LONDON — Now Internet service providers are in luxury brands’ crosshairs over counterfeits.
This story first appeared in the October 20, 2014 issue of WWD. Subscribe Today.
Compagnie Financière Richemont has struck a major blow against online counterfeiters by winning a U.K. court order that demands British ISPs block access to specific Web sites selling fakes. The Honorable Mr. Justice Arnold’s first-of-its-kind judgment was handed down at London’s high court on Friday. It stipulated that five British ISPs — BT, B Sky B, Everything Everywhere, Talk Talk and Virgin Media — block access to the rogue Web sites, which were selling fake Cartier, Montblanc and IWC products.
The ruling means that luxury labels will be able to obtain court orders that compel ISPs to block Web sites selling fake goods.
“The English high court today provided us with a very useful tool to stop the selling of counterfeits online,” said Stanislas de Quercize, chief executive officer of Cartier International SA, who added, “This clear judgment will hopefully serve as a precedent in other countries as well.”
Jérôme Lambert, ceo of Montblanc International GmbH, said the decision will “help us deal with the onslaught of fakes being sold on Web sites.”
In a joint statement, BT, EE, Sky, Talk Talk and Virgin Media said: “We are currently considering the judgment and will not be providing any further comment at this time.”
The decision follows court action by Richemont earlier this year. The world’s second-largest luxury goods group had brought the action in response to a growing number of sophisticated sites selling fake goods — often with U.K. addresses — that regularly duped customers into believing they were legitimate.
“Over the past 18 months, we’ve seen exponential growth — a huge explosion — of this activity,” said Frederick Mostert, chief counsel at Richemont, past president of the International Trademark Association, and author of the book “From Edison to iPod, Protect Your Ideas and Make Money.”
Although the ruling doesn’t give Richemont a blanket court order to ask ISPs to take down sites selling fakes, it creates a framework for it and other luxury groups to apply for court orders to block access to the sites rather than taking action against the Web sites themselves — an arduous task since there can be hundreds of them, meaning a company must tackle each one. Brands such as Tory Burch, Coach and Ralph Lauren have been successful with that tactic, winning court cases against hundreds of cyber-squatting sites and winning damages in the millions of dollars, even though those were impossible to collect, since many of the sites were located in China. Coach, for instance, won $257 million in one case last year, under which it was able to seize 573 domain names selling fake products.
But Mostert said the decision Friday takes the battle up a notch. “The ruling will give us a cool tool that is a lot quicker and more efficient than some other methods,” he said.
Rather than taking legal action, Richemont has in the past worked in partnership with other firms such as eBay to remove fake goods for sale online. Mostert underlined that Richemont’s action did not seek to restrict “freedom of speech, freedom of expression or [control] the Internet,” but to protect the firm’s brands and customers.
Susie Middlemiss, partner at law firm Slaughter and May, said: “This case is significant, as it is the first time an Internet provider has been required to block access to Web sites in order to protect trademark rights rather than copyright,” she said.
While copyright covers areas such as music and film, trademark rights cover products. “It opens up new opportunities for brand owners protecting their genuine goods and challenges for ISPs in giving effect to the blocking,” she added.
Earlier this year the designer resale site Vestiaire Collective published the results of a study on counterfeit purchases in the online marketplace. The study showed that in 2013, about 35 percent of female online shoppers who purchased items from resale Web sites said they were unaware they had purchased at least one counterfeit designer item, while 18 percent of respondents were not sure of the validity of some of the items they bought. Some 21 percent assumed they did not make any counterfeit purchases.