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Preventing the sale of counterfeit goods online

A welcome development for trade mark owners.

This case shows how trade mark owners can require Internet Service Providers to block websites that infringe trade mark rights. It is particularly relevant for trade mark owners who are seeking to prevent the online sale of counterfeit goods from outside the UK, in territories where enforcement can be difficult.

On 17 October 2014, Mr Justice Arnold delivered a judgment in the High Court that recognised the power of the UK Courts to require Internet Service Providers (ISPs) to block websites which infringe trade mark rights.

This landmark case recognises that blocking injunctions, ordinarily made against ISPs on the basis of an infringement of copyrighted material by a website, can also be made where trade mark rights have been infringed.

This is particularly relevant for trade mark owners who are seeking to prevent the online sale of counterfeit goods from outside the UK, in territories where enforcement can be difficult.

Case background

The Richemont Group (Richemont) holds a significant portfolio of trade marks, including exclusive brands such as Cartier and Mont Blanc.

In 2014, Richemont identified a number of websites which supplied counterfeit goods targeted at UK consumers. These websites infringed Richemont’s trade marks by including trade marks in the URL or webpages, selling goods that featured those trade marks, or linking to webpages which displayed those trade marks.

Before proceedings were issued, Richemont tried to contact the websites’ owners, who were based in China and using servers in the US, but those efforts failed. They also made written requests to the ISPs, requesting that the sites be blocked, but those requests were not complied with.

Richemont subsequently applied to the High Court to force the   ISPs to block the websites identified as breaching the trade marks. Such orders are commonly sought where a website has breached copyright, and are granted by virtue of section 97A of the Copyright Designs and Patents Act 1988 (CDPA). However, Richemont argued that the Court had jurisdiction to make similar blocking orders in circumstances where trade mark rights are infringed pursuant to section 37(1) of the Senior Courts Act 1981, or in the alternative that s37(1) should be read in accordance with Article 11 of the Enforcement Directive, so granting the Court such jurisdiction. 

The Court’s View

The Court concluded that it did have jurisdiction and held that the conditions to be satisfied were effectively the same as those for blocking injunctions under s97A CDPA, those being:

  • The ISPs must be intermediaries.
  • The users of the website must be infringing the claimant's trade marks.
  • The users must use the ISPs' services to do so.
  • The ISPs must have actual knowledge of the infringement.

In Cartier, all of these conditions were found to have been satisfied. The Court then went on to consider a number of principles, proposed by the ISPs, to be satisfied before granting the blocking injunctions, namely that the relief must:

  • Be necessary.
  • Be effective.
  • Be dissuasive.
  • Not be unnecessarily complicated or costly.
  • Avoid barriers to legitimate trade.
  • Be fair and equitable and strike a “fair balance” between the applicable fundamental rights.
  • Be proportionate.

Mindful of the balance between web user and trade mark owners’ rights, the Court placed particular emphasis upon proportionality. It concluded that, in order to establish that the granting of a blocking order is proportionate, the following should be considered:

  • The comparative importance of the rights that are engaged and the justifications for interfering with those rights.
  • The availability of alternative measures which are less onerous.
  • The efficacy of the measures which the orders require to be adopted by the ISPs, and in particular whether they will seriously discourage the ISPs' subscribers from accessing the Target Websites.
  • The costs associated with those measures, and in particular the costs of implementing the measures.
  • The dissuasiveness of those measures.
  • The impact of those measures on lawful users of the internet.

The potential for increased costs being incurred by ISP providers as a result of implementing blocking orders was at the forefront of the Court’s considerations. The Court recognised that the success of future applications will depend upon the Court’s assessment that the costs incurred by the ISP are proportionate to the order sought. The Court noted that ISPs will bear the financial burden of implementing blocking orders, but that trade mark owners will incur the costs of/for? Court applications.

In Cartier, the Court considered that the test set out had been met, and therefore granted the order, subject to the inclusion of a ‘sunset clause’ (a termination date) in the injunction, thereby adhering to the principal of proportionality. The Court granted the order subject to a message being displayed on the blocked web page, giving the reasons that the page had been blocked and by whom. Both of these additional requirements had been suggested by the Open Rights Group, which had been allowed to make submissions to assist the Court.

Going forwards

This case is a welcome development for trade mark owners who are looking to protect their brand and prevent the sale of counterfeit goods. Before taking these steps however, trade mark owners need to ensure that they have exhausted other avenues of enforcement. At the very least, trade mark owners should (as Richemont did) attempt to contact website owners and  ISPs before action is taken.

Trade mark holders should also be aware that blocking orders are not a silver bullet in the protection against infringement of trade mark rights online - the effectiveness of blocking orders will be limited if the infringing websites register an alternative domain name or change their IP address, as has often been the case where sites are blocked due to copyright infringement.

If you have any questions about this article, or want to know more about protecting your brand online please contact us.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.