason to know of the infringement while supplying a service (such as space, utilities, or maintenance) that facilitates it. Id. at 1303 (emphasis added).

What Does This Mean for Landlords?

All in all, if you are a landlord, you should pay reasonable attention to your tenants and subtenants’ actions. In any case, when provided with evidence or accusations of trademark infringement by a tenant, further investigation should be undertaken. Staying “willfully blind” to your tenants’ actions could open you up to contributory liability. If you suspect that your tenants are violating someone else’s intellectual property rights, it is best to consult with an experienced intellectual property attorney.