15 July 2015 6 min read

On Thursday last week the internationally renowned jeweller and watch-maker, Cartier, launched a new claim at the High Court in London. This claim, however, is not your usual commercial claim. Unlike previous litigation which Cartier has been involved in: copyright infringement, trade mark infringement, and contractual disputes (etc), this case centres around liability for those that enable or facilitate the selling of counterfeit goods by hosting their websites or profiles. As this encompasses just about any and every online retailer it’s perhaps unsurprising, then, that this has ruffled a few feathers in the business community.

How is this lawsuit different to any other?

A good question, indeed. Essentially the key issue here is that Cartier (and, should Cartier win the case, any other owner of any other registered trademark) will be able to compel Internet Service Providers (ISP’s) to close down or make attempts to close down websites which feature pirated trade marks. These are currently known as blocking orders and are fairly rare, generally only being ordered for the most notorious of pirate websites (one example is the infamous ‘thepiratebay’ website – not that we’d recommend it, but if you were to try accessing that website now, your ISP would probably block it).

This case has the potential to be a game-changer as it could place an incredibly high burden on online retailers to ensure that all sellers are genuine and are not infringing (or pirating) registered trademarks without the consent of the trademark owner

For example, take a seller who is selling counterfeit Cartier watches on Amazon. Currently, if the seller was reported, his account would be blocked, he or she would be reported and possibly, sued by the trademark owner. If Cartier wins its case, under the new powers, Cartier would (in theory) be able to mandate Internet Service Providers (ISP’s) to shut down part of Amazon until the infringing pages had been removed. The ramifications for online retailers are therefore potentially gigantic.

What does this mean for business owners?

Although it’s unlikely to ever occur on a scale of ‘Amaznon’ size, the Cartier case does raise serious questions about how far intellectual property rights are being extended. For trademark owners this means making the most of your rights and policing counterfeit sellers, for online retailers this means being vigilant in respect of counterfeit sellers.

If you’re an online retailer selling branded products, you should certainly start thinking about how you would deal with a complaint from a trademark owner. Do you have a reporting system on the website which allows manufacturers to get in touch with you to report suspected counterfeit products? Do you have safeguards in place that deter sellers of counterfeit products and, perhaps most importantly, do you have a system that allows you to take down counterfeit products / counterfeit seller profiles almost instantaneously once reported?

On the other hand, if you’re the owner (or prospective owner) of a registered trademark, are you actively policing your trademark and looking for counterfeiters? If not, then why not? It’s important to realise that apart from taking your sales, having counterfeit (and usually, substandard quality) goods on the market is likely to tarnish your brand name and, as a result, cause you further financial losses.

I’m an online retailer – what’s the one thing I should take from this?

As I mentioned before; the key to keeping your business out of trouble is by being vigilant and being proactive. Don’t wait for your first letter from a company’s in-house lawyer before you start thinking about how to shut down specific sellers or remove content from your website. Be proactive. Develop a policy in advance so that you’re ready to spring into action if the unthinkable happens and you receive a (not so) friendly letter from a company’s in-house lawyers demanding that you stop selling certain items which have been identified as counterfeit.

In short, you need to be proactive to stay one step ahead of those ‘Knock-Off Nigels’.

Hybrid Legal are experts in the field of Intellectual Property and E-Commerce law. If you’re a small, medium or large business seeking legal advice in relation to your existing (or future) Intellectual Property or E-Commerce business, we’d be delighted to chat with you and see how we can assist you to strengthen your business. Call on 0333 014 4568.

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Ryan Lisk

Ryan has helped a vast number of businesses protect and control their intellectual property as well as drafting and advising on consumer and commercial contracts.

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