The Court of Appeal has held [1] that blocking orders affecting internet service providers (ISPs) can be used to protect trade mark proprietors. In a landmark judgment delivered on 17 October last year, [2] Arnold J had ordered the defendant ISPs to block, or at least impede, access to particular websites which advertised and offered counterfeit goods bearing the claimants’ marks. This is believed to be the first occasion on which an application for a website-blocking order has been granted against an ISP in order to prevent trade mark infringement, as opposed to copyright infringement where such orders have been granted before.
The claimants are producers and retailers of luxury goods and the proprietors of well-known jewellery and watch brands, including Cartier. The websites in question advertised and sold counterfeit replicas, sometimes making clear the goods were replicas, sometimes not. The websites targeted UK consumers.
The claimants sought orders in the same format as orders previously granted in copyright cases. The Court’s jurisdiction in the copyright cases derives from section 97A of the Copyright, Designs and Patents Act 1988, which implements Article 8(3) of the Information Society Directive [3]. This says: “the High Court … shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.” There is no comparable provision in respect of trade marks, and the defendant ISPs argued that for this reason the High Court did not have the jurisdiction to make the order sought.
Arnold J took the view that the High Court did have jurisdiction to grant the blocking order. He held it had jurisdiction by virtue of section 37(1) of the Senior Courts Act 1988, which says: “the High Court may by order (whether interlocutory or final) grant an injunction … in all cases in which it appears to be just and convenient to do so.”
The Court of Appeal agreed, confirming that the UK courts have the jurisdiction to grant the website-blocking orders. It reasoned that the UK courts were obliged to apply national law, so far as possible, to achieve the purpose of Article 11 of the Enforcement Directive [4], which states: “Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right”. The Court of Appeal went on to confirm that section 37(1) of the Senior Courts Act could be applied to this end.
The Court of Appeal also set out the threshold requirements to be met before the Court will grant an order for a website blocking injunction:
- the ISPs must be intermediaries;
- the operators of the target websites must be infringing the trade marks;
- the operators of the target websites must be using the ISPs’ services to infringe; and
- the ISPs must have knowledge of this.
With regard to “knowledge”, this must be actual; the ISP in question must have been notified of the infringing use. In this case, the ISPs had been notified ahead of the application by way of an email attaching schedules of the trade marks and records detailing the test purchases made from the infringing websites, and by the application for the orders themselves.
The Court of Appeal confirmed that the injunction must (1) be necessary; (2) be effective; (3) be dissuasive; (4) not be unnecessarily complicated or costly; (5) avoid legitimate barriers to trade; (6) be fair and equitable and strike a fair balance between the applicable fundamental rights; and (7) be proportionate.
Perhaps the most contentious question before the Court of Appeal was as to who should bear the burden of the costs of implementing the blocking order. The ISPs argued that this should be borne by the rightholders. The Court disagreed (although Briggs LJ dissented, stating that in his opinion the rightholder should bear the cost), explaining that “intermediaries make profits from the services which the operators of target websites use to infringe the intellectual property rights of the rightholders, and the costs of implementing the order can therefore be regarded as a cost of carrying on the business”.
The judgment develops the existing law but the development is a logical one, bringing the position in respect of trade marks into line with the copyright position. The concern for ISPs is that the case may open the floodgates to applications from trade mark owners seeking blocking orders to infringing websites and of the costs implications that this will entail.
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[1] Cartier International AG and another v British Sky Broadcasting Ltd and another [2016] EWCA Civ 658
[2] [2014] EWHC 3354 (Ch)
[3] Directive 2001/29/EC
[4] Directive 2004/48/EC
