Fake news – using IP to combat online scams and luxury fashion good counterfeits

4 Nov 2021 , 12:09pm

Website blocking orders are among the available legal remedies to help brands fight back against counterfeiting, according to AA Thornton

Online scams have surged since the start of the Covid-19 pandemic, with luxury brands having to deal with an increase in digital platforms that are selling counterfeit goods.
 
There are, however, a number of legal remedies for brands to pursue in their battle to get ahead of counterfeiters, Geoff Hussey, head of litigation at specialist IP firm AA Thornton told a workshop at the recent Luxury Law Summit.
 
For brands that want to remove offending websites quickly and cheaply – and where there is no way to trace the website operator – a fast-track solution is to go directly to the website host or domain registrar, Hussey told delegates at the summit, which was held at The British Museum on 22 September. This is because in almost all cases the website operator will be in breach of contract.
 
Hussey added: “You need to alert website hosts and domain name registrars  of the infringing material in a nice way because actually what you want to do is develop a relationship with these providers so they’re on your side.” 

Website blocking orders

This solution, however, isn’t as robust as a website blocking order because the offending websites can simply pop up again using a different host or registrar for its domain name, which can end up in a game of whack-a-mole, Hussey warned.
 
To go down the website blocking route – which is typically more expensive – means targeting the internet service providers (ISPs) and preventing the infringing content from being accessible within the jurisdiction. “The advantage of that is there are relatively few ISPs, so they are easy to identify – around six service providers make up about 95% of the internet traffic in the UK,” said Hussey.
 
The other advantage of targeting ISPs directly is that they respect the authority and jurisdiction of the court, so the achieved remedy will work, he explained.

Around six service providers make up about 95% of the internet traffic in the UK

Delegates at the workshop – entitled Fake News: Using IP to Effectively Combat Online Celebrity Endorsement Scams and Luxury Fashion Good Counterfeits – heard that the legal basis for attaching any claim to the ISPs is well defined in statute in the UK. 
 
Section 97A of the Copyright, Designs and Patents Act 1988, was derived from the EU’s InfoSoc Directive and gives the court the power to grant an injunction against a service provider which has knowledge of someone using its service to infringe copyright. While there is no similar equivalent legislation specific to other rights – such as trademark infringement – there is a general provision under section 37 of the Senior Courts Act which effectively allows the High Court to grant an injunction.

Cartier vs BskyB
 
The first trademark case under this provision was Cartier vs BskyB in 2014 involving a website selling fake Cartier and Mont Blanc goods.
 
Hussey said: “In that case there was a website blocking order made, and after that case, there were some further websites that were identified – the procedure to get the website blocking order expanded to these additional websites was routine, there was a very short application, a very short hearing and a very short judgment that just effectively added those new websites and asked the ISPs to cut access and make sure those new websites weren’t visible to the public.”
 
While the rights holder that brings the action is responsible for paying for the action, orders to pay the ISPs’ legal expenses are not usually relevant because ISPs typically sit back and let the courts decide on these cases. However, rights holders do have to pay the usually modest implementation costs of the ISPs in blocking the websites in question.

Spin Master vs PMS
 
For potential infringements on e-commerce platforms, brands can seek takedown notices that will prevent the infringing product from being sold. But there can be potential risks to this approach if the brand then takes action to sue the infringer in court, said Hussey. 

Take the case of Spin Master vs PMS. Spin Master claimed PMS had infringed a registered design for its Bunchems toy line. Spin Master had invoked a number of takedown notices on Amazon and other marketplaces against the resellers of PMS’s infringing toy line, Clingabees. Spin Master filed a claim against PMS for design infringement, but PMS counterclaimed for damages on the basis that it was a party aggrieved by the marketplace takedowns, which constituted threats of infringement.  
 
“That gave PMS some leverage and applied some risk to Spin Master.  This assisted in bringing the parties  to the table and the case settled amicably representing a better position for PMS than would have been the case had they just been found to infringe,” said Hussey, who represented PMS in the case. 
 
“The moral from that story is that while those takedown procedures are very powerful, if you’re potentially also going to take action to sue for infringement in cases where the merits are not completely certain, it can backfire as it can enable the infringer to come with a counterclaim for threats just to assert some leverage and try and get out of their sticky hole.”

Geoff Hussey is head of litigation at AA Thornton