A relatively unknown area of trademark law could potentially hold significant liability exposure for landlords.
In a recent case, Luxottica Grp., S.P.A. v. Airport Minim Mall, LLC, 932F.3d 1303, 2019 U.S.P.Q.2d 292644 (11th Cir. 2019), landlords were found to have contributorily infringed Oakley and Ray Ban trademarks on counterfeit sunglasses being sold by their tenants. The landlords had rented space to their tenants and took no action against the tenants after the tenants were raided for selling counterfeit goods. The landlords even renewed some leases where the tenants had been arrested for counterfeiting. The court found that the landlords should have used the common lease clause requiring tenants to “comply with all applicable laws” to have terminated the lease. By failing to do so, the landlords, because of their knowledge or at least constructive knowledge of, the counterfeiting contributed to the infringement and became liable themselves.
While this case is extreme, in that raids had occurred and the landlords were copied on communications with police, it highlights that landlords can be liable for the actions of their tenants where the tenants are selling false goods if the landlord knew or should have known of the infringing activities. It is critical that landlords not turn a blind eye to situations where they fear that their tenants may be selling goods that are counterfeit, or, even where the goods are legitimate but that where the tenant may not have a license to sell or market the goods or services.
If you, as a landlord, are contacted by the owner of trademark or copyright alleging that your tenant is operating without the proper right to sell or market their good or service you should take such an allegation seriously to determine whether you need to take action against your tenants to protect yourself from liability.
Scherer Smith & Kenny LLP remains available to guide you through these issues. For additional information, please contact Brandon Smith at bds@sfcounsel.com or Heather Sapp at hgs@sfcounsel.com.
– Written by Brandon Smith