Is Redbubble’s Bubble Bursting?

Redbubble, an online marketplace for print-on-demand products based on user-submitted artwork, could be in hot water for trademark infringement. Redbubble allows artists to advertise designs that are placed on apparel and other items chosen by the consumer, unlike other online marketplaces, such as Amazon, which sell pre-made goods. Two recent federal court decisions, however, suggest that retailers using the Redbubble model could be held liable for trademark infringement claims based on their users’ activities.

­­Online marketplaces typically avoid liability for trademark infringement claims because they are identified as “passive facilitators” or “transactional intermediaries” that do not use the infringing mark as defined under the Lanham Act.[1] (See our article: “Acting Responsibly: Oberdorf v Amazon.com Inc, and other various cases,” Intellectual Property Magazine, Nov. 2020.) Following this rule, a district court in Ohio granted Redbubble’s motion for summary judgment when the Ohio State University alleged trademark infringement by the retailer as it offered products bearing OSU trademarks. The district court held that Redbubble was a mere “transactional intermediary” between buyers and sellers.[2]

However, last week, the Sixth Circuit overturned that ruling, holding that the district court used an “overly narrow reading of the Lanham Act.”[3] Ohio State’s ultimately successful position was supported in the Sixth Circuit by amicus curae briefs filed by the International Trademark Association and numerous other universities (including, in a twist for Big Ten football fans, the University of Michigan). The Court found that trademark infringement liability exists on a spectrum from passive facilitators such as Amazon who may avoid liability when selling third-party goods, on the one hand, to brick-and-mortar vendors who are the ‘typical’ infringers and may be held liable for infringing products sold in their stores, on the other hand. In the Ohio State case, the Sixth Circuit held that, because “products ordered on Redbubble’s website do not yet exist, come into being only when ordered through Redbubble, and are delivered in Redbubble packaging with Redbubble tags,” the district court erred in placing Redbubble on the passive end of the liability spectrum.[4] The Court ultimately remanded the case to the district court for additional fact-finding.[5]

This follows a California district court decision last month that denied Redbubble’s motion for summary judgment in a trademark infringement case brought by the video game company Atari. That court held that neither party had met the standard for summary judgment regarding whether Redbubble used Atari’s trademark in commerce or merely facilitates its customers’ use of that mark, and permitted Atari’s claims regarding direct, vicarious, and contributory trademark infringement to go forward.[6]

This apparent willingness of the courts to hold Redbubble liable based on the activities of its users signals another shift in this rapidly evolving area.