Earlier this month, Cartier owner Richemont won a landmark court case against five UK internet service providers (ISPs), requiring them to block access to websites selling counterfeit goods online. This is great news for luxury fashion brands.
Luxury labels are increasingly vulnerable to online counterfeits, but this ruling allows them to take action against ISPs that provide access to infringing sites, rather than having to pursue the website operator itself, which could be difficult to identify or based in another jurisdiction.
The claimants were Cartier International, Montblanc-Simplo and Richemont International and the defendants were five “household name” ISPs – BSkyB, BT, EE, Talktalk and Virgin Media. Although blocking orders have been granted in copyright infringement cases for some time, this case confirms that the court has the power to grant them in respect of trademark infringement, too. The Court of Appeal also emphasised that it has a broad discretion to make such orders, so it is likely to extend to other intellectual property rights as well.
Following this judgment, website blocking orders are likely to become relatively routine, and it is likely that many applications will be dealt with on paper without the need for a hearing.
Further good news for fashion brand owners is that, although there was no suggestion of wrongdoing on the part of the ISPs (being innocent intermediaries), they were ordered to pay the costs of implementing the blocking. This is likely to be the position generally for blocking orders, although the court made clear that there may be individual instances where the brand owner will have to pay, for example if the court decides that the cost burden on the ISP in any individual case is disproportionate.
Brand owners will, however, naturally bear the costs of gathering evidence of infringing websites, making the application for a blocking order and ongoing monitoring of the situation in order to provide updates to the ISPs.
As for physical counterfeits, there are positive legal signs here too. Europe’s highest court, the Court of Justice of the European Union, this month gave judgment in respect of a case brought in the Czech Republic by Tommy Hilfiger, which indicates that operators of physical marketplaces may be obliged to step in to prevent traders using market stalls to sell fakes.
Of course, it is often the case that as soon as one infringing site (online or physical) is blocked, another pops up somewhere else. However, website blocking orders such as that won by Cartier, Montblanc-Simplo and Richemont in this case will undoubtedly be a useful tool for high-end fashion brands in the ongoing fight against a booming market in fakes that damages sales, brand reputation and consumer confidence in the legitimate market for luxury goods.
By Elaine O’Hare, Senior Associate
First published in Drapers, July 2016