In The Ohio State University v. Redbubble, Inc., another tech company was given carte blanche to misappropriate another’s proprietary content and reap profits from its exploitation. This latest chapter in the saga of “online exceptionalism,” in which tech companies’ disregard of intellectual property is tolerated if not condoned by the courts, is especially troubling.
Here comes Redbubble, which runs a “a global online marketplace platform hosted at Redbubble.com” that sells products by “independent artists.” This grandiose language obscures or at least misdirects from a major component of Redbubble’s business, which is selling copyright and trademark-infringing shirts and mugs and other ephemera. Our firm routinely receives calls from true “independent artists” whose works have somehow shown up on Redbubble.com’s products. But, Redbubble, like its online market cohorts, claims to have no responsibility for the goods it sells, and thus no liability.
The Ohio State University recently discovered as much. When OSU learned that Redbubble was selling merchandise bearing its marks, it brought suit for trademark infringement, right of publicity violations, and other claims. The case for infringement seemed clear. A visitor to Redbubble.com is offered Redbubble-branded products that Redbubble ships in Redbubble-branded packaging that bears the name, logo, and address of Redbubble. The infringing products themselves bore Redbubble tags. To just about any reasonable observer, these were Redbubble products. And the court acknowledged, as it had to, that some of these products at least appeared to infringe OSU’s trademarks. Surely, given the foregoing, Redbubble bears some liability for its sale of these infringing products.
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Not in the declining, but still active age of online exceptionalism. The court reviewed the state of the case law, highlighting the numerous cases in which Amazon had evaded liability for selling and shipping infringing product, and found Redbubble to be beyond reproach and the scope of trademark law. Summary judgment was entered against OSU on all of its claims.
The court reached its decision via a curious and circuitous route. It somehow concluded that Redbubble, a company that sells and ships merchandise printed with third-party art, is more like Amazon than a company like CafePress, which sells and ships merchandise printed with third-party art (and whose business has previously been found to be infringing). The court, in a way that is not entirely compelling, attempts to distinguish the prior CafePress case, as well as one involving a similar company, SunFrog, both of which found liability for infringement for acts very similar to Redbubble’s, by emphasizing the use by Redbubble of a subcontractor.
The court explains that, for Redbubble product, a “third-party manufacturer produces the product, and a third-party ships the finished item to the buyer.” The problem, though, is that these third-parties are entities with whom Redbubble has contracted to perform the services at issue. In other words, the court found that Redbubble is not liable for infringement because it hired other companies to manufacture and sell the infringing items.
So, companies that “themselves manufacture and ship infringing products to the customer” are liable for infringement while those that pay others to do so are immune. This reasoning would indicate that any online company that wanted to engage in wanton infringement could legally sell all of the knock-off product its heart desired so long as it pays third-parties to manufacture and ship the product. And it seems to establish that these third-parties, the ones who did nothing more than print and ship items at the direction of Redbubble, would be the ones left on the hook for infringement.
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Of course, rulings of this nature also only encourage online marketplaces to take a hands-off approach to policing infringement on their sites, as the court notes how the disputed material was solely the result of third-party submission.
The court in OSU actually goes so far as to expressly say that online is different, distinguishing a case relied on by OSU by noting that the “case dealt with a brick-and-mortar store.” For such stores, courts have found “no reason to restrict liability to those who actually create, manufacture or package the infringing items,” but for online stores, the result is the opposite, and for no real reason.
The outcome of the OSU case is particularly troubling because RedBubble has already twice been found liable for infringement in its home country of Australia, including in a case addressing its sales without permission of Hell’s Angels-branded items. This reflected poorly on Redbubble but the company’s comments in the wake of those infringement findings were just as bad. They apparently threatened to leave Australia for a country with more lax infringement laws, the safe harbor of America. If there was ever a time to reevaluate the application of our infringement laws, it should be after a company running a business found to be infringing looks to insulate itself from liability by hiding out in the States.
But the inquiry into Redbubble’s business model has not yet reached its conclusion. In another action pending in Northern California, video-game pioneer Atari Interactive is pursuing claims for copyright and trademark infringement. Apparently, the “independent artists” populating Redbubble’s “global online marketplace” saw fit to market and sell through Redbubble numerous shirts and other items bearing Atari’s marks as well as those of its iconic games, such as Pong, Centipede, and Asteroids. Redbubble will surely argue that it should be able to profit from the sale of these items while at the same time having no liability for the infringement that results from said sales. But, for the time being at least, the game remains on.
Scott Alan Burroughs, Esq. practices with Doniger / Burroughs, an art law firm based in Venice, California. He represents artists and content creators of all stripes and writes and speaks regularly on copyright issues. He can be reached at [email protected], and you can follow his law firm on Instagram: @veniceartlaw.