SEO Firm Fined Nearly $800,000 For Helping Client Sell Counterfeit Golf Clubs

Not sure how many are aware of this ruling, which came down in March but in case you haven’t heard about it and are in the business of building websites, offering SEO services and the like… you want to pay very close attention to this story.

The story was first reported on the Internet Retailer Magazine site with this very ominous sounding title: “Court holds SEO firm responsible for online sales of counterfeit golf clubs.”

An excerpt from the piece…

“A federal court has ruled that a firm that provided marketing and web hosting services was financially responsible for the sale of counterfeit golf clubs by a client e-retailer.

A federal judge in South Carolina entered a judgment against Bright Builders Inc. on counts of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com. Judge Margaret B. Seymour of the U.S. District Court for South Carolina ordered Bright Builders to pay $770,750 in statutory damages and Christopher Prince, owner of the web site, $28,250, according to lawyers for the plaintiff, Cleveland Golf Company Inc.”

Re-read that last line again… The judge fined the counterfeiters nearly $30,000 while fining the company responsible for the website nearly $800,000.

So, in other words, the judge held those responsible for creating the means/portal to purchase counterfeit golf clubs exponentially higher than she did for those making the fake clubs themselves.

Cause For Concern…

That should very much be cause for concern and raise many red flags for any and all web-development, SEO firms.

And speaking of red flags, perhaps some should have gone up around the offices of Bright Builders when the URL selected was CopycatClubs.com.

Hmmm….

Or if that didn’t cause some raised eyebrows, perhaps some of the Home Page text that was on the site itself should have…

“Along with our exceptional customer service, we are your one stop shop for the best copied golf equipment on the Internet.”

I have to read that line again…

“… best copied golf equipment on the Internet.”

Do you think maybe, just maybe, someone at Bright Builders would have read that line and been just a tad bit concerned over the whole counterfeit angle?

But common sense aside, this case does raise a very interesting issue re: culpability.

Think about it… if the developer/SEO firm is held responsible, why not also fine Bright Builders’ Internet Service Provider, any fulfillment vendors/processing vendors… and even the search engines themselves – Google, Yahoo, Bing, etc?

Where does the culpability end?

Words To the Wise…

Christopher Finnerty, a lawyer for Cleveland Golf, the plaintiff, had these words of advice for all web developer/SEO firms…

Golf

“The jury found that web hosts and SEO’s cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host.”

What are your thoughts on all of this?

Did the courts send the wrong message in any way by fining the SEO firm substantially more than the company actually producing the counterfeit clubs?

Should Bright Builders, despite the fact that red flags seemed to be all around, be held responsible for the actions of their client?