Member Article

Big win for big brands

Owners and operators of retail sites in Southampton are at risk of legal action if they allow counterfeit goods to be sold on their sites, warn lawyers at Clarke Willmott LLP.

The warning follows leading fashion brands including Tommy Hilfiger, Burberry and Lacoste winning an appeal in a landmark case relating to the sale of counterfeit products.

The Court of Justice of the European Union (CJEU) has strengthened the armoury available to brand owners in the fight against counterfeit products in physical market places after ruling that injunctions can be brought against those who let retail space to traders who sell counterfeit goods.

The decision comes after a case was brought by several big name fashion brands against Delta Center who operate a marketplace in Prague, Czech Republic, in order to prevent them from letting retail space to traders selling counterfeit goods which infringed on the brands’ intellectual property rights.

The court held that retail space operators, such as Delta Center, are intermediaries whose services could be used by a third party to infringe an intellectual property right. As a result an injunction could be issued in the same way as it could be issued against an online intermediary.

Paul Cox, partner in the intellectual property team at Clarke Willmott LLP, said “This is consistent with an earlier criminal case in the UK involving Wendy Fairs, where the directors of the company operating a market were found guilty for dealing with the proceeds of crime by taking rents from tenants who were selling counterfeit goods, although the conviction was overturned by the Court of Appeal on a technicality.

“Presently, brand owners have been relying on civil action against the traders themselves and criminal action brought by Trading Standards against those traders.

“However, given the costs involved, the itinerant nature of the traders and the limited resources of Trading Standards, the latest development will be welcomed by brand owners as it will help them clear marketplaces of counterfeit products. It means that retail property owners and market operators need to be vigilant about what is sold on their premises as they will no longer be able to turn a “blind-eye” to traders selling counterfeit goods.”

This was posted in Bdaily's Members' News section by Clarke Willmott .