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Richemont Group Fights Counterfeiting

Curbing the copycats

The reputation and prestige associated with coveted luxury brands makes them a common target for counterfeiters, who are increasingly harnessing the power of the internet to reach a global market of price-conscious consumers. With the sale of imitation items likely to result in both loss of sales and considerable damage to your brand, it is essential to take every possible step to protect your trademark rights on the worldwide web. The widely reported case of CARTIER INTERNATIONAL AG & ORS V. BRITISH SKY BROADCASTING LTD & ORS illustrates the English courts’ recognition of the important role ISPs have to play in the prevention of trademark infringement online.

Site blocking injunctions

          The case begun when the Switzerland-based Richemont Group, acting through its Cartier, Montblanc and IWC “maisons”, brought an application against the 5 main UK ISPs (Sky, BT, EE, TalkTalk and Virgin) on the basis of trademark infringement. The order, if obtained, would require the ISPs to block access to 6 websites infringing Richemont’s registered trademark rights by advertising and selling counterfeit goods. In reaching a decision, the court had to consider two main factors; firstly whether the High Court had the jurisdiction to make blocking orders on account of trademark infringement and, if so, whether the orders sought were effective and proportionate. The judge ruled that the Court had the jurisdiction to grant an injunction under s37(1) of the Senior Courts Act 1981. He further explained that the following 4 conditions had to be met in order for website blocking injunctions to be issued:

    •    That the respondent is an “intermediary” within the meaning of Article II.
    •    That the operators of the target websites infringed the claimants’ trademarks.
    •    That the operators use the ISP’s services to infringe; and
    •    That the ISPs had actual knowledge of the infringing use of their services.

Satisfied that the above conditions were met in this case, the judge also determined that, as there were no alternative measures available that showed a better balance of efficacy and burden to the parties, the orders were also proportionate. However, aware that such orders are open to abuse, Arnold J added the important proviso that "in future orders should expressly permit affected subscribers to apply to the Court to discharge or vary the order”, also ruling that a sunset clause should be incorporated to ensure that the order is not indefinite.

Dr Ma’s remarks

          The High Court’s ruling in this case is a landmark judgement, confirming that trademark owners can attain orders requiring ISPs to block access to websites offering counterfeit versions of their goods. Although courts had previously granted orders requiring ISPs to block access to websites infringing copyright, this is the first case in the EU to consider trademark infringement in this way. As such, it is likely to have significant implications for trademark owners and ISPs across the UK and Europe.
          Of course, such a judgement can only bring justice where an infringement is clearly established. Our firm has just handled a similar case in which our client was barred from selling their products via an internet platform because a competitor accused them of infringing their design rights. Having successfully challenged the complainer, the matter has been settled such that the complaint has been withdrawn and the bar lifted. However, what is still outstanding is the quantum of damages that our client is seeking against the complainer. Two observations can be drawn from our experience:

    •    Always be sure that there was an infringement as alleged before issuing any complaint.
    •    The ability of the provider to block site access is open to abuse by companies motivated by competition. (This point is also illustrated in the above case by the conditions under which the Court granted the orders.)  

Dr Alan Ma,
Founder and Partner,
Maxwell Alves Solicitors,
London | Edinburgh | Hong Kong

www.maxwellalves.com