How current events impact business & real estate

Wednesday, March 03, 2021

A Commercial Landlord is Liable for its Tenant's Trademark Infringement - Be Warned

If you know that your tenant is engaging in illegal activity at your property, you better do something about it. That's the message from the Federal Appellate Courts in Omega SA v. 375 Canal, LLC

In the case, a jury awarded $1.1 MM against a landlord for contributory trademark infringement for its willful blindness in identifying potential trademark infringing vendors at its premises where a counterfeit Omega watch was sold. According to the Court, liability follows if the landlord "or its agents had reason to suspect that trademark infringing merchandise was being offered or sold but deliberately failed to investigate or looked the other way to avoid seeing such activity." 

To prevail, a plaintiff does NOT need to prove that the landlord "continued to lease space to a specific, identified vendor that it knew or should have known was selling counterfeit [] goods." Instead, the plaintiff only needs to prove that a landlord had "reason to suspect" it's tenant counterfeiting goods "but deliberately failed to investigate or looked the other way to avoid seeing such activity." That is not to say that a landlord has an affirmative duty to police trademarks on its premises, just that it can't ignore them either. 

Landlords - 

Do you have video surveillance at your property? 

Do you have security guards? 

Do you accept complaints about your tenants from their customers?

What do you do to protect yourself from criminal tenants leasing space from you? 

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