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  1. #1
    ABW Ambassador Greg Rice's Avatar
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    Web Hosts Hit With $32 Million Judgment For Content On Customers' Websites
    According to a California jury, hosting companies are responsible for the content of their customers. I can't help but wonder how this will affect affiliate marketing. Providing proof they are allowed to promote a merchant and use their logo? Higher hosting fees since the risk of lawsuits just increased?
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  2. #2
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    I'm against the general holding hosting companies responsible for what's on peoples websites but there's a little more to this case

    When you read - http://www.scribd.com/doc/19283259/L...c-Jury-Verdict

    It looks like it's more the hosting company was contacted about the infringement many times and willfully ignored it. Then they got sued.

    I don't think it's hosting companies have to monitor and take care of it on their own but more, if it's brought to their attention, then they have to act on it.

    Have to read more on it.

  3. #3
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    The case involved luxury goods retailer Louis Vuitton suing some web hosting firms for the actions of their customers. Any common sense ruling would find that the hosts are simply the tool providers, and it was the customers running the actual websites who were liable. That is, if there were common sense.
    I guess, these "web hosting firms" were hosting all these chinese sites selling counterfeit goods. My guess is also that these "web hosting firms" were more than related to these sites and refused to close the accounts of these thieves.

    I don't think it's going to affect affiliate marketing.

  4. #4
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    Look what's behind Akanoc
    "Welcome to Akanoc Solutions
    Ways that China enterprises can launch the American market - Corporate Global Supply Chain System - Overseas business agents help with purchasing from China "

    I'm glad these crooks got caught.
    More on the subject:
    http://www.dailyfinance.com/2009/09/...over-knock-of/
    http://www.washingtonexaminer.com/ec.../56383647.html

  5. #5
    ABW Ambassador simcat's Avatar
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    These types of sites are responsible for a lot of spam too.
    I'm kind of surprised they were hosted in the u.s, instead of .cn, .ru, etc.

  6. #6
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by Zeus
    Look what's behind Akanoc
    "Welcome to Akanoc Solutions
    Ways that China enterprises can launch the American market - Corporate Global Supply Chain System - Overseas business agents help with purchasing from China "

    I'm glad these crooks got caught.
    More on the subject:
    http://www.dailyfinance.com/2009/09/...over-knock-of/
    http://www.washingtonexaminer.com/ec.../56383647.html
    Steve Chen's been in the hosting business for years, and before starting/spinning off Akanoc was one of the partners behind Managed.com. The guy is a seasoned hoster, and the Akanoc line is part of his Akanoc/Coloalacarte/Managed Solutions Group (spin off from Managed.com's ownership split)/Dediwebhost business line. From what I can remember, he split off Coloalacarte/Akanoc in mid/late 2004, so this is not some fly by night hoster set up to host Chinese spam/counterfeit/fraud in the US.

    What's Steve's actual role in this was, isn't clear to me. I know he did business and traveled in China/Hong Kong at times, and was tailoring the Akanoc line to Chinese clients looking for US servers, but I'm not sure he'd quite risk his whole business leaving some LV counterfeiters on his network. Then again, I've never known the details of his businesses, and the court documents don't exactly describe the initial complaint or any actual claims/statements from Steve or his company.

    Will there be an appeal? I'm counting on it.

  7. #7
    Full Member snappy's Avatar
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    I would also like to think that the hosting company got sued because the knock off suppliers of the fake louis vuitton were based in China or where ever they are.... they couldn't contact them and so the lawyers did the next best thing because usually hosting companies will disable a account if something like this is brought to their attention. But the hosting company failed as posted above got sued and LOST good glad they lost...hosting companies are supposed to monitor who is using their name........
    I attract success and abundance into my life because that is who I am.

  8. #8
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    Quote Originally Posted by Joshua
    Will there be an appeal? I'm counting on it.
    I hope the guy ends up in jail!!!

    e-commerce and affiliate marketing will be safer without him.

  9. #9
    ABW Ambassador simcat's Avatar
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  10. #10
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    Pirated consumer goods and knock-offs are estimated by the U.S. Chamber of Commerce to be a $650 billion a year industry...
    How many U.S. jobs are lost?

    I'm sorry for your friend Steve, Joshua but I'm really please he got caught.
    If he is not some fly by night hoster, it makes it worse. He knows full well what he was doing.
    Managed Solutions Group is not a reference either:
    As listed by simcat:
    Even as far back as two years ago, Managed Solutions Group was
    mentioned as hosting spam and scam sites:
    http://www.scam.com/showthread.php?t=19503

  11. #11
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by Zeus
    I hope the guy ends up in jail!!!

    e-commerce and affiliate marketing will be safer without him.
    My issue is that I'd hate to see the whole company go dark one day and take all of the innocent clients out with it - He runs a datacenter that hosts thousands of web servers, and I know of a few people with sites still there.
    Quote Originally Posted by Zeus
    I'm sorry for your friend Steve, Joshua but I'm really please he got caught.
    If he is not some fly by night hoster, it makes it worse. He knows full well what he was doing.
    Managed Solutions Group is not a reference either:
    As listed by simcat:
    Even as far back as two years ago, Managed Solutions Group was
    mentioned as hosting spam and scam sites:
    http://www.scam.com/showthread.php?t=19503
    Steve's actually not my friend. The only dealings I've had with his businesses were short lived, since his company's tech support sucked. I used to be in the hosting business, so I talked with a LOT of datacenters, and despite Steve's often crappy tech support, he was professional at eventually addressing my complaints. I've seen Chinese affiliate fraudsters come through open proxies on his network (as with other networks), and I've seen those proxies get shut down due to the issues that come along with that. Not sure what would have made this situation different. An owner of another datacenter (higher-end competitor to Steve) said that Akanoc is listed as having registered DMCA agents, so if Akanoc willfully ignored the notices, that's their own fault, and they deserve the judgement.

    When you set up a branch of business to target people living in China, and those people set up shared hosting on those servers, it's a very risky business. If in fact he ignored claims, or had a business interest in keeping the bags flowing (aside from the hosting fees), that's another story. I just can't see anything besides the verdict sheet with the Yes/No options, so I have no clue about the details.

  12. #12
    ABW Ambassador Joshua's Avatar
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    Here's things from Akanoc's side - http://www.scribd.com/doc/19283261/A...-Matter-of-Law . I can imagine the case will go to appeal after reading that. Document page #11 line 10 (section E) pokes the largest whole in the argument - Akanoc was sued for Direct trademark infringement, not ignoring the DMCA. LV didn't seem to prove direct involvement, but the jury sided with them anyway. The initial complaint at http://news.justia.com/cases/feature...v03952/194697/ has LV stating that Akanoc/MSG was founded for the sole purpose of hosting counterfeiters' websites. That's false. The initial complain had no information in it about Akanoc ignoring DMCA notices.

    It's a scary precedent if a host or ISP can be sued without the proper legal channels being followed first. I don't have time to read all the documents right now, nor are they searchable, so that's unfortunate.

  13. #13
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    Quote Originally Posted by Joshua
    An owner of another datacenter (higher-end competitor to Steve) said that Akanoc is listed as having registered DMCA agents, so if Akanoc willfully ignored the notices, that's their own fault, and they deserve the judgement.

    When you set up a branch of business to target people living in China, and those people set up shared hosting on those servers, it's a very risky business. If in fact he ignored claims, or had a business interest in keeping the bags flowing (aside from the hosting fees), that's another story. I just can't see anything besides the verdict sheet with the Yes/No options, so I have no clue about the details.
    It has been going on for several years.
    It's not like Chen's dirty operation was closed from one day to another.
    He was selling his hosting like a “bulletproof” host with an ability to shield customers from legal hazard.

    August 1, 2007 Plaintiff: Louis Vuitton Malletier, S.A.; Defendant: Akanoc Solutions, Inc., Managed Solutions Group, Inc., Steven Chen
    http://dockets.justia.com/docket/cou...ase_id-194565/
    Yes, Akanoc willfully ignored the notices.
    "Under the Digital Millenium Copyright Act, a Web host can be held responsible for its subscribers' illegal actions if it benefited financially from those actions, was aware of the illegal activity but did nothing to stop it, or did not act quickly enough to remove the content."

  14. #14
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    Quote Originally Posted by Joshua
    It's a scary precedent if a host or ISP can be sued without the proper legal channels being followed first. I don't have time to read all the documents right now, nor are they searchable, so that's unfortunate.
    It's a great precedent! People like Chen give a bad reputation to other hosts.
    And, he was more than a host for these Chinese companies.
    From Bloomberg
    "The defendants helped “promote, advertise and facilitate the offer and sale of counterfeit merchandise which infringes the intellectual property of Louis Vuitton,” the company alleged. "

  15. #15
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    Some interesting reading about the connection between Counterfeit Goods and Organized Crime
    http://iplj.net/blog/archives/188
    Counterfeit Goods or Counterfeit Bads: The Copyright Anomaly
    by: The Fordham Intellectual Property, Media & Entertainment Law Journal

    or NYC campaign shows dark side of counterfeit goods
    http://www.reuters.com/article/lifes...42669920080517
    "It cost the city $1 billion per year in lost tax revenue.

    The money could have funded "10,000 new cops, 10,000 new firefighters, 10,000 new teachers," Deputy New York City Mayor Edward Skyler said."

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