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It’s a scary time to be a web designer or a search engine optimization (SEO) service provider in South Carolina. Not since Stephen Colbert declared himself Governor, have South Carolinians been so riddled with fear.
Yesterday, the United States District Court for the District of South Carolina ordered defendant Bright Builders, Inc. to pay $770,750.00 in damages for contributory trademark infringement as the result of a jury verdict against it for constructing and providing web hosting services to a company it knew to be infringing on third parties’ trademarks.
This very same group of jurors determined that defendant Christopher Prince and Prince Distribution, LLC (Prince) should pay $28,250.00 in damages for their direct and willful trademark infringement on third parties’ trademarks.
So, in South Carolina, it’s less bad to do something bad than it is to help someone do something bad. Perhaps logic didn’t play into the jury deliberations. Perhaps the jurors were frightened because Prince Distribution’s headquarters is located on Tigershark Ave, so they got the damage awards backwards. Whatever the jurors’ motivation, this judgment sets a new precedent for contributory infringement.
So what happened? What could lead twelve citizens of South Carolina to award 28X more damages against the indirect infringer than the direct infringer? Who knows!?! The Verdict Form explains the jury’s calculations, but not its reasoning (the calculations don’t seem to make sense either).
What we do know is that Bright Builders assisted with the construction and hosting of a website for Prince. If you’re a service provider and you think one of your clients is a counterfeiter, you best investigate your hunch. If your suspicions are confirmed, you should consider ceasing to provide services to the infringer, lest you risk (sufficient) liability for what amounts to “aiding and abetting” counterfeiting.