LONDON - Media, Technology and IP law firm Wiggin successfully represented Richemont (owner of brands Cartier, Montblanc and IWC) in the appeal brought by Sky, BT, EE, TalkTalk and Virgin Media.
The five UK Internet Service Providers (ISPs) challenged a High Court ruling (delivered in 2014) that trade mark owners can obtain orders requiring ISPs to block access to websites selling counterfeit goods online.
Wiggin IP Partner and INCOPRO co-founder and CEO, Simon Baggs commented:
"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. Site blocking has been very effective in the copyright context. A study by INCOPRO identified a drop in usage of over 75% for blocked sites that infringe copyright."
The ISPs argued that the court could not order site blocking, contending that the law in the UK did not specifically allow for this. They also submitted that it was not proportionate to block counterfeit selling websites, primarily because they are not heavily used (in contrast to copyright infringing websites) and that they should not bear the cost of imposing blocking using their systems. The Court of Appeal disagreed and confirmed the High Court's decision. The Court of Appeal held that the activities of the websites in issue and other online counterfeiters caused significant damage to Richemont and that blocking these sites would likely be highly effective. The Court concluded 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 in relation to the grant of injunctions where it is necessary and appropriate to do so to avoid injustice…"
The judgment is the first from a senior court in the UK and mainland Europe on this important issue. The two key impacts are:
(1) The judgment paves the way for trade mark owners to tackle sites selling counterfeit goods in a way that is cost efficient and adaptable to evasion by the counterfeiters – the process enables trade mark owners to track changes and movements in counterfeit selling websites and respond to those movements by updating the ISP blocks.
INCOPRO (a company created by Wiggin) tracks movements in blocked websites using its BlockWatch system. This system enables site blocks to be updated quickly, so ensuring blocks have maximum impact.
The sale of counterfeit products online is a growing problem for the global economy. As brands use the Internet to reach consumers, counterfeiters are offering fake products, relying on Internet anonymity and remote locations as platforms for trade. A recent study by the OECD and the EU Intellectual Property Office shows that international trade in counterfeit and pirated products had reached a value of US $ 461 billion by 2013.
(2) The finding that the court can make orders against Internet intermediaries based on the established power of the courts also paves the way for site blocking injunctions in other contexts. For example, it may be possible to secure blocks against websites that are publishing defamatory content or confidential information.
Wiggin's IP group has represented IP businesses in many of the most significant and precedent setting litigation actions in the UK. The firm guided the US film studios in the high profile Newzbin case. In 2015, Wiggin was named “Copyright Firm of the Year” by Managing Intellectual Property Magazine and won the Financial Times Innovative Lawyer Award as the most innovative firm in Intellectual Property. Baggs was identified by the FT as one of the top 10 legal innovators in the UK. In June 2016, the firm won the Legal Week Innovation, Future of Legal Services Award for its role in creating INCOPRO.
Representing the Appellants:
Charlotte May QC, Jaani Riordan, 8 New Square
Instructed by Reed Smith LLP
Representing the Respondents:
Adrian Speck QC, 8 New Square
Benet Brandreth, 11 South Sqaure
Instructed by Wiggin LLP