Don’t shoot the messenger: Should internet service providers police counterfeit websites?

23rd Oct 2014

In the fight to crack down on counterfeit goods and fake websites, are internet service providers (ISPs) accountable? A new ruling last Friday by the High Court of England & Wales is likely to become a landmark case for luxury brands and consumers, after Justice Richard Arnold ruled that ISPs, also known as “intermediaries whose services are used by a third party to infringe an intellectual property right”, should police trademark infringement at scale.

The case was brought by Richemont/Cartier, a luxury holdings groups who demands that the UK’s five major ISPs- BskyB, BT, EE, TalkTalk and VirginMedia, block a number of websites attempting to sell branded fake versions of its luxury goods.
In support of his ruling, the judge pointed out that ISPs already block child abuse images and enable parental control of websites they host, so already have the infrastructure in place to block counterfeit websites.

As drastic as it sounds to align child abuse to fake watches and handbags, the counterfeit industry is one rife with allegations against human rights and cases of child labour, as well as being as unwieldy as it is, in many instances, lawless. But is the sale of counterfeit goods really the responsibility of the internet servers? Can this ruling apply to online retailing and the increasingly sophisticated fake websites that pop up every day, or is it down to the consumer and defending brands to ensure production and sale of fake products is as difficult as possible? My-Retail Media’s Kirsty Simmonds and guest contributor Jack McGruer looked at the case for and against handing so much responsibility to parties that are essentially just the messengers.

"The beginning of a sea change"
Kirsty Simmonds, arguing for the ruling

It is heartening that something is finally being done to deter the sale of counterfeit luxury goods online. Producing and selling counterfeit products is a process fraught with crime, human rights abuses (what are the chances a knock-off Chanel 2.55 was manufactured in a fully-licensed and regulated factory, like its genuine counterpart?) and untold court cases (if they're lucky) for the brands themselves.

Handing BSkyB, BT, EE, TalkTalk and Virgin Media the task of policing trademark infringement does seem like an unusual approach – granted – but hopefully, with their newly-bolstered powers to issue 'blocking injunctions', less consumers will be duped into thinking they are buying the genuine article, and brands will be able to redirect time and money which is currently spent on court cases to research and development, and better design.

The landmark case, which was brought by luxury brands within the Richemont/Cartier group, demanded that the aforementioned service providers block six websites selling fake versions of their products. Richemont has since stated these were the first of 239,000 crackdowns of potentially infringing sites.
Hopefully this is the beginning of a sea change which levels the playing field for brands and consumers alike.

"A gateway ruling for the persecution of legitimate retailers?"
Jack McGruer, arguing against

The primary issue with this ruling is a shift in focus away from copyable data and onto the – in this instance, at least - vaguer realm of trademarks. Previously, ISPs had bowed to political pressure by blocking access to websites which were sources of or provided access to data such as images of child abuse or pirated versions of copyrighted material.

In terms of access, I think it’s fair to ask ISPs not to be conduits for the transmission of illegal materials, whatever they are deemed to be in the law of the land. ISPs blocking access to these sites was a viable and simple manner in which to achieve this and the proliferation of the access to child abuse imagery at the very least was something that needed a swift and effective response.

The debate around the action at the time contained some arguments against it that pointed to a precedent being set for a future extension of blocking and these fears seem to have been vindicated by this ruling. With the ISPs’ establishment of an infrastructure that allows for the blanket removal of access to blacklisted sites, the scope increases for how a brand might bring forward a case against any site deemed to be offering “trademark infringing” material.

A hypothetical; company A – a large, multinational consumer goods manufacturer – presents a case against company B – a small, independent online retailer – alleging infringement of a trademark. At the time of presenting the case, the representatives of company A move to impose an injunction against accessing the online retailer’s site on a temporary basis, until a ruling has been passed on the case.

Although the probability of such an injunction being successful is up for debate, the mere possibility that a party may use such an injunction to disrupt another’s revenue stream is enough to question the validity of this ruling and the precedent it sets for the future. Smaller retailers everywhere are open to having their legitimacy questioned and found wanting, irrespective of intent.

The responsibility of protecting a brand’s integrity begins and ends with the brand itself and it speaks to me of the way in which larger companies despair at the ever-developing paradigm of online commerce, best described by Google’s Joe Kraus: “The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers.” For now, this ruling represents a blow for genuine counterfeiters, but later, we may see it as a gateway ruling for the persecution of legitimate retailers.

Kirsty Simmonds, Jack McGruer, Ava Szajna

My-Retail Media

In Remembrance: The astonishing career of Oscar de la Renta

21st Oct 2014

Few designers could evoke the outpour of affection and respect from the fashion industry that arrived this morning alongside the news of Oscar de la Renta’s death. Having proved a worthy match to the cancer he fought since 2006, the revered fashion designer passed away in his home in Kent, Connecticut, this week, due to complications from his battle with the disease. Born Óscar Arístides de la Renta Fiallo in the Dominican Republic in 1932, the artist left his home country to travel to Spain at 18.

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John Lewis, Zalando and House of Fraser examine what the future of retailing means to them at #IRC14

15th Oct 2014

They may be giants in their own respective fields, but John Lewis, House of Fraser and Zalando all agreed on one thing yesterday: no one can be sure what the future of retailing holds, even for the big guns. Back in 2008, you’d be hard-pushed to find some common ground between House of Fraser and Zalando.

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House of Fraser tops the e-commerce charts the second year running

13th Oct 2014

“Strategic multichannel consultancy” Practicology have just carried out their third Website Usability Report, which rates 25 UK e-commerce sites on fulfilment choices, site performance and user experience. This year House of Fraser ranked extremely positively, and was the only brand to maintain it's position from last year.

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John Galliano at Margiela: why he's the perfect choice

9th Oct 2014

Three years since he was banished from the fashion world after a nasty and highly publicised anti-Semitic rant brought about his spectacular fall from grace, John Galliano is about to make a comeback. The flamboyant pariah has been appointed Creative Director of Maison Martin Margiela- a brand known for its stripped-back, utilitarian image. Galliano, renowned for his dramatic Dior couture creations and his penchant for closing shows dressed as a pirate, strikes one as a surprising choice.

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From the weekend: Protests add fuel to fire for Hong Kong’s embattled luxury retailers

6th Oct 2014

‘How do you solve a problem like China’ has been on the mind of foreign luxury retailers for some time. With the shift in consumer behaviour from ostentatious European luxury labels to a focus on more subtle forms of consumption, the slowdown in sales has hit mega brands like Prada and Gucci while they’re down.

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Omni-channel or overwhelming?

30th Sep 2014

The future of retail marketing is here, and it’s omni-channel. Namely, a stronger focus put upon the customer experience – their satisfaction and engagement with the brand, through a variety of channels. How successfully this is carried out is down to the marketers.

The creation of new technology has pushed the boundaries of retail and e-commerce far beyond a simple website, now the marketing concepts of Place and Promotion are more evident through personalised banners on devices and micro-location offers. With this new creative capacity, however, comes greater opportunity for error.

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Tesco's £250m accounting error and why the worst is yet to come

24th Sep 2014

If the post-crash retail landscape has taught us anything, it's the old Darwinian trope that you must evolve or die. Before the global financial markets came to a screeching halt in 2008 there were far fewer, far larger monopoly-style businesses exacting a well-honed strangehold on the retail industry, and none was larger or more monopolistic than Tesco. From the mid-1990s up to 2006 Tesco went from snapping at Sainsbury's heels to laying claim to a third of the market. When Tesco was taking approximately £1 in every £8 that British consumers were spending, former CEO Sir Terry Leahy quipped that this left another £7 for the supermarket to go for - such was the confidence of a man who saw the business through its golden period. But now the landscape has changed; there is a definite 'squeezed middle' in the supermarket sector, with Waitrose sitting to one end of the spectrum with its affluent customer base, and the increasingly-popular discounters – think Aldi or Lidl – are at the opposite end, happily picking up austerity-hit customers who once did their shopping at Tesco, Sainsbury's or Asda.

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From the weekend: Fashion retail's new frontiers

22nd Sep 2014

Whether it’s London catwalk show for a high street staple, a new shopping hub north of the Watford Gap or the fashion industry’s tempestuous relationship with its foreign consumers, the weekend was full of talk of new frontiers for retailers, and their battle to gain ground.
Fresh off the back of London Fashion Week, Marks & Spencer hosted its own AW14 presentation at Vodafone London Fashion Weekend. Filling its runway with highlights from its autumn winter collection this year and its front row with familiar celebrities and stylists, M&S is clearly keen to inch into a more fashionable circle.

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IKEA launch budget "Moxy" hotel chain in Milan

19th Sep 2014

IKEA has made the move into the hospitality sector in a big way by opening its first ever budget hotel in Milan. Word is that locations in Antwerp, Brussels and Ghent are also on the cards in the near future though ideal locations have yet to be found.

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