The Continuing Fight against the Counterfeiters – A look at Cartier II and brand protection online

28 April, 2016

If you want to be original, be ready to be copied

  1. Coco Chanel’s quote has long reflected the reality for brands: by creating a valuable and attractive brand, you will inevitably attract imitators attempting to take unfair advantage of the goodwill in your brand.
  2. This article will look the advantage to brand owners of understanding what remedies may be available to you as part of a brand protection strategy when faced with the sale of counterfeit products online. I will also look at the role that Website Blocking Orders can play in that strategy, with reference to a recent High Court decision in a case brought by Cartier and Mont Blanc.

 

Counterfeiting

  1. Counterfeiting can constitute an infringement of a variety of different intellectual property rights: from patent and design rights (fake iPhones) to copyright (pirated movies and music) and trade mark rights (fake luxury products).

  2. The detriment to the brand is not only a direct loss in the form of lost sales revenue, but also damage to the unique identity of the brand.

  3. It may be possible to put in place various safeguards to help prevent, or at least detect at an early stage, trade mark infringement. However, coupled with that is a need to understand the potential remedies available to you when an infringement is discovered. Being able to act swiftly and decisively when the time comes may be critical to effectively protecting your brand.

 

Website Blocking Orders: Cartier I

  1. Websites selling counterfeit goods often broadly fall into 2 main categories: those which sell
     a. Overtly fake goods (which state they are fake or “imitation”); and
    b.  Impliedly genuine goods (which appear genuine but are in fact fake).

  2. These websites are attractive to consumers for different reasons. Websites in the first category are often very open about their sales strategy, emulating what a consumer may recognise from a market stall abroad: “£20 for an imitation Cartier watch”. In these circumstances the consumer knows both that it’s a fake and that the product is unlikely to be of the same quality as the genuine branded product that it’s imitating.

  3. Websites in the second category can go to extraordinary lengths to masquerade themselves as providers of genuine branded original products, available at lower than the normal RRP. The prices at which the goods are made available can be only a little less than RRP to add authenticity. Consumers can be fooled into thinking that they’re getting a good deal on a genuine product when in fact they’re not, which is particularly worrying in the case of medicines where counterfeit products may at best be simply ineffective but at worst, can be highly dangerous.

  4. In 2014, I wrote about the High Court’s decision in Cartier International AG and others v British Sky Broadcasting Ltd and others [2014] EWHC 3354 (Ch) (the so called ‘Cartier I’ case) in which the Court ordered that Website Blocking Orders be granted in respect of websites selling counterfeit Cartier and Mont Blanc goods.

  5. Please see my previous article here.
  6. A Website Blocking Order, as the name suggests, is a Court order made against an Internet Service Provider (in the Cartier I case, this was BT, Sky, EE, Talk Talk and Virgin Media, the main Providers in the UK) which blocks user access to the website in question.

  7. In Cartier I, the Court was conscious to try to strike the right balance between the protection of the rights of Cartier and Mont Blanc on the one hand, and the Providers’ freedom to carry on business and the users’ freedom to receive information on the other. Therefore, various safeguards were built into the orders, such as a right for subscribers to apply to vary the order and a ‘sunset clause’, limiting the time the order is in place.

  8. The Cartier I case was important because prior to it, website-blocking orders had only been granted in cases concerning copyright infringement (under s.97A of the Copyright Designs and Patents Act 1988), most commonly in respect of websites providing access to pirated Hollywood movies.

  9. However in Cartier I the Court was very much in tune with the real-world practical problems which can be faced by trade mark owners when trying to tackle counterfeiting online: it can be difficult or impossible to identify the infringers operating the offending websites, and even when they can be identified, they may hide in foreign jurisdictions in which the enforcement of intellectual property rights is difficult or impossible.


    Cartier II

  10. Whilst Cartier I is currently under appeal (it is due to be heard later in April this year), in 2015 the same claimants: Cartier and Mont Blanc (collectively referred to as “Cartier”) returned to the High Court, seeking Website Blocking Orders against the same Providers in respect of new websites selling counterfeit goods (“Cartier II”).

  11. In Cartier II, when deciding whether to grant the latest Website Blocking Orders sought, the Court applied the same test it established in Cartier I, balancing the needs of the brand owner and those of the Provider. Taking into account other considerations including proportionality, in February 2016 the Court granted the Website Blocking Orders sought.

  12. It should be noted that each case will turn on its own facts and so if you are a brand owner considering such a remedy, you should seek legal advice.


    Enforcing Trade Mark Rights

  13. In addition to Website Blocking Orders, there are other remedies which may be available to registered trade mark owners when faced with the sale of counterfeit products.

  14. Traditional remedies against trade mark infringement include:
    1. An injunction;
    2. Damages or an account of profits; and
    3. Orders for delivery-up or destruction of infringing goods (including the transfer of an infringing domain name)

  15. Before any court action is started, the first step is normally to send a ‘notice of infringement’ to the host, the registrar, the registrant and the operator of the offending website. Unless the website host agrees to take down the website, it will be necessary to engage in dialogue with the operator/registrant of the website.

  16. There are other practical steps which can be considered, such as notification to the payment provider used on the infringing website (VISA, for example), or a complaint to Action Fraud (the National Fraud and Cyber Crime Reporting Centre), as the act of counterfeiting is also a criminal offence.

  17. As a trade mark owner, you can apply to HM Revenue and Customs to intercept goods coming into the UK which are suspected of infringing your intellectual property rights if you know when and where they are likely to arrive.

  18. In respect of an injunction and/or pursuing a claim for damages in court, both remedies rely on being able to identify the infringing operator of the website: i.e. the counterfeiter. However identification of the counterfeiter may not be possible, or even if they are identified, they may reside in a jurisdiction in which enforcement is difficult or impossible. An injunction/judgment for damages/order for delivery-up of infringing goods can be reduced to being only a very expensive piece of paper if it cannot be enforced.

  19. Whilst online disputes in many cases can be quickly resolved through the traditional enforcement methods set out above, for those more exceptional cases you may then be left with little choice but to apply for a Website Blocking Order.


    Imitation is the sincerest form of flattery? Not quite…

  20. The time, effort and expense taken to build up a valuable brand places an obligation on the brand owner to protect its rights in the face of a continuing threat of damage from imitators seeking to take unfair advantage.

  21. Therefore as a brand owner, it’s important to understand the potential remedies available to you when an infringement is discovered. In terms of brand protection, being able to act swiftly and decisively may be the difference between success and failure.

  22. If you wish to discuss brand protection further with regard to your business, please contact me.