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UK Supreme Court Rules in Landmark Trade Mark Infringement Case

On 13 June 2018, the UK Supreme Court handed down its long-awaited judgment in the Richemont litigation, holding that where rights holders obtain an order for internet service providers (ISPs) to implement a website-blocking order, the rights holders should indemnify the ISPs in respect of the ISPs’ reasonable costs of compliance (Cartier International AG and others (Respondents) v British Telecommunications Plc and another [2018] UKSC 28).

The Supreme Court’s judgment marks the latest and final determination in a series of decisions dating back to 2014, confirming that ISPs may be ordered by the UK Courts to implement website-blocking orders to prevent trade mark infringement.

In the first-instance proceedings, the Claimants (Cartier, Montblanc and Richemont), which design, manufacture and sell luxury goods under the well-known trade marks CARTIER, MONTBLANC, IWC (and other brands), were successful in obtaining an injunction against five of the UK’s leading ISPs (Sky, BT, EE, TalkTalk, and Virgin), requiring the ISPs to block or attempt to block access to specified websites which were advertising and selling counterfeit copies of the Claimants’ goods. This also included various other internet addresses whose purpose was to enable access to such websites. Importantly, the first-instance judge ordered the ISPs to pay the costs of the proceedings, as well as the costs for implementing the website-blocking orders.

This was a landmark decision, as it was the first time that the UK Courts had held that a website-blocking order may be used to prevent trade mark infringement, and such relief had only previously been granted by the courts in order to prevent copyright infringement.

The first-instance decision was reaffirmed in a further action between the parties, and confirmed by the Court of Appeal in 2016. Two of the five ISPs then appealed to the Supreme Court with respect to the order to pay for the costs of the proceedings and for implementing the website-blocking orders.

The Supreme Court has now unanimously confirmed that, where rights holders obtain an order that ISPs should block access to certain websites, the rights holders should indemnify the ISPs in respect of the ISPs’ costs of compliance with the order. As regards the costs of the litigation, the Supreme Court found that the judge at first-instance had been entitled to award costs against the ISPs as, somewhat unusually, the ISPs had made the litigation a test case and had strenuously resisted the application.

The Supreme Court’s decision will come as a disappointment to brand owners, as the costs of indemnifying ISPs for the costs of implementing blocking orders are likely to be high. However, the Supreme Court’s decision does not change the fact that brand owners now have at their disposal an important tool with which to tackle effectively the online sale of counterfeit goods.

Whether the Supreme Court’s latest decision will impact blocking orders sought for reasons other than the prevention of trade mark infringement remains to be seen. For example, the current case law with respect to cases involving blocking orders for the prevention of copyright infringement establishes that ISPs must pay the costs of implementation of any injunction ordered by the Courts, while rights holders bear the costs of the application. It is too early to assess whether the Supreme Court’s judgment will lead to this principle (and potentially others) being revised for copyright cases, but there is now scope for debate that a similar principle should be applied to blocking orders in respect of other intellectual property rights.

For more information about trade marks or how to protect your brand from the threat of online counterfeit sales, please contact Daniel Ramos or Margaret Arnott.

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