In what is already being labeled a landmark case, Compagnie Financière Richemont, the luxury conglomerate that owns Cartier, Chloé and Montblanc, among other brands, is asking a UK high court to order a group of internet service providers (ISPs) to block sites offering counterfeit goods. Richemont has taken to Britain’s high court, asking the judge to order five of Britain’s largest ISPs providers (BT, Virgin Media, Sky, TalkTalk and EE) to utilize existing piracy laws to take down a total of seven websites that sell products that infringe upon Richemont trademarks (think: "Cartier" Love bracelets, Montblanc watches and fake Van Cleef and Arpels jewels).
In essence, Geneva-based Richemont wants British citizens to be prevented from visiting websites (such as CartierLoveOnline.com), which are selling counterfeit goods. Richemont is pursuing action in accordance with UK law, namely, Section 37(1) of the Senior Courts Act 1981, which gives the court authority to grant an injunction when in all cases in which it appears to the court to be "just and convenient to do so."
This quite obviously means nothing absent some insight and case law to define what scenarios a court would deem to be "just." Luckily for us, Shona Frame of UK-based MacRoberts LLP, shed some light on this, saying: "For Section 37 to apply, one party [Richemont in our case] needs to show that the other [the sites offering counterfeit goods] has invaded or threatens to invade its legal or equitable rights or that it has behaved or threatens to behave in a manner which is unconscionable."
The chances of the court granting Richemont's order (in accordance with Section 37) actually are not completely unfavorable. In fact, British broadband providers have been routinely ordered to take down links to websites offering illegal downloads since 2012, and per British law, once an online entity has been found in violation by the court, any future internet addresses associated with it are simply added to the banned list and can be blocked without a new court ruling. The problem for Richemont is that the case law in this area is almost entirely related to copyright violations (think: illegal downloads of games, books, music, films and television series), and not trademark/trade dress, which is at issue here, for the most part.
In terms of shutting down the seven individual sites, it shouldn't be much of a legal battle, as they are offering goods that infringe the trademarks and trade dress (the latter in the case of the Cartier love bracelet) of Richemont's subsidiaries.
The most difficult aspect of the case stems from the need to determine the role of the trademark holder in comparison to the role of the ISPs in the fight against counterfeit goods, and whether the ISPs at issue are liable for trademark infringement by way of hosting websites offering counterfeit goods. Judging by a string of cases (think: Tiffany v. eBay, Chloe SAS et al v. Sawabeh Information Services Co., and L'Oreal v. eBay), ISPs, web-hosting services, payment processing services, online marketplace sites, etc. may be held contributorily liable for the sale of counterfeit goods.
The case at issue follows the February settlement of the L'Oreal v. eBay case, which consisted of a seven-year battle initiated by L'Oréal. The French cosmetics giant sought to have counterfeits an array of counterfeits removed from eBay. While the case was ultimately settled, the European Court of Justice held in 2011 that eBay was not exempt from liability if it had knowledge and control over information about infringing items on its sites. This certainly weighs in Richemont's favor in terms of the counterfeit-selling sites. More to come …