Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. et al

Filing 191

OBJECTIONS to re 188 Proposed Order DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION by Akanoc Solutions, Inc., Steven Chen, Managed Solutions Group, Inc.. (Lowe, James) (Filed on 8/7/2009)

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. et al

Doc. 191

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page1 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

GAUNTLETT & ASSOCIATES David A. Gauntlett (SBN 96399) James A. Lowe (SBN 214383) Brian S. Edwards (SBN 166258) Christopher Lai (SBN 249425) 18400 Von Karman, Suite 300 Irvine, California 92612 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Attorneys for Defendants Akanoc Solutions, Inc., Managed Solutions Group, Inc. and Steve Chen UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

LOUIS VUITTON MALLETIER, S.A., Plaintiff, vs. AKANOC SOLUTIONS, INC., et al., Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) )

Case No.: C 07-3952 JW (HRL) DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION Trial Date: August 18, 2009

165707.1-10562-002-8/7/2009

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Dockets.Justia.com

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page2 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
165707.1-10562-002-8/7/2009

TABLE OF CONTENTS Page I. OBJECTIONS TO PROPOSED PERMANENT INJUNCTION ...................................... 1 A. B. Vuitton's Proposed Injunction is Fundamentally Flawed....................................... 1 Inadequate Findings Section ...................................................................................... 2 1. 2. 3. C. The Proposed Findings Are Insufficient to Justify An Injunction [2:8-10].............................................................................................................. 2 Vuitton Cannot Satisfy the Legal Standard for Issuance of a Permanent Injunction For Future Infringements........................................ 3 Vuitton Cannot Satisfy eBay Four-Part Test................................................ 4

The Proposed Permanent Injunction Violates the Restrictions on Injunctive Relief Available Against ISPs In Section 512(j) of the DMCA (17 U.S.C. § 512) .......................................................................................................... 8 General Prohibitions [pg. 2:11-21] ............................................................................ 9 1. The Specific Language of the Injunction Fails to Comply With the Law ................................................................................................................... 9

D.

E.

Strict Compliance Obligations (pg. 2:22-4:2) ........................................................ 12 1. 2. Obtain and Publish Contact Information of Customers [p. 3:3-6]........... 13 Procedures When Receiving Complaints From Vuitton [p. 3:12-42]...................................................................................................................... 14 a. b. c. d. e. f. Acknowledge receipt of notice of infringement [p. 3:14]............... 14 "Assign a tracking number" [p. 3:15-16] ........................................ 14 "Notify ... customer of Complaint within 24 hours" [p. 3:17-20]............................................................................................... 14 Take Disabling Action if Website On Servers 72 hours After Vuitton Complains [p. 3:18-22]............................................. 15 Bar Further Access to the Domain Name if Website On Servers 72 hours After Vuitton Complaint [p. 3:18-24] ............... 16 "Accomplish a Permanent Stop" to Infringing Activity [p. 3:24-4:2].............................................................................................. 17

II.

CONCLUSION...................................................................................................................... 19

i

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page3 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCKETED FEDERAL CASES

TABLE OF AUTHORITIES Page(s)

Dyer v. Northwest Airlines Corporations, 334 F.Supp.2d 1196 (D.N.D. 2004) .............................................................................................. 17 eBay Inc., v. MercExchange, LLC, 547 U.S. 388, 126 S.Ct. 1837 (2006) ..................................................................................... 1, 3, 4 Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770 (9th Cir.1983).......................................................................................................... 16 Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S. 423, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974) ................................................................... 10 Hard Rock Cafe Licensing Corp. v. Concession Services, Inc. 955 F.2d 1143 (7th Cir. 1992).............................................................................................. 7, 12, 18 Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) ................................................................... 2 Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th Cir. 1999)..................................................................................................... 2, 16 Lockheed Martin v. Network Solutions 985 F.Supp. 949 (C.D. Cal. 1997)....................................................................................... 7, 12, 18 MDT Corp. v. New York Stock Exch., 858 F.Supp. 1028 (C.D.Cal.1994)....................................................................................... 7, 12, 18 MGM Studios, Inc. v. Grokster, Ltd., 518 F.Supp.2d 1197 (C.D. Cal. 2007)......................................................................................... 2, 4 Pacific R. Co. v. Mower, 219 F.3d 1069 (9th Cir. (Or.) 2000)................................................................................................ 9 Price v. City of Stockton, 390 F.3d 1105 (9th Cir.2004)............................................................................................ 10, 15, 16 Schmidt v. Lessard, 414 U.S. 473, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974) ..................................................................... 10 Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) ........................................................................................................................ 4

Microsoft Corp. v. Evans, 2007 WL 3034661 (E.D. Cal. Oct. 17, 2007) ............................................................................... 10
165707.1-10562-002-8/7/2009

ii

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page4 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Tiffany, Inc. v. Ebay, Inc. 2008 WL 2755787 (S.D.N.Y. July 14, 2008) ..................................................................... 7, 12, 18 FEDERAL RULES AND STATUTES 17 U.S.C. § 512 ..................................................................................................................................... 8 17 U.S.C. § 512(c)(2) ...................................................................................................................... 8, 13 17 U.S.C. § 512(j) ......................................................................................................................... 2, 8, 9 17 U.S.C. § 512(j)(1)(A) ....................................................................................................................... 9 18 U.S.C. § 2510(12) ...................................................................................................................... 6, 17 18 U.S.C. § 2511(2)(a)(i) ...................................................................................................................... 6 18 U.S.C. § 2701(a)............................................................................................................................... 6 18 U.S.C. § 2701(b) .............................................................................................................................. 6 18 U.S.C. § 2702(a)(1) .................................................................................................................... 6, 17 Fed. R. Civ. P. 65 ................................................................................................................................ 10 Fed. R. Civ. P. 65(d).............................................................................................................. 1, 3, 15, 16 Fed. R. Civ. P. 65(e).............................................................................................................................. 1

OTHER AUTHORITIES Nimmer on Copyright, § 12.04[A][3][a] ............................................................................................... 2

165707.1-10562-002-8/7/2009

iii

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page5 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Pursuant to the Court's Final Pretrial Conference Order dated July 15, 2009 [Document No. 189] Defendants Managed Solutions Group, Inc., Akanoc Solutions, Inc. and Steve Chen hereby object to the language of plaintiff Louis Vuitton Malletier's ("Vuitton") proposed permanent injunction: I. OBJECTIONS TO PROPOSED PERMANENT INJUNCTION A. Vuitton's Proposed Injunction is Fundamentally Flawed

Vuitton's proposed injunction reveals a fundamental misunderstanding of the technology, the law and the nature of the business at issue in this case. The proposed injunction, even if Vuitton can prove at trial any past contributory infringement by any defendant, contravenes applicable statute and case law on direct and contributory infringement of copyrights and trademarks as well as the law restricting issuance of any prohibitory injunction. Vuitton's injunction language is vague and indefinite as to what conduct would be prohibited so as to deny defendants clear direction and the Court any ability to determine a violation. The injunction language improperly imposes on defendants vast duties of future Internet policing of Vuitton's many marks and works. It seeks to make defendants liable for unknown (and unknowable) acts of alleged infringement by unknown and unidentified third-parties. Vuitton falsely assumes that the defendants have the technical or practical means to accomplish the permanent "barring" of whatever third-party conduct Vuitton complains about in the future, displaying an unconcern with Internet or ISP technical operations. These problems are in addition to Vuitton ignoring the legal limits on an ISP's duty to take action on infringement complaints to say nothing about the criminal prohibition on ISP monitoring of Internet communication and server content. The bottom line is that the proposed injunction cannot be complied with and, if it were entered, guarantees that the defendants will immediately be accused of violating it if they do not simply go out of business. Vuitton's proposed injunction does not comply with the requirements of F.R.Civ.P. 65(d) and (e) and does not meet the requirements of eBay Inc., v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.Ct. 1837 (2006). There is no suggestion of irreparable harm necessary to justify any injunction.
165707.1-10562-002-8/7/2009

Vuitton perhaps ignores these legal requirements because its real objective is to put defendants out DEFENDANTS' OBJECTIONS TO 1 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page6 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

of business. It is entirely improper to seek a permanent injunction concerning future conduct at currently unknown websites not parties to this suit, appears to assume that any appearance by certain domain names on defendants' servers is an infringement without the need for Vuitton to prove any direct or contributory infringement. It would also make Vuitton the sole arbiter of what is "infringing."1 The injunction terms also ignores the limitations on injunctive relief against ISPs in Section 512(j) of the Digital Millennium Copyright Act ("DMCA") and would require the defendants to engage in conduct that Congress has made criminal under the Stored Communications Act. The proposed injunction is impossible, impractical and illegal and should be denied entirely. B. Inadequate Findings Section 1. The Proposed Findings Are Insufficient to Justify An Injunction [2:8-10]

Vuitton's proposed injunction is based on an incorrect premise. Paragraph 4 of the Findings states the injunction is issuing because of "the continued provision of Internet hosting and routing services to direct infringers [after notice]." [pg. 2:8-10] But, even if this were proven, such a finding cannot support liability for direct or contributory infringement, and cannot justify the sweeping injunction proposed by Vuitton.2 Entitlement to an injunction requires that Vuitton prove, in addition to establishing all
1

Even if Vuitton proves at trial that infringement occurred at a particular website, a permanent injunction even as to that website is barred unless Vuitton can prove the direct infringement will continue on defendants' servers at that website in the future: "Irreparable harm cannot be established solely on the fact of past infringement. Additionally, it must also be true that the mere likelihood of future infringement by a defendant does not by itself allow for an inference of irreparable harm. ... [T]he onus is on Plaintiffs to explain why future infringements would cause irreparable harm. It cannot be presumed." MGM Studios, Inc. v. Grokster, Ltd., 518 F.Supp.2d 1197, 1214-15 (C.D. Cal. 2007). 2 For contributory copyright liability to attach, in addition to proving direct infringement the defendants must act in concert with a direct infringer: "In order to deemed a contributory [copyright] infringer, the authorization or assistance must bear some direct relationship to the infringing acts, and the person rendering such assistance or giving such authorization must be acting in concert with the infringer." Nimmer on Copyright, § 12.04[A][3][a]. For contributory trademark liability to attach, in addition to proving direct infringement the defendants must either intentionally induce a third party to infringe or directly control and monitor the instrumentality (the website) used by the direct infringer to infringe. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 853-54, 102 S.Ct. 2182, 2188, 72 L.Ed.2d 606 (1982); Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 983, 985 (9th Cir. 1999)
165707.1-10562-002-8/7/2009

2

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page7 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

elements of direct and contributory liability, that it will suffer irreparable injury if the injunction does not issue. eBay Inc., v. MercExchange, LLC, 547 U.S. 388, 391, 126 S.Ct. 1837 (2006) But Vuitton cannot possibly prove irreparable injury as to future infringements allegedly occurring at websites it does not identify, based upon past infringements at different websites. Just because Vuitton sends a complaint about a website does not establish that direct infringement (and irreparable injury) has occurred. [p. 3:12-4:2] Direct infringement (and irreparable injury) by unknown parties in the future cannot be presumed simply because a website uses a defendant's server. [p. 2:14-21] Vuitton's injunction language would make Vuitton the sole arbiter of future infringement apparently based on the assumption that Vuitton can determine future direct infringement (perhaps because of seeing a domain name on a third-party report listing an IP address being used by that domain) without establishing the identity of a direct infringer, establishing the elements of direct infringement, and without establishing any significant relationship between an alleged direct infringer and one of the defendants. For example, Vuitton seems to assume that if a named domain in the past sold infringing goods, that it must always in the future be presumed be selling infringing goods. This disregards possible changes in merchandise or even site ownership. Vuitton's basis for a permanent injunction boils down to this: Defendants must be contributorily liable if they provide ISP services to certain unnamed websites after a notice from Vuitton. [p. 2:8-10] Based on this assertion, (1) any website about which Vuitton provides a future notice is automatically infringing and (2) defendants are automatically contributorily liable for hosting the website without further evidence. [p. 2:8-10] This sounds fanciful, but no other possible bases exist for finding defendants in contempt. Vuitton's proposed language does not meet the requirements of F.R.Civ.P. 65(d) because it does not "state the reasons why [the injunction] is issued," does not state its terms specifically," and does not "describe in reasonable detail--and not by referring to the complaint or other document-- the act or acts restrained or required." 2. Vuitton Cannot Satisfy the Legal Standard for Issuance of a Permanent Injunction For Future Infringements.

165707.1-10562-002-8/7/2009

Vuitton must satisfy a four-part test to be entitled to a permanent injunction in this case even DEFENDANTS' OBJECTIONS TO 3 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page8 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

if liability is proven at trial. In eBay Inc., v. MercExchange, LLC, 547 U.S. 388, 126 S.Ct. 1837 (2006), the Supreme Court unanimously held that a mere finding of infringement (there, of a patent) does not automatically entitle the owner of an intellectual property right to receive an injunction. Rather, like any other plaintiff, the owner of an infringed property right must satisfy a four-part test to invoke a federal court's equitable powers. Vuitton must prove (1) irreparable injury (2) the remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) an injunction is warranted because the balance of hardships favors Vuitton; and (4) the public interest would not be disserved by a permanent injunction. Id. at 391 Grokster, Ltd., 518 F.Supp.2d 1197, confirmed that this standard applies in copyright cases. The Ninth Circuit has applied the eBay factors to Lanham Act claims. Reno Air Racing Ass'n., Inc. v. McCord. 452 F.3d 1126, 1137-38 (9th Cir. 2006). The Grokster court quoted the Supreme Court's admonishment in Weinberger v. RomeroBarcelo, 456 U.S. 305, 312 (1982) that "[a]n injunction should issue only where the intervention of a court of equity is essential in order effectually to protect property rights against injuries otherwise irremediable. . .." and continued: As recently confirmed by the Supreme Court [in eBay], Plaintiffs must meet their burden with respect to the traditional four-part test. ... Further, the Supreme Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed. Grokster, 518 F.Supp.2d at 1208 (internal quotes and citations omitted). 3. Vuitton Cannot Satisfy eBay Four-Part Test

Irreparable Harm: The Grokster court confirmed that post-eBay "there can be no presumption of irreparable harm in the permanent injunction context" even if a plaintiff is successful on the merits. Id. at 1211 Moreover, "[i]rreparable harm cannot be established solely on the fact of past infringement. Additionally, it must also be true that the mere likelihood of future infringement by a defendant does not by itself allow for an inference of irreparable harm. ... [T]he onus is on Plaintiffs to explain why future infringements would cause irreparable harm. It cannot be presumed." Id. at 1214-1215
165707.1-10562-002-8/7/2009

4

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page9 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
3

At trial Vuitton will be unable to prove irreparable harm caused by websites listed in its first amended complaint. Among other considerations, Vuitton has admitted that it cannot identify any lost sales from the past infringement alleged in this case. Despite its complaints about alleged "counterfeiters" in this case, Louis Vuitton sales have been increasing dramatically in the period of this lawsuit. Attached as exhibits to the supporting Declaration of James Lowe are excerpts from the public financial reports of LVMH, Louis Vuitton's parent company. These reports show Louis Vuitton quarter by quarter "double-digit organic revenue growth," "strong momentum continued" and "excellent performance in Europe, U.S. and Asia, especially China. For example, in the latest quarterly report (Quarter 1, 2009) LVMH reports "good momentum in fashion and leather goods" in Asia, in the U.S. and in Europe. "Louis Vuitton: Double digit revenue growth. All regions

showing positive revenue growth in Euros. Continued strong momentum in Europe and Asia." This reported positive revenue growth is occurring during the worst world wide recession in memory.3 Since Vuitton cannot establish any actual damages it seeks in this case only statutory damages. Since Vuitton cannot show any damages over the past several years, it is speculative and unreasonable for Vuitton to assert that it will be irreparably injured by future "counterfeiters." It is just as likely that Vuitton is actually benefitting from counterfeiters' advertising. But even if Vuitton could show harm at all, that does not prove irreparable injury as to purported future infringements. Unless Vuitton can prove that it will be irreparably harmed by actual infringements occurring in the future at particular websites (and it cannot), its proposed injunction should be denied out of hand. Vuitton's trial proofs will also fail regarding the remaining factors: Monetary Damages Inadequate to Compensate for Injury: Vuitton has made no effort to demonstrate that only equity can provide "compensation" for a harm beyond money damages. Where, as here, there is no injury, discussion of compensation makes no sense. Vuitton cannot establish that an injunction must issue to increase its revenue growth beyond "double digits." Balance of Hardships: Vuitton's proposed injunction attempts to abdicate Vuitton's duty to police its marks and copyrighted works and force the defendants to do so for them. In doing so,

Unsurprisingly Vuitton has recently filed a motion in limine to exclude these financial reports. 5
DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

165707.1-10562-002-8/7/2009

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page10 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Vuitton ignores the fact that there is no lawful or practical way for Defendants to monitor information transmitted through or stored on the servers they rent to resellers. With 40,000 IP addresses accessing 1,500 Internet servers constantly, there is no practical means to wiretap communication or monitor content in such a way that can prevent or identify every appearance of a copyrighted work or a trademark appearing on the servers. Such monitoring would not only be unlawful but would be a criminal offense. MSG and Akanoc are prohibited by U.S. law from monitoring or viewing customer activity except for maintenance purposes or upon issuance of a search warrant. Section 2511(2)(a)(i) of the Stored Communications Act, 18 U.S.C. § 2511(2)(a)(i) ("[A] provider of wire communication service to the public shall not utilize service observing or random monitoring except for mechanical or service quality control checks."(emphasis added)) Additionally, section 2702(a)(1) of the SCA, 18 U.S.C. § 2702(a)(1), then prohibits Defendants from disclosing the contents of communications in electronic storage to Vuitton or anyone else: A person or entity providing an electronic communication4 service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service. (emphasis added) The monitoring Vuitton demands in its injunction is a criminal act. Sections 2701(a) and (b) of the SCA , 18 U.S.C. § 2701(a) and (b), create the criminal offense of accessing communications in electronic storage: (a) Offense. Except as provided in subsection (c) of this section whoever-- (1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system shall be punished as provided in subsection (b) of this section. *** (b) Punishment. The punishment for an offense under subsection (a) of An " `electronic communication' [is defined as:] any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce..." 18 U.S.C. § 2510(12).
165707.1-10562-002-8/7/2009 4

6

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page11 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

this section is(2) in any other case-- (A) a fine under this title or imprisonment for not more than 1 year or both, in the case of a first offense under this paragraph. Vuitton has no right to demand and this Court cannot order the defendants to perform criminal acts, regardless of any alleged benefits to Vuitton for doing so. The defendants simply are prohibited from doing the monitoring or "service observing" that would be necessary to prevent an infringer from communicating or storing allegedly infringing works or marks on its Internet servers. This is why Vuitton can show no precedent for the suit it brings or the relief it demands. This plaintiff is not entitled to drive the defendants out of business or to seek enormous damages because the defendants will not commit crimes to protect the sales of its luxury goods. It is not the responsibility of any ISP to police its servers for infringing material. Every court that has considered the issue has held that it is the responsibility of a copyright or trademark owner to identify infringement and then send notices to an ISP. Lockheed Martin v. Network Solutions 985 F.Supp. 949 (C.D. Cal. 1997) (a domain registrar has "no affirmative duty to police the Internet in search of potentially infringing uses of domain names."); Tiffany, Inc. v. Ebay, Inc., 2008 WL 2755787, at *47 (S.D.N.Y. July 14, 2008) ("[W]hile the Court is sympathetic to Tiffany's frustrations in this regard, the fact remains that rights holders bear the principal responsibility to police their trademarks."); see MDT Corp. v. New York Stock Exch., 858 F.Supp. 1028, 1034 (C.D.Cal.1994) ("The owner of a trade name must do its own police work."); Hard Rock Cafe Licensing Corp. v. Concession Services, Inc. 955 F.2d 1143, 1149 (7th Cir. 1992) (defendants are not required "to be more dutiful guardians of [trademark plaintiffs'] commercial interests). The proposed permanent injunction shifts the burden of policing Vuitton's marks onto defendants. It requires that defendants monitor their servers for specific domains in violation of federal law in order to "bar further access to the domain name on any server owned by Defendant(s) or any of them." [3:22-23] As other courts have recognized, it is obviously far less burdensome on Vuitton, like every other rights holder, to police its own intellectual property on the Internet and give DMCA-complaint notice of infringement.
165707.1-10562-002-8/7/2009

Public Interest: The public interest does not favor Vuitton. There is no possibility MSG and DEFENDANTS' OBJECTIONS TO 7 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page12 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Akanoc could ever comply with Vuitton's proposed permanent injunction. Because the inevitable result of failing to comply is a contempt sanction, Vuitton's real purpose appears to be shutting down lawful ISP businesses. Vuitton likely wants to put these defendants out of business in order to use them as object lessons when threatening other ISPs. Provision of ISP services is not only legitimate, it is necessary to the modern economy. Shutting down an ISP that provides such services to the public hardly favors the public interest. C. The Proposed Permanent Injunction Violates the Restrictions on Injunctive Relief Available Against ISPs In Section 512(j) of the DMCA (17 U.S.C. § 512)

Vuitton's proposed injunction violates the restrictions on injunctions in Section 512(j) of the Digital Millennium Copyright Act ("DMCA"). Section 512(j) limits the form and scope of

injunctive relief against Internet Service Providers, like the defendants, who qualify for safe harbor under the Act.5 With respect to conduct other than that which qualifies for the limitation on remedies set forth in subsection (a), the court may grant injunctive relief with respect to a service provider only in one or more of the following forms: (i) An order restraining the service provider from providing access to infringing material or activity residing at a particular online site on the provider's system or network. (ii) An order restraining the service provider from providing access to a subscriber or account holder of the service provider's system or network who is engaging in infringing activity and is identified in the order, by terminating the accounts of the subscriber or account holder that are specified in the order. On November 26, 2007 MSG's and Akanoc's Interim Designations of Agent to Receive Notification of Claimed Infringement, were received by the U.S. Copyright Office. MSG and Akanoc became eligible to receive the protections afforded by the DMCA. See 17 U.S.C. § 512(c)(2): Designated agent. ­ The limitations on liability established in this subsection apply to a service provider only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information: (A) the name, address, phone number, and electronic mail address of the agent. (B) other contact information which the Register of Copyrights may deem appropriate. The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats, and may require payment of a fee by service providers to cover the costs of maintaining the directory.
165707.1-10562-002-8/7/2009 5

8

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page13 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(iii) Such other injunctive relief as the court may consider necessary to prevent or restrain infringement of copyrighted material specified in the order of the court at a particular online location, if such relief is the least burdensome to the service provider among the forms of relief comparably effective for that purpose. 17 U.S.C. § 512(j)(1)(A). Section 512(j) explains that injunctive relief against an ISP is limited to prohibiting access to a particular website. This standard implicitly acknowledges the realities of the on-line world and the fact that Internet hosts cannot "accomplish a permanent stop to complained-of infringing activity" [p. 4:1-2] or "insure that [infringement] is not resumed on servers or using facilities owned by [the ISP]. [p. 3:10-11] Section 512(j) also recognizes that rights-holders such as Vuitton must police their own works on the Internet. ISPs cannot be, and are not, expected to do the policing job for rights holders, including even Louis Vuitton. D. General Prohibitions [pg. 2:11-21] 1. The Specific Language of the Injunction Fails to Comply With the Law

Paragraph 4(a) of the proposed injunction [pg. 2:11-21] is a "catch-all" provision that appears to cover any real or imaginary infringing activity, even if Vuitton does not give notice. It burdens MSG and Akanoc with the impossible task of locating potentially infringing content, and determining if that content is "unauthorized." Paragraph 4(a) does not require Vuitton even to give notice of an infringing site or make a complaint as required under the DMCA or otherwise. This is a "gotcha" provision with the apparent intent to capture all possible activity in order to be able to impose additional conditions under paragraph (b) so that the defendants cannot avoid being "found in violation of paragraph (a) of this Injunction." [pg. 2:22-23] "Federal Rule of Civil Procedure 65(d) requires that an injunction "state its terms specifically" and "describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained."6 An injunction must provide a fair and precisely Pacific R. Co. v. Mower, 219 F.3d 1069, 1072-73 (9th Cir. (Or.) 2000) "Federal Rule of Civil Procedure 65 requires that an injunction "be specific in terms" and "describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained." Fed.R.Civ.P. 65(d). ... The injunction issued against Mower does not even come close to satisfying Rule 65's specificity requirements; it provides little, if any, guidance to Mower regarding how he should determine what particular information is confidential or privileged.") Id. at 1077 165707.1-10562-002-8/7/2009 DEFENDANTS' OBJECTIONS TO 9 LANGUAGE OF VUITTON'S PROPOSED
6

PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page14 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

drawn notice of what the injunction actually prohibits as required by Fed.R.Civ.P. 65.7 The Ninth Circuit has further held that "an injunction must be narrowly tailored ... to remedy only the specific harms shown by the plaintiffs, rather than `to enjoin all possible breaches of the law.'" Price v. City of Stockton, 390 F.3d 1105, 1117 (9th Cir.2004); Microsoft Corp. v. Evans, 2007 WL 3034661 (E.D. Cal. Oct. 17, 2007) (same), citing Iconix, Inc. v. Tokuda, 457 F.Supp.2d 969, 998-999 (N.D.Cal.2006) ("Plaintiff has succeeded only in showing irreparable harm arising out of past acts of copyright infringement. The Court must therefore narrowly tailor its preliminary injunction to remedy that particular harm.") The General Prohibitions are improper cannot be included in even a justified injunction. The terms are not stated with sufficient specificity and the language far exceeds the scope of any infringement (even if Vuitton prevails at trial). Rather than tailor its injunction to remedy the specific harms at issue, Vuitton improperly seeks to enjoin all possible infringements by asking the Court to restrict defendants as to alleged future harms involving websites having no connection to this case. Vuitton asks the Court to restrict MSG and Akanoc, as to: ˇ "knowingly infringing, either directly or contributorily, in any manner, including generally," The meaning of this phrase is unclear and open-ended. It does not qualify as a "fair and precisely drawn notice of what the injunction actually prohibits." Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S. 423, 444, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974) ˇ "any unauthorized product," The scope far exceeds the requirement that an

injunction "remedy only the specific harms shown by the plaintiff." Vuitton has not shown irreparable injury at any unnamed website that may or may not infringe the "Louis Vuitton Properties" sometime in the future. The language is also neither fair
7

Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, 415 U.S. 423, 444, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974) (stating that the party enjoined should "receive fair and precisely drawn notice of what the injunction actually prohibits"); . Schmidt v. Lessard, 414 U.S. 473, 476, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974) ("The specificity provisions of Rule 65(d) are "no mere technical requirements. The Rule was designed to prevent uncertainty and confusion on the part of those faced with injunctive orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood.").
165707.1-10562-002-8/7/2009

10

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page15 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ˇ ˇ

or precisely drawn.

The defendants cannot determine what is an "unauthorized

product." MSG or Akanoc are not experts on Vuitton's marks and copyrights and products. If this injunction issued the defendants would be unable to tell if a

particular product is "unauthorized." MSG and Akanoc would therefore have no idea if they were actually in violation of the injunction and would be entirely at the mercy of Vuitton. "which features any of the Louis Vuitton Properties, copies of the Louis Vuitton Properties, or confusingly similar reproductions of the Louis Vuitton Properties," again MSG and Akanoc have no expertise on the genuineness of Vuitton products for sale on the Internet, or what "copies" of "Louis Vuitton Properties" are, or what a "confusingly similar reproduction" of a Louis Vuitton Property might be. "Restrained and enjoined from ... hosting websites that are engaged in manufacture, import, advertisement, offer for sale, sale or distribution of Unauthorized Products," apparently including unnamed websites not involved in this case or found by the jury to be involved in infringement in this case. MSG and Akanoc are ISPs ­ they have no way of knowing if a particular website is infringing Vuitton's marks and copyrighted works. This is an attempted unconstitutional

expansion of the Copyright Act and Lanham Act to extraterritorial acts outside of the United States. Vuitton's overbroad language covers future infringement at any website (not just those involved in this case). The Eastern District of California recently rejected similar overreaching language in a proposed injunction, explaining that it was not sufficiently specific and exceeded the scope of the infringement: [T]he proposed injunction would cover infringement of any other works now or hereafter protected by any of Plaintiff's trademarks or copyrights. It would also cover the use of names, logos, or "other variations thereof," terminology which is not sufficiently specific. These aspects of the injunction would be unclear and also would exceed the scope of the infringement. Microsoft Corp. v. Evans, 2007 WL 3034661 (E.D. Cal. Oct. 17, 2007) 165707.1-10562-002-8/7/2009 DEFENDANTS' OBJECTIONS TO 11 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page16 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

E.

Strict Compliance Obligations (pg. 2:22-4:2)

Beginning at page 2:22, the proposed injunction requires defendants to "strictly comply" with obligations that no ISP can, or has ever been required to, comply with. First, the strict compliance obligations improperly apply to any website in the future that Vuitton gives notice of, even if that website actually contains no infringing content. [pg. 3:124:2] The proposed injunction eliminates the requirement that Vuitton prove direct infringement (and therefore suffer irreparable harm) as to alleged future infringements occurring at as yet unknown websites. Instead, under the proposed language Vuitton simply sends an email from which alone direct infringement and irreparable harm are presumed. As written MSG and Akanoc could be held in contempt for failing to permanently remove a website that does not presently exist and never sells any counterfeit products, simply because someone at Vuitton may have believed it did. Second, because the strict compliance obligations relate directly to potential future infringements at unknown websites not involved in this action, the same problems regarding the lack of specificity of the language of the injunction and the fact that the injunction exceeds the scope of the infringement (discussed above under the "General Prohibitions" section above) applies. Third, the proposed injunction would require defendants to undertake a probably impossible job of monitoring the Internet for any sign that certain websites had reappeared on their servers.8 But this is Vuitton's job.9 No ISP can operate their business saddled with these burdensome and
8

MSG and Akanoc must "bar further access to the domain name on any server owned by Defendant(s) or any of them." [pg. 3:22-23] Without any notice from Vuitton, they are required to "[t]ake such additional action ... if activity complained of resumes on any server owned by Defendants ... as may be required to accomplish a permanent stop to the complained of infringing activity." [pg. 3:24-4:2] 9 See Hard Rock Café Lic. Corp. v. Concession Svcs, Inc., 955 F.2d 1143, 1149 (7th Cir. 1992) (defendants are not required "to be more dutiful guardians of [trademark plaintiffs'] commercial interests); MDT Corp. v. New York Stock Exch., 858 F.Supp. 1028, 1034 (C.D.Cal.1994) ("The owner of a trade name must do its own police work."); Lockheed Martin v. Network Solutions 985 F.Supp. 949 (C.D. Cal. 1997) (a domain registrar has "no affirmative duty to police the internet in search of potentially infringing uses of domain names."); Tiffany, Inc. v. Ebay, Inc. 2008 WL 2755787 at *47 (S.D.N.Y. 2008). Whether Defendants are best situated, or it is cheaper for Defendants to police trademark infringement, it is not their legal responsibility to do so. Tiffany, Inc. at *47 ("[E]ven if it were true that eBay is best situated to staunch the tide of trademark infringement to which Tiffany and countless other rights owners are subjected, that is not the law.")
165707.1-10562-002-8/7/2009

12

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page17 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

impossible requirements. Vuitton's injunction language appears to be an effort to make every outrageous demand it can think of rather than any serious effort to prohibit real harm. For example, Vuitton demands the Court require MSG and Akanoc to: 1. Obtain and Publish Contact Information of Customers [p. 3:3-6]

Paragraph (b)(ii) [p. 3:3-6] requires MSG and Akanoc to "obtain and publish on their website(s) complete and accurate contact information (including but not limited to name, current and valid email and physical addresses, telephone and facsimile numbers) ... for their customers." This outrageous demand is calculated to put defendants out of business. First, the defendants have no way of obtaining this information, and cannot be responsible for its accuracy. The defendants only do business with Internet hosting resellers, not website operators. The information would not be useful because defendants' customers do not operate infringing websites. Resellers cannot practically or legally be required to provide such information. Second, this is fundamental trade secret information that is the source of all business and must be protected. Publishing this information would likely drive the defendants' customers away or else invite competitors to steal them. Third, it is clearly intended to allow Vuitton (and anyone else, including defendants'

competitors) to harass customers. Fourth, it goes far beyond the requirements of the DMCA. The DMCA requires only that ISPs designate an agent to receive notifications of claimed infringement and posts the name, address, phone number, and electronic mail address of the agent on its website and with the Copyright office.10 There is no basis in the law for requiring an ISP or any other business to post contact information for its customers on a website. Aside from the blatantly 17 U.S.C. § 512(c)(2): Designated agent.--The limitations on liability established in this subsection apply to a service provider only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information: (A) the name, address, phone number, and electronic mail address of the agent. (B) other contact information which the Register of Copyrights may deem appropriate. The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats, and may require payment of a fee by service providers to cover the costs of maintaining the directory.
165707.1-10562-002-8/7/2009 10

13

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page18 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

outrageous nature of this demand, it would violate the privacy rights of all customers. Fifth, no business can be required to publicly publish all contact information about its customers. 2. Procedures When Receiving Complaints From Vuitton [p. 3:12-4-2]

Paragraph (b)(iv) [p. 3:12-6] requires a substantial and unworkable set of procedures beyond what is done in the industry and is fundamentally unworkable. They include: a. Acknowledge receipt of notice of infringement [p. 3:14]

Paragraph (iv)(1) requires MSG and Akanoc to "promptly acknowledge" receipt of "notice of infringement." Requiring an ISP to acknowledge receipt is not required under the DMCA, is not typical in the industry, and is burdensome because of the many notices of various types (spam, counterfeiting, illegal content) that are received each day. To hold MSG or Akanoc in contempt if they fail to "promptly" acknowledge receipt is unreasonable. b. "Assign a tracking number" [p. 3:15-16]

Paragraph (iv)(2) requires MSG and Akanoc to "assign a tracking number" to be used on all correspondence. This requirement is not typical in the industry, is a burden on a small business and would entail substantial record keeping obligations without any real benefit. c. "Notify ... customer of Complaint within 24 hours" [p. 3:17-20]

Paragraph (iv)(3) requires MSG and Akanoc to "notify their customer(s) of the Complaint within twenty-four (24) hours of receipt." Ordinarily this is not a problem, but some days when there are other activities going on this could be difficult to meet. For example if there are major technical problems (such a denial of service attack, "ddos" when personnel and technical resources must be used elsewhere to help business operating), or when law enforcement requires defendants' help because of a warrant or subpoena (periodically defendants are contacted by FBI, CIA or Homeland Security for assistance), or when major spam attacks occur, or when customers are having technical difficulties. There are limited personnel to do all the work and it is impractical to give Vuitton complaints absolute priority, especially if failure to do so results in contempt of court. There is no requirement under any statute or case that take-down notices be sent out in a specific period of time. MSG and Akanoc get the complaint notices out as soon as possible, often in less than 24 hours. But to mandate this, under penalty of contempt, ignores the realities of the ISP 165707.1-10562-002-8/7/2009 DEFENDANTS' OBJECTIONS TO 14 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page19 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

business model and is inherently unreasonable. d. Take Disabling Action if Website On Servers 72 hours After Vuitton Complains [p. 3:18-22]

Paragraph (iv)(3) also requires that MSG and Akanoc "disable access to the infringing content" if "activity complained of is still accessible ... seventy-two (72) hours after customer notification." First, it is unclear what "infringing content" is being referenced. Fed.R.Civ.P. 65(d) requires that the terms of an injunction be stated with specificity. The proposed language also does not appear to be narrowly tailored to remedy only specific harms, but to enjoin all possible counterfeiting of its intellectual properties now or in the future. Price v. City of Stockton, 390 F.3d 1105, 1117 (9th Cir.2004) ("[A]n injunction must be narrowly tailored ... to remedy only the specific harms shown by the plaintiffs, rather than `to enjoin all possible breaches of the law.'") Second, placing a 72 hour time-limit on this process is unworkable in practice, as sometimes customers may not respond immediately. Disabling access to infringing content requires either disabling the IP address or unplugging an entire server. Either action would likely disrupt service to other legitimate Internet operations. In the defendants experience, a single IP address can be used by up to a hundred separate websites or other domains. Multiple IP addresses are usually directed to a single server (a minimum of ten are provided by defendants with each server rental) so a thousand or more Internet users could be taken out of service simply because a single domain is not immediately responsive to an unverified Vuitton complaint. There is no basis in the DMCA or the law for imposing this draconian requirement. Allegedly infringing websites are normally taken down by the customer within 72 hours, but on those occasions where that is not possible defendants should not punish a thousand or more innocent Internet users to meet an arbitrary deadline (and avoid a contempt citation). Third, the harsh consequences to innocent parties of taking down an entire server within 72 hours of notice in all cases is heightened by the fact that the injunction applies to any website Vuitton decides to complain about, even if the website does not contain infringing content. The only
165707.1-10562-002-8/7/2009

15

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page20 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

requirement is that Vuitton give notice, and everyone's guilt is presumed.11 No specific finding of actual infringement and irreparable harm need be made by Vuitton before defendants are required to unplug servers or disable IP addresses. e. Bar Further Access to the Domain Name if Website On Servers 72 hours After Vuitton Complaint [p. 3:18-24]

Paragraph (iv)(3) also requires that MSG and Akanoc "bar further access to the domain name on any server owned by Defendant(s)" if "activity complained of is still accessible ... seventy-two (72) hours after customer notification." First, it is unclear what "activity" is being "complained of." Fed.R.Civ.P. 65(d) requires that the terms of an injunction be stated with specificity. The proposed language is not narrowly tailored to remedy only specific harms, but improperly seeks to enjoin all possible infringement by anyone of all Vuitton's intellectual properties at any time in the future. Price v. City of Stockton, 390 F.3d 1105, 1117 (9th Cir.2004) ("[A]n injunction must be narrowly tailored ... to remedy only the specific harms shown by the plaintiffs, rather than `to enjoin all possible breaches of the law.'") Second, it would be impossible for defendants to comply with this requirement. Defendants cannot block, disable or control any of the domain names on their 1,500 servers. They further have no way of knowing in advance what domain name might be used on their servers or with any of their 40,000 IP addresses. See Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 782 n.7 (9th Cir.1983) ("Generally, impossibility is a complete defense to a charge of contempt.") Vuitton has no evidence that any ISP has the ability to block access by a domain. Vuitton would have to get a domain registrar (responsible to ICANN) to disable a domain name. The defendants are not domain registrars (unlike some industry giants like Yahoo!). Only a domain registrar can stop the use of a domain name. But Lockheed Martin v. Network Solutions, 194 F.3d at 985 teaches that an IP owner cannot hold a registrar liable for failing to control an abusive domain name (even if the registrar is in the U.S.). Third, after a domain name is taken down or disabled it can easily reappear on a different IP
11

This may be a French legal concept but it is not followed in America. 16
DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

165707.1-10562-002-8/7/2009

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page21 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

address assigned to another ISP or even one assigned to defendants. So barring further access to the domain name on their servers would require defendants to monitor communications and storage on their servers. But MSG and Akanoc are prohibited by federal law from monitoring or viewing customer activity except for maintenance purposes or upon issuance of a search warrant. The Stored Communications Act ("SCA") prohibits Defendants from disclosing the contents of communications in electronic storage: A person or entity providing an electronic communication12 service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service.13 (emphasis added) MSG and Akanoc are governed by the SCA because they are Internet Service Providers whose servers, routers and cables carry Internet traffic and provide access to the Internet including the ability to send, receive and store electronic communications. Dyer v. Northwest Airlines

Corporations, 334 F.Supp.2d 1196, 1199 (D.N.D. 2004) ("The . . .definition of `electronic communications service' clearly includes Internet service providers such as America Online, as well as telecommunications companies whose cables and phone lines carry internet traffic.") f. "Accomplish a Permanent Stop" to Infringing Activity [p. 3:244:2]

Paragraph (v) requires that MSG and Akanoc "take such additional action . . . to accomplish a permanent stop to the complained of infringing activity." This is an open ended and impossible task designed to guarantee failure by the defendants and permanently put them out of business. First, defendants cannot know in advance what reseller an infringer might use to access defendants' servers or what IP addresses will be used. Nor can they monitor content (legally or practically) to prevent some domain from using their facilities.
12

An " `electronic communication' [is defined as:] any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce..." 18 U.S.C. § 2510(12). 18 U.S.C. § 2702(a)(1) 17
DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW

13

165707.1-10562-002-8/7/2009

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page22 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Second, defendants have no way to "accomplish a permanent stop" to infringement. If this were remotely possible, there would be no infringing activity anywhere in the world. There would be no spam, phishing, child porn, or any other conduct that governments around the try to stop. There would be no "ddos" attacks, no bot nets, no hacking of computer systems, etc. But the Internet is complex and impossible to fully control. Third, MSG and Akanoc should not be held in contempt for failing to permanently stop infringement at another ISP's servers. The language of the proposed injunction assumes that a domain will only resurface on defendants' servers. This might happen but often a domain that is taken down will reappear at an IP address assigned to a different ISP. The original ISP cannot do anything. A notice must be sent to the subsequent ISP. The proposed injunction is improper because it would hold defendants in contempt even when a domain moves to another ISP's servers. Fourth, the language of the injunction attempts to transfer the burden of policing the Internet onto defendants' shoulders. The cases that have considered the issue have all concluded that the rights-holder must police its own intellectual property on the Internet. See Hard Rock Café Lic. Corp. v. Concession Svcs, Inc., 955 F.2d 1143, 1149 (7th Cir. 1992) (defendants are not required "to be more dutiful guardians of [trademark plaintiffs'] commercial interests); MDT Corp. v. New York Stock Exch., 858 F.Supp. 1028, 1034 (C.D.Cal.1994) ("The owner of a trade name must do its own police work."); Lockheed Martin v. Network Solutions 985 F.Supp. 949 (C.D. Cal. 1997) (a domain registrar has "no affirmative duty to police the internet in search of potentially infringing uses of domain names."); Tiffany, Inc. v. Ebay, Inc. 2008 WL 2755787 at *47 (S.D.N.Y. 2008). Fifth, even if the defendants could do what Vuitton demands or even if they go out of business, Vuitton cannot possibly suggest that this would stop any counterfeiter from continuing to operate on the Internet. Infringers do not need the defendants to continue doing all the business they desire. The Internet is vast, counterfeiters operate throughout the world, and many means exist to make, advertise, sell, and deliver counterfeit goods. Vuitton's high prices drive the demand for counterfeit goods and countless people are willing to meet that demand. Infringement will not stop or be affected for even a nanosecond without the defendants' Internet services. Vuitton is chasing a
165707.1-10562-002-8/7/2009

rainbow and destroying the defendants business will not accomplish anything useful. DEFENDANTS' OBJECTIONS TO 18 LANGUAGE OF VUITTON'S PROPOSED
PERMANENT INJUNCTION ­ C 07-3952 JW

Case5:07-cv-03952-JW Document191

Filed08/07/09 Page23 of 23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

II.

CONCLUSION The proposed injunction is entirely unjustified and the terms are impossible, impractical and

illegal, even if Vuitton establishes liability at trial.

Dated: August 7, 2009

GAUNTLETT & ASSOCIATES

By:

/s/James A. Lowe David A. Gauntlett James A. Lowe Brian S. Edwards Christopher Lai

Attorneys for Defendants Akanoc Solutions, Inc., Managed Solutions Group, Inc., and Steve Chen

165707.1-10562-002-8/7/2009

19

DEFENDANTS' OBJECTIONS TO LANGUAGE OF VUITTON'S PROPOSED PERMANENT INJUNCTION ­ C 07-3952 JW