6 July 2016Trademarks

UK court dismisses ISP appeal in Richemont counterfeits case

The English Court of Appeal has today dismissed an appeal by five UK-based internet service providers (ISPs) against a decision ordering them to block access to websites that sell counterfeit products.

All five of the ISPs—Sky, BT, EE, TalkTalk and Virgin—had been in dispute with luxury goods company Richemont.

Richemont, which owns brands including Cartier and Montblanc, sued the ISPs seeking an injunction that would force them to prevent access to sites selling counterfeit goods after a brand has requested a court order.

In a judgment handed down in October 2014, the High Court accepted the claim, marking the first time that brand owners successfully asked a court to block websites accused of infringing trademarks. Previously, IP owners could only request such orders for websites that infringed copyright.

In their appeal against the decision, the ISPs said the court could not order blocking of counterfeit sites because the UK did not specifically allow for it.

They added that it was not proportionate to block websites selling counterfeits because they are not heavily used (in contrast to copyright infringing websites) and that ISPs should not bear the cost of imposing blocking orders in their systems.

However, the Court of Appeal disagreed and upheld the High Court’s decision.

The court said that the activities of the websites at issue and other online counterfeiters caused significant damage to Richemont and that blocking these sites would probably be highly effective.

It added that the jurisdiction to impose orders on third-party intermediaries like ISPs could be found in established statute and that: “The courts were able to adapt to new circumstances by developing their practice … where it is necessary and appropriate to do so to avoid injustice …”

Simon Baggs, partner at law firm Wiggin IP, which represented Richemont, said: “This case is about using technology to stop the activities of unlawful websites.

“The court has recognised that often the best way for online unlawful activity to be stopped is for intermediaries such as ISPs to cut the internet lifeblood that the websites need to trade. Site blocking is a developing area in many jurisdictions globally and this judgment should further enable the growth of this important remedy.”

Elaine O’Hare, senior associate at law firm Stevens & Bolton, added: “This decision is good news for brand owners vulnerable to online counterfeits since it creates a precedent for winning website blocking injunctions against the ISP hosting the site, rather than having to pursue the website operator itself who could be difficult to identify or based in another jurisdiction.

“It is bound to encourage similar cases, which may help to curtail the booming market for counterfeit goods, but is likely to place a cost and time burden on the ISPs against whom orders are made.”

James Sweeting, senior associate at law firm Lewis Silkin, said the decision provides a “specific interpretation of the EU's Enforcement Directive, which has technically not been transposed into English law”.

He added: “Had the decision been taken after the strings of ‘Brexit’ had been untangled, we would likely have needed new statutory legislation in the UK in order for brand owners to benefit from blocking injunctions.”

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More on this story

17 October 2014   Brand owners in the UK will for the first time have the power to order internet service providers to block websites selling counterfeit goods, following a ruling at the English High Court today.
4 September 2015   This week we reported on another IP dispute centring on the Olympics, Richemont’s battle against ‘counterfeits’ and a Fox v hamster row.