Ohio State University gets relief in appeal against retail service provider Redbubble over trademark infringement

Date Published: Jun 14, 2021

Redbubble Inc. (“Redbubble”) is an Australia-based online retail service provider with a global reach of over 600,000 artists who use the website with over $100 million in sales which has flowed through its platform. The Ohio State University (“OSU”) argues that Redbubble is responsible for infringing the trademark of products sold on its platform. Ohio contends that Redbubble violated the Lanham Act and Ohio’s right-of-publicity statute because it acted “less like a hands-off intermediary and more like a company that creates knock-off goods.” Ohio filed a suit in the United States District Court for the Southern District of Ohio at Columbus (“District Court”) (Ohio State Univ. v. Redbubble, Inc., 369 F. Supp. 3d 840 (S.D. Ohio 2019))  alleging trademark infringement and counterfeiting. Entering into a summary judgment for Redbubble, District Court held that Redbubble did not “use” OSU’s trademarked images while operating in the market place as it acted merely as a “transactional intermediary” between buyers, sellers, manufacturers, and shippers. The District Court held that the OSU’s arguments failed even “under the more lenient federal definition.” Aggrieved by this, OSU appealed to the United States Court Of Appeals for the Sixth Circuit (“Sixth Circuit”) (Ohio State Univ. v. Redbubble, Inc., No. 19-3388 (6th Cir. Feb. 25, 2021)). The Sixth Circuit reversed the District Court’s judgment stating that the platform also involves the creation of Redbubble’s own product and garment which would not have existed but for Redbubble enterprise. The Sixth Court viewed the District Court entering of summary judgment as a narrow interpretation of Lanham Act and therefore, it reversed the ruling.  

Redbubble’s platform includes various products such as different apparel, wall art, and other accessories emblazoned with an image selected by its customers. Various independent artists upload image on Redbubble’s interface where the customer selects through these images and places an order for a customized item. After the selection, Redbubble contacts the artist and arranges the manufacturing and shipping of the products. Redbubble never designs or manufactures any of the products but the shipped packages do bear its logo and moreover, it also handles services such as returns. All the execution of sales is being looked after by Redbubble itself. Primarily, it becomes a very good place for the artists to showcase their talent through Redbubble’s platform. With such a business platform, OSU alleges that Redbubble is responsible for the trademark-infringement of products sold on Redbubble’s marketplace. The dispute was not over the artist’s uploading of images which infringe trademarks and the appearance of those images on the website or even to the extent of customers paying for the product trademarked by OSU. The major question was about who would be held liable for the trademark infringement on Redbubble’s platform consider its role of managing the marketplace. OSU has generated more than $100 million dollars in the last seven years only through licensing programs conducting a “strict oversight of licensed products.” Through the conduct of this strict oversight, OSU found its trademarked images on Redbubble’s platform, without approval, thereby sending a cease and desist letter. 

Responding to the notice, Redbubble asked OSU to “specifically identify each infringing design.” As per the user agreement of Redbubble, it stated that trademark holder will have the burden of monitoring and redressing trademark violation. Responding to Redbubble, OSU sent nine photos containing offending items, to which Redbubble responded that the pictures weren’t enough. Due to a halt in communication, Redbubble did not remove the offending products. This resulted in OSU filing a suit in the District Court bringing claims alleging trademark infringement, counterfeiting, and unfair competition under the Lanham Act, as well as Ohio’s right-of-publicity law. OSU argued that Redbubble’s marketplace model differs from those used by Amazon, eBay, and other passive e-commerce facilitators, and Redbubble acts as less of an intermediary and as more of a website creating knock-off goods. District Court ruled that Redbubble did not use OSU’s trademarked images for its own operation and merely acted as the “transactional intermediary” between buyers, sellers, manufacturers, and shippers. Declining to address Ohio’s right-of-publicity statute creating a stricter use standard, it relied on the OSU argument that Redbubble met “the ‘use’ requirement under state law for the same reasons Redbubble [met] the ‘use’ requirement under federal law.” OSU now appealed to the Second Circuit claiming that the District Court has wrongly interpreted the Lanham Act. 

The Sixth Court denied taking up OSU’s argument of Redbubble being vicariously liable under the Lanham Act into consideration since OSU failed to raise this issue with the District Court. The Sixth Circuit notes that “This court does not ordinarily address new arguments arising for the first time on appeal.” Going further, the Sixth Circuit analyzed whether Redbubble’s “use” of OSU’s trademark under the Lanham Act was done through marketing. The Court clearly noted that online marketplace escapes the Lanham Act liability but those who design and print trademark infringing product will not escape the Lanham Act liability. The court noted that “what level of involvement and control must a defendant exercise over the creation, manufacture, or sale of offending goods is to be considered akin to a “seller” or “manufacturer” to whom Lanham Act liability applies” 

The Court states that the distinction between the seller who “uses” a trademark and a mere facilitator is “the degree to which the party represents itself, rather than a third-party vendor, as the seller, somehow identifies the goods as its own.” Putting all the execution over his hand, the Court noted that Redbubble is more than a “passive facilitator” and that “Redbubble brings trademark-offending products into being by working with third-party sellers to create new Redbubble product, not to sell the artists’ product.” Therefore, the “use” of OSU’s trademark provided the Sixth Court, with sufficient evidences to preclude summary judgment. While dealing with the OSU’s Ohio right-of-publicity claim, the Sixth Circuit concluded on insufficient record evidence and noted that they need to have details of contractual relationship of Redbubble with third party manufacturers. Finally, the Sixth Circuit concluded that “we REVERSE the lower court’s grant of summary judgment in favor of Redbubble and REMAND for fact-finding and for consideration of OSU’s claims under a standard consistent with this opinion”

Ohio State Univ. v. Redbubble, Inc., No. 19-3388 (6th Cir. Feb. 25, 2021)