In April 2017, based on some key social media evidence, the Central District Court of California decided UL LLC v. Space Chariot Inc., 2017 WL 1423706 (C.D. Cal. Apr. 20, 2017). The court held on summary judgment that Space Chariot had infringed and counterfeited UL’s trademark, and awarded one million dollars in statutory damages. UL, a holder of various safety certification marks, complained that Space Chariot, a manufacturer of “hoverboard” toys, had violated UL’s trademark rights by displaying UL’s safety certification marks on its hoverboards without permission. The court summarized the issues: “The gravamen of UL’s complaint is that [the defendants] are using UL marks on various websites to falsely represent that Space Chariot’s goods—namely, hoverboards—have been certified by UL.”
Counterfeiting, as the court described, is an “aggravated form of trademark infringement.” Where a court finds that an infringer willfully used a counterfeit mark, the plaintiff may elect statutory damages, as UL did in this case. The court found that because Space Chariot knowingly used marks identical to UL’s in order to mislead the public into thinking that they had passed certain safety certification tests, Space Chariot was liable for statutory damages of one million dollars.
Social media played an important role in the case. The court looked at evidence of social media profiles to determine both procedural and substantive issues. To determine whether UL was correct in including two of the defendants in the lawsuit, the court looked at their social media profiles. The court cited one of the defendants’ listing herself as an officer of Space Chariot on her professional social networking profile as evidence of her role with the company. Further, the court considered evidence that two defendants had promoted Space Chariot’s hoverboards on their social media profiles. Lastly, the Space Chariot social media page had advertised the hoverboards as “safety certified,” supporting the court’s finding of trademark infringement and counterfeiting.
The defendants argued that their supplier had indicated that a UL certification was in progress, and that they used the UL mark in reliance. However, the court pointed to the social media posts, which predated any relevant communications with the supplier, to support its findings.
This case is a cautionary tale regarding the use of social media. Even the personal profile of an employee or officer may be evidence for a court in determining a company’s liability. Businesses should set clear policies regarding employees mentioning or promoting them on social media. Additionally, companies should take care to understand the processes of obtaining safety and other certification marks, and ensure that they have followed the necessary steps to display them. Otherwise, the repercussions could be costly.
* Not yet admitted to practice law, Ms. Schmidt’s work is supervised by principals of the firm admitted in the States of Texas and New York.