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  1. #1
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    AkaNoc / Managed Solutions Group (managed.com) lose $32M lawsuit

    http://www.datacenterknowledge.com/a...ement-verdict/

    I wonder what impact this is going to have on the rest of the dedicated hosting market in terms of how abuse is handled. Furthermore I wonder how said companies are going to deal with a $32M judgement.

  2. #2
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    Scary stuff for all hosts. Wonder what that means for the DMCA and how this verdict will affect future similar lawsuits
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  3. #3
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    I don't know if I'd necessarily call it scary at this point. What does the ruling mean? Web hosts need to follow up on trademark infringement notices? Based on the description of the host, seems like a lower end one that is a haven for those kind of things, and it alleges they acted willfully (though I'd be curious to see the evidence) in contributing to it. A quality host doing due diligence would likely not have anything to worry about. But even then, I'd wait until it is appealed, as it more than likely will be.
    Ken Robertson | Linked Labs | linkedlabs.com

  4. #4
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    True but if it starts here, where does it end? This case gives precedence to go after hosts now. It just takes one to ruin it for everyone. I can't find the EXACT details of the case (ie the process they went through to file the complaint) so one can only assume the worst at the moment.
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  5. #5
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    This is definitely an interesting case, though the devil is in the details. Basically, what I'd be interested in knowing is what Akanoc knew/was told and then how they responded.

    To me, it sounds like they were contacted about the site/s, given significant details, given time to resolve the issue, and still refused to shutdown the site. That would be very similar to how the DMCA works, though the DMCA wouldn't have specifically applied in this case, from what I can tell.

    Actually, looking it over, they're stating trademark and copyright infringement, so did they follow the DMCA, or??
    Last edited by KarlZimmer; 09-01-2009 at 04:46 PM.
    Karl Zimmerman - Steadfast: Managed Dedicated Servers and Premium Colocation
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  6. #6
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    Actually, the jury found that the defendant did not prove that they were a service provider that acted in a manner to protect them under "safe harbor" of the DMCA. Page 11 (http://www.scribd.com/doc/19283259/L...c-Jury-Verdict)

    They have registered DMCA agents, so I'm not sure what action they would have taken to remove their "safe harbor." If they were never given a DMCA. I would find this ruling to be ridiculous, if they were, then Akanoc/Managed was negligent.
    Karl Zimmerman - Steadfast: Managed Dedicated Servers and Premium Colocation
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  7. #7
    Hmmm, I think that you may see alot less of the Bulletproof hosting being used. Standard hosting for most clients is just fine but for the select clients that need to use that type of service, well in many cases what they are doing or offering bring around the target that descend upon them.

  8. #8
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    I saw this and asked my lawyer about this today. They basically said that unless there was negligence on the part of the hoster, this was suprising.
    They also pointed one interesting thing out - there are no legitimate 3rd party sellers of Luis Vuitton handbags, so its pretty easy to figure out who's fake

    If you're in the hosting biz and you don't have a lawyer on retainer, you might want to consider getting one for stuff like this. A 32 Million Dollar Judgement is not something anyone here would want to get hit with...
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  9. #9
    Looks like they either ignored the warnings and never took it seriously. So are they really going to pay 32million to the luis vuitton?
    Interesting thing is if someone use DSL provider for illegal activities like spamming, hacking etc so who is responsible the ISP or the end user?

  10. #10
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    This one has a point:

    Thats amazing. Does that mean cell carriers are legallly responsible with what users do with their mobile phones? I mean. Its EXACTLY the same thing. Millons of persons use cell phones to do ilegal things. Is Verizon or ATT&T liable? Of course not. That would be crazy. Its like saying Google is responsible for showing ilegal pirated software on their top ten results. Verizon is responsible for people downloading pirated content. Just like webhosts are NOT responsible for clients content. If they know there is something wrong, they shut it down. But on the end is the client who is legally liable.
    Oh man...
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    .
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  11. #11
    Join Date
    Feb 2004
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    Quote Originally Posted by KarlZimmer View Post
    Actually, the jury found that the defendant did not prove that they were a service provider that acted in a manner to protect them under "safe harbor" of the DMCA. Page 11 (http://www.scribd.com/doc/19283259/L...c-Jury-Verdict)

    They have registered DMCA agents, so I'm not sure what action they would have taken to remove their "safe harbor." If they were never given a DMCA. I would find this ruling to be ridiculous, if they were, then Akanoc/Managed was negligent.
    I read this yesterday as well, and while the DMCA safe harbor provision was deemed not to apply in the case of the copyright violation(s)--probably because the defendants didn't respond appropriately to properly formatted DMCA requests--the vast majority of the judgment awarded was for trademark infringement ($31.5M vs $900K for the copyright violation). The DMCA specifically doesn't deal with trademarks, service marks, trade dress, etc.

    As you said, it's in the details. It seems as if the DCK article says that the plaintiffs allege either the individual defendant and/or the companies involved used to advertise so-called "bullet proof" hosting in various message boards, and that may have been a key part of determining they were willful in their misconduct. It will be interesting to see how the appeal goes on this--I talked to two lawyers well versed in Internet law on this yesterday, and they all seemed to think there was some, perhaps even a good, chance this would get overturned. You may recall a case a few years ago of Perfect 10 suing CCBill, some adult webhosting company (whose name escapes me now), and even Visa, for both copyright and trademark infringement based on secondary liability for some of their images being used on an adult website, and for the most part all of those claims were dismissed. Aside from just hosting, this could have major ramifications across many industries for what was deemed contributory trademark infringement. I'm sure someone like UPS or FedEx was delivering these counterfeits to customers, and they seem to be about as culpable in enabling commercial trademark infringement as the web hosting company, so are they next in line to get sued if they don't stop accepting packages from someone when another party informs them their customer is infringing on their trademark?

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