Cartier and others v. BskyB and others [2014] EWHC 3354 (Ch)

On 17 October, the UK High Court handed down a significant judgement for trade mark owners.

Background to the case

The Claimants are the owners of various trade marks including CARTIER and MONTBLANC (Collectively referred to as ‘Richemont’). The Defendants are the 5 main retail internet service providers which between them have a market share of 95% of UK broad band users.

The Claimants wanted to require the ISPs to block access to websites which were known to sell counterfeit goods through blocking injunctions.

Orders had previously been awarded to copyright holders but this case specifically attempted to combat trade mark infringement rather than copyright infringement.

The case was originally directed against 7 websites which all advertised and sold counterfeit goods under the Claimants’ trade marks.

General Issue

Counterfeiting is a very serious issue for brand owners. The sale of goods on the internet is ever expanding. The sale of counterfeit goods creates many issues. It not only affects rights holders financially through loss of sales but there is the issue of the goods being of a lower quality. There is also the possibility that the brand name will be diluted as the exclusivity that goes with the brand is affected. If purchasers believe they are purchasing genuine articles and receive an article which is not of the quality they were expecting then it is possible that consumers would lose confidence in the brand.

Judgement:

This judgement provides a very good summary of how blocking orders should be assessed and the safeguards that are applicable.

Various questions were put before the Court and Arnold J:

  1. Did the court have jurisdiction to grant such an order?

In his judgement Arnold concluded that it did.

He referenced various cases, directives and laws in reaching his conclusion. His decision was based upon a purely domestic interpretation of section 37(1) of the Senior Courts Act 1981.

He concluded that not only does the Court have jurisdiction to grant a website blocking injunction but that there was a principled basis for doing so as well.

  1. If the Court has jurisdiction, what are the threshold conditions, if any, which must be satisfied if the Court is to make an order?
  • Are the ISPs intermediaries?
  • Are the operators of the Target Websites infringing the Trade Marks?
  • Do the operators of the Target Websites use the ISPs’ services to infringe?
  • Do the ISPs have to have actual knowledge of this?
  1. Are those conditions satisfied in the present case?

The conclusions reached were that the ISPs were intermediaries. The operators of the websites were infringing the registered trade marks of the Complainants by using their trademarks and offering goods for sale under their trade marks and making actual sales of goods under their trade marks Therefore the operators of the websites were using the ISPs’ services to infringe as the ISPs were providing access to the internet thereby making possible the transmission of the infringement. In terms of actual knowledge it was concluded that if the operators of the websites use the ISPs’ services to infringe then the ISPs have actual knowledge of this.

  1. If those conditions are satisfied, what are the principles to be applied in deciding whether or not to make such an order?

In order to grant a blocking order the following questions /points must be satisfied:

  1. Is the order necessary
  2. Will it be effective
  3. Will it be dissuasive
  4. It should not be unnecessarily complicated or costly
  5. It should not be a barrier to legitimate trade
  6. It must be fair and equitable and provide a fair balance
  7. It must be proportionate
  8. There must be safeguards in place to avoid abuse
  1. Applying those principles, should such orders be made in the present case?

The Judge considered the comparative importance of the rights of the parties and the justifications for interfering with those rights and granted the Order subject to some minor modifications.

Other interesting points in the case

The judgement provides a very good summary of the relative effectiveness of other ways in which the Complainants could have addressed the infringement for example by:

  1. Taking action against the operators
  2. Notice and takedown by hosts
  3. Payment freezing
  4. Domain name seizure
  5. De-indexing
  6. Customs seizure

In this particular case the judge concluded that, ‘I am not persuaded that there are alternative measures which Richemont could employ which would be equally effective, but less burdensome with the consequences that Richemont’s application should be refused alone. Nevertheless, I do accept that the availability of some of the measures… is a factor to be taken into account in the proportionality of the orders sought by Richement’ para 217.

Conclusions and comment

Unlike previous cases which dealt with copyright where the orders have been open ended, this decision set out a time limit for the blocking orders of 2 years.

This decision is clearly of great benefit to trade mark rights holders in their continual efforts to protect their brands and the challenges they face when trying to deal with counterfeiters on line.

It is likely that this case will lead to more companies seeking blocking orders in order to stop counterfeit sales on line.