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This information is taken directly from the court opinion. It is not taken out of context nor is it altered.

From Fonovisa Inc. v. Cherry Auction, 76 F.3d 259 (9th Cir. 1996)

[28] Just as liability for copyright infringement can extend beyond those who actually manufacture or sell infringing materials, our law recognizes liability for conduct that assists others in direct trademark infringement. In Inwood Laboratories, 456 U.S. 844, 102 S.Ct. 2182, the Court said that contributory trademark liability is applicable if defendant (1) intentionally induces another to infringe on a trademark or (2) continues to supply a product knowing that the recipient is using the product to engage in trademark infringement. Inwood at 854-55. As Cherry Auction points out, the Inwood case involved a manufacturer-distributor, and the Inwood standard has generally been applied in such cases. The Court in Inwood, however, laid down no limiting principle that would require defendant to be a manufacturer or distributor.

[29] The defendant in Inwood distributed drugs to a pharmacist, knowing that the pharmacist was mislabeling the drugs with a protected trademark rather than a generic label. In this case, plaintiffs correctly point our that while Cherry Auction is not alleged to be supplying the recordings themselves, it is supplying the necessary marketplace for their sale in substantial quantities.

[30] In Hard Rock Cafe, 955 F.2d 1143, the Seventh Circuit applied the Inwood test for contributory trademark liability to the operator of a flea market. In that case, there was no proof that the flea market had actual knowledge of the sale by vendors of counterfeit Hard Rock Cafe trademark merchandise, but the court held that contributory liability could be imposed if the swap meet was "willfully blind" to the ongoing violations. Hard Rock Cafe, 955 F.2d at 1149. It observed that while trademark infringement liability is more narrowly circumscribed than copyright infringement, the courts nevertheless recognize that a company "is responsible for the torts of those it permits on its premises `knowing or having reason to know that the other is acting or will act tortiously. . . .'" Id. quoting Restatement (Second) of Torts 877(c) & cmt.d (1979).

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