Luxury jewellery brand Cartier has taken legal action in a bid to close down websites selling counterfeit goods. The case, taken against a number of service providers including BT and TalkTalk, is the first of its kind, requesting online service providers to close down websites featuring images that infringe the plaintiff’s trademark. Since 2012, British broadband providers have been legally obliged to take down links to websites offering illegal downloads of games, books, music, films and television series. If Cartier are successful, a similar system of injunctions to the one that blocks websites offering pirated music would be introduced to block websites selling counterfeit fashion goods.
The anonymity that the internet affords sellers of counterfeit goods, along with technological developments in the manufacturing process have created unprecedented enforcement challenges for authorities. The trade in counterfeit goods is now a multi-billion pound industry and is estimated to be worth £1.3 billion in the UK alone, the majority of which is sold online. Online counterfeit websites can disappear at the press of a button making it impossible to catch and stop many of the sellers.
As one might expect, the case is controversial. Critics argue Cartier’s request simply isn’t practical - a whole website could be blocked just because of the activities of a few sellers. Other’s raise important questions around free speech – could future claimants use blocking orders to restrict free speech? Are ISPs really responsible for policing trademarks? If not, who is responsible? The last decade has seen a slew of lawsuits aimed at holding intermediaries responsible. Are ISPs the new target?
Six brands under the LVMH umbrella including Christian Dior, filed complaints against eBay in 2006 accusing the company of allowing people to trade fake goods causing damage to the brands involved. In 2008, a French court ruled in favour of LVMH and fined eBay 38.5 million euro. The plot thickened when in 2012, French courts overturned the previous decision, stating that they could rule on eBay’s U.K. and French sites, but not on its U.S. website.
Back in January, L’Oreal and eBay called it a day on their six year battle and settled out of court. L’Oreal, the world’s biggest cosmetic company, had been battling eBay since 2007 in several jurisdictions, accusing the company of doing little to combat the sale of counterfeit L’Oreal products. Following rulings in the UK and Belgium, in 2011, the European Court of Justice considered L’Oreal’s lawsuit against eBay and handed down a judgement which provided clarification to national courts on the liability of companies operating internet marketplaces for trade mark infringements committed by users.
They ruled that operators could be liable for infringement where they fail to promptly remove listings when they are aware of circumstances which suggest that those listings are unlawful. Where the operator of an online marketplace provides assistance intended to optimise or promote offers for sale by users, it will be playing an active role. The ECJ indicated that not only should national courts be able to take measures against ISPs to end existing infringements, but also to prevent further infringements. This could include suspending accounts and identifying the infringing users.
The ECJ decision was in contrast to that of the US courts in a similar case. In 2008 eBay were sued by jewellery brand Tiffany & Co. eBay successfully argued that it was a platform for buyers and sellers to interact and, therefore, not liable for counterfeit items posted by sellers. Brand manufacturers, eBay maintained, were responsible for finding the items they believed to be fakes and requesting their removal. eBay immediately takes down items in response to complaints, leaving se
llers to take up their case with the rights holder. The Court held that Tiffany failed to establish that eBay intentionally set out to deceive the public; much less that eBay’s conduct was sufficient to create a presumption that consumers were being deceived.
The decision in the Cartier case will have far reaching affects for effects for all internet users. Justice Arnold has asked for more information on how legitimate internet users could be affected by injunctions before making any decisions. A spokesperson for Richemont (Cartier’s parent company) today contacted Wigs And Gowns with the following statement;
“This action is about protecting Richemont’s Maisons and its customers from the sale of counterfeit goods online through the most efficient means, it is not about restricting freedom of speech or legitimate activity. When assessing a site for blocking, the Court will consider whether the order is proportionate – ISP blocking will therefore only be used to prevent trade mark infringement where the Court is satisfied that it is appropriate to do so. Orders will not be made in respect of established marketplaces or websites where only a few sellers are responsible for counterfeit goods.
Richemont has a long and demonstrable track record of working in partnership with responsible intermediaries to promote a secure, stable and trusted Internet. This action is part of Richemont’s wider digital strategy to deal effectively with the significant threat and damage caused by the abundance of counterfeit goods being made available to consumers. Richemont’s ultimate desire is to work with other responsible intermediaries, as it has done so in the past, to promote a secure, stable and trusted Internet and to stop the sale of illegal counterfeit goods online through the most efficient means.”
More to come on this one, folks. Stay tuned to Wigs And Gowns!