Judge Baer of the Southern District of New York has allowed Gucci to proceed with contributory infringement claims against credit card processing companies that processed purchases for web site selling counterfeit Gucci products.

Judge Baer concluded that there was insufficient evidence to support direct trademark infringement, but sufficient evidence to support contributory trademark infringement.  Specifically, the court noted that the middleman who set up the merchant account actually advertised on its website that it worked with “high risk merchants” including those who sold “replicas.”

We are unsure about the wisdom of this decision.  We anticipate an appeal.  Third party liability is a tricky beast since it essentially imposes liability for knowledge rather than conduct.