Gibson Guitar Corp. v. Viacom International

Having a licensing agreement with a 3rd party infringer is not alone sufficient to expose a trademark owner to claims of vicarious and contributory infringement.

Opinion (Pregerson): Gibson Guitars ("Gibson") owns trademarks to the “Flying V” body shape design, peg-head design, and words. Viacom International ("Viacom") owns the Nickelodeon and SpongeBob Squarepants trademarks. The British company John Hornby Skewes & Co. ("JHS") sells products bearing the SpongeBob Squarepants trademarks including ukuleles that allegedly infringed on Gibson’s Flying V design. Gibson filed suit against Viacom alleging that JHS was using Gibson’s Flying V trademarks without authorization and that Viacom was liable for contributory and vicarious infringement as a result of JHS’s infringement. Viacom filed a 12(b)(6) motion to dismiss. The Court held that to succeed on a contributory infringement claim, the Inwood Labs v. Ives Labs precedent requires a plaintiff to prove that the defendant both: 1) intentionally induced the infringement and 2) continued to supply a product with knowledge that the infringer was mislabeling the supplied product. To succeed on a vicarious infringement claim, the Court held that a plaintiff must show that the defendant and the infringer had joint ownership or control over the infringing items. The Court held that Gibson had not alleged facts upon which relief for contributory infringement could be granted because: 1) Gibson only alleged that Viacom provided JHS with a license to use the SpongeBob trademarks (not an actual product) and because 2) Gibson only alleged that Viacom knew of the infringement because of their duty to police their own trademarks (which the Court concluded did not carry a duty to ensure that licensed products did not infringe on 3rd party trademarks). The Court further held that Gibson had not alleged facts upon which relief for vicarious infringement could be granted because Gibson had only alleged that Viacom had control over its trademarks through the license agreement which did not rise to the level of control necessary to sustain a vicarious infringement claim. The Court therefore granted Viacom's motion and DISMISSED the complaint with prejudice.