Not so Bright Builders

Posted by | March 17, 2011 | General | 18 Comments

It’s a scary time to be a web designer or a search engine optimization (SEO) service provider in South Carolina.  Not since Stephen Colbert declared himself Governor, have South Carolinians been so riddled with fear.

Yesterday, the United States District Court for the District of South Carolina ordered defendant Bright Builders, Inc. to pay $770,750.00 in damages for contributory trademark infringement as the result of a jury verdict against it for constructing and providing web hosting services to a company it knew to be infringing on third parties’ trademarks.

Roger Cleveland v Prince Judgment

This very same group of jurors determined that defendant Christopher Prince and Prince Distribution, LLC (Prince) should pay $28,250.00 in damages for their direct and willful trademark infringement on third parties’ trademarks.

So, in South Carolina, it’s less bad to do something bad than it is to help someone do something bad.  Perhaps logic didn’t play into the jury deliberations.  Perhaps the jurors were frightened because Prince Distribution’s headquarters is located on Tigershark Ave, so they got the damage awards backwards.  Whatever the jurors’ motivation, this judgment sets a new precedent for contributory infringement.

So what happened?  What could lead twelve citizens of South Carolina to award 28X more damages against the indirect infringer than the direct infringer?  Who knows!?!  The Verdict Form explains the jury’s calculations, but not its reasoning (the calculations don’t seem to make sense either).

What we do know is that Bright Builders assisted with the construction and hosting of a website for Prince.  If you’re a service provider and you think one of your clients is a counterfeiter, you best investigate your hunch.  If your suspicions are confirmed, you should consider ceasing to provide services to the infringer, lest you risk (sufficient) liability for what amounts to “aiding and abetting” counterfeiting.

About Lara

Lara Pearson is a trademark attorney with Exemplar, where she also serves as the firm's Sustainability Steward. Lara's legal practice focuses on trademark and copyright law, including: intellectual property audits; trademark search & clearance; trademark and copyright registration & maintenance; intellectual property transfers; transactional work; and dispute resolution, including litigation when necessary. Lara primarily represents other social enterprises -- those leveraging their businesses and brands as catalysts for positive social and environmental change. Such businesses engage in CSR (Corporate Social Responsibility) to have a positive "triple bottom line" of people, planet and profit. As Exemplar's Sustainability Steward, Lara works with others in her law firm to measure and reduce the firm's carbon emissions and encourage engagement in social responsibility initiatives, including pro bono legal work and volunteering. Lara is a proud member of the Social Venture Network. Brand Geek is a member of 1% for the Planet and a Certified B Corporation, whose Incline Village office is certified under the regional Keep the Sierra Green program. Exemplar Companies is the most innovative professional services firm in the New Economy. Our unique, diversified expertise spans the disciplines of corporate law, business advisory, and capital/investment banking to better meet the needs of our high-potential customers. We have assembled a comprehensive suite of service to meet the complex issues facing companies in today’s challenging business environment. Our unique, holistic approach ensures the growth and success – and greatly increases the competitive advantage - of our customers. The Exemplar team is comprised of knowledgeable, highly skilled experts in a wide range of industries and disciplines. They work closely with our customers to provide trusted advice, incomparable support, expert guidance and the ultimate competitive advantage as they accelerate their businesses and position themselves to transform industries.

18 Comments

  • Sally says:

    I got roped into Bright Builders, sortly after 9/11. I was depressed and out of work. I had sent in one of those cards in the mail that I was interested in making money from the internet. THAT company did not call me, however, Bright Builders did, and they high pressured me over and over, and I relented. I called them once and I never called again since I felt ashamed, stupid, dupped and totally disappointed with myself.

    In any event, does anyone know if I would be able to recover some of my $7000.00 pipe-dream? Is Bright Builders bankrupt? Any info would be grateful!

    Happy holidays to all!

    • Lara says:

      Sorry to hear that, Sally. If that happened back in 2001 the statute of limitations (legal time limit on enforcing your rights) almost certainly has expired, sad to say. You might want to contact your state’s Attorney General’s Office – probably the Department of Consumer Affairs (or something like that) to see if there is any legal action against Bright Builders in which you may be included. Most likely though, my guess is that you waited too long. If anyone else posts something more helpful I’ll approve it here.

    • cindy says:

      I had just arrived home from the Denist after having a tooth pulled, having had gas and pain medication. I too was conned from a smooth talking David Trent (a bright builder employee). I had called a day earlier about an on-line class I was interested in. When David Trent called me, I ask if this was the on-line class, he indicated it was. It was not. Before I had a chance to think I was pressured into this scam. I then received a second contact person, Paul Castillo (also a bright builder employee) and told him I was uenemployed and I can not fulfill this commitment. He told me to get a job. I had to take a job and it took me years to pay this off. I could not attend my son-in-laws funeral (he died at 31 with cancer) out of state because of the financial burden bright builders put on me. I too felt ashamed and frustrated to be scammed.

      • Lara says:

        Thank you for sharing your story, Cindy. Sorry to hear of your Bright Builder troubles. I hope things are better for you now.

        • cindy says:

          thank you…I wonder how many people this continues to happen too… this is so unfair…between Sally and I we are talking $10,000.00… This is a crime.
          I do not think they should be able to do this. There must be some thing we can do. This was Nov. 2007 for me. So now I know how long this has been going on. When you are new at the computer, you do not know what kind of people are out there. If Sally wants to find a solution for this have her contact me. e-mail address removed. I am writing the attorney general. It cost me more than money.

          • Lara says:

            Thanks, Cindy! I think it’s great that you’re willing to be a resource for others. I removed your e-mail address from your comment cause I don’t want you to get spammed, but if anyone contacts me for help fighting Bright Builders I will be sure to connect you with them. While your case probably is past the statute of limitations (the deadline for bringing legal action), the more information your Attorney General has about this and other scams, the better. Best of luck to you!

            • cindy says:

              thank you.. what is the statue of limitation on something like this? Certainly have any one contact me, even if its just to have someone to talk to about this. So no more are deceieved.
              Thanks again for your time and effort as well.

              • Lara says:

                Hi Cindy:

                I am not sure what the Statue of Limitations (SOL) is for fraud in your state; Nevada (where I live) it’s 3 years from the discovery of the fraud.

                I found this website: http://www.statuteoflimitations.net/fraud.html with each state’s SOLs, but I am not sure about it’s accuracy.

                Thanks again for your compliments.

                Have a joyful day.

                • cindy says:

                  I am from Minnesota which is 6 years so I have time left…what steps should I take? thank you

                  • Lara says:

                    Hi Cindy:

                    I can’t give you legal advice, but I am happy to give you some resources. It sounds like you have contacted the Minnesota Attorney General’s (AG’s) office, which is the smartest thing to do. The AG can (doesn’t mean they will) bring an action on behalf of you and all similarly situated folks in your state, without cost to you. You also should look into filing a small claims action in your state. The rules should be really straight forward and such courts are designed for unrepresented folks. There also may be legal clinics at law schools in your area that can help you if you decide to file a small claims case. Your state’s AG’s office also may be able to suggest other avenues of recourse. Good luck, Cindy!

  • Allan says:

    As a SEO I am shocked by the stupidity of the court. B clark it seems that design companies must now be paranoid about shady clients ruining not only their reputations but destroying their businesses.

    • Lara says:

      More important that this court’s bizarre ruling is how the other US courts handle this opinion when evaluating similar issues. Hopefully this will be an anomaly in US jurisprudence, though for now SEOs need to be cognizant of the potential risk.

  • b clark says:

    I should also mention that Bright Builders wasn’t based in South Carolina. I think maybe Prince lives in South Carolina. So if you have any customers in South Carolina you should be concerned.

    Fortunately most companies are reasonable enough to send you a cease and desist instead of going straight to court…

    • Lara says:

      Bright Builders is HQ’d in Utah, so, yes I agree this opinion directly impacts folks who have clients in South Carolina as well as those operating in that state. It also has indirect consequences for all Internet Intermediary service providers, as it is likely to be cited as persuasive authority in all jurisdictions.

  • b clark says:

    There won’t be an appeal. Bright Builders doesn’t have any money to appeal. It’s already out of business with this verdict – it was already heavily in debt – the verdict is blood from a turnip.

    Prince did lie and say that Bright Builders was aware of what he was doing and had talked with an employee about it. The moral of the story is that if you have a customer that is slimy enough to brazenly copy clubs he will be slimy enough to lie and implicate you even if you knew nothing about it.

    So the lawyer’s statement in the press releases you read is right. You need to have documented policies and training in place to show that you are proactively looking for trademark infringements.

  • b clark says:

    It’s even worse that you think. I used to work at Bright Builders several years ago and still keep in touch with the owner of the now forced out of business because of this decision Bright Builders. Bright Builders had no idea that the guy was even selling trademark infringing clubs on his website. The golf company never even sent a cease and desist. The guy only ever sold 1 club. But apparently the jury felt that Bright Builders should have known that the guy was selling trademarked stuff on his website and found them guilty – scary!

    Also there is an error in your article. Bright Builders did not build the website – it provided tools for their customers to build their own websites.

    Really the only thing that could have alerted Bright Builders to what was going on was that the domain name was copycatclubs.com – of course the domain name was registered automatically through an online form and no one an Bright Builders reviewed the domain name.

    So if you are a service provider you better have some kind of documented user agreement and training of your employees in place that you actively prevent your customers from doing infringing on trademarks.

    • Lara says:

      Thanks for reading and commenting on my post. I also appreciate your correction about Bright Builders’ design of the copycatclubs.com site — I got that info from several news articles and blogs, but those sources aren’t always accurate. For such a monumental judgment it is surprising how little info is available.

      I agree that the judgment is even more frightening if Bright Builders did not actively design the website. It will be interesting to see how this plays out on appeal.

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