Ireland: English Court Requires ISPs To Block Websites Selling Counterfeit Goods

Last Updated: 17 November 2014
Article by Rob Corbet and Richard Willis

In a landmark judgment, the English High Court has ordered the UK's main internet service providers (ISPs) to block access to websites selling counterfeit goods.

In recent years, the English courts (and indeed the Irish courts) have granted a series of orders requiring ISPs to block access to filesharing websites, such as The Pirate Bay, which infringed copyright. However, this is the first time in which a court in an EU member state has made a blocking order in an effort to combat trade mark infringement.

BACKGROUND

The Richemont Group, which owns several of the world's leading luxury brands, including Cartier, Mont Blanc and IWC, applied to the English High Court for orders requiring the UK's main ISPs to block access to six websites (referred to as "the Target Websites") which advertised and sold counterfeit Cartier, Mont Blanc or IWC goods.

THRESHOLD CONDITIONS

Arnold J noted that despite the absence of an express power to grant injunctions under the UK Trade Marks Act (in contrast with UK copyright legislation), the courts have a general power to grant injunctions where the circumstances of a case so require. This power is not restricted to granting an injunction against the person actually infringing the right in question.

Arnold J stated that, as with copyright infringement cases, certain 'threshold conditions' must be met before a website blocking order can be granted in a trade mark infringement case:

  • the ISPs must be intermediaries within the meaning of the EU Directive on the enforcement of intellectual property rights ("the Enforcement Directive");
  • either the users and/or the operators of the websites in question must be infringing the claimant's trade marks;
  • they must be using the services of the ISPs to do this; and
  • the ISPs must have actual knowledge of this.

Each of the above conditions was satisfied in this case.

PRINCIPLES TO BE APPLIED

The EU Enforcement Directive requires that measures adopted by member states to enforce intellectual property rights be proportionate. In finding that the blocking orders sought would be proportionate in the circumstances of the case, Arnold J had regard to the following:

  • Justification for interfering with the rights engaged: Arnold J weighed up the competing rights of the parties involved as follows: (i) Richemont had a legitimate interest in restricting the Target Websites from infringing its trade marks; (ii) the ISPs' freedom to carry on business would not be interfered with and nor would they be required to acquire new technology as they already have the requisite technology in place; (iii) the operators of the Target Websites had no rights which required protection as they appeared to be exclusively engaged in infringing commercial activity; and (iv) the users of the ISPs' services would not be adversely affected if the orders were properly targeted and had sufficient safeguards built into them (see below).
  • Availability of alternative measures: Arnold J was not satisfied that the alternative measures open to Richemont (e.g. domain name seizure, customs seizure and de-indexing from Google searches) would be as effective as blocking orders.
  • Efficacy: Arnold J referred to evidence which showed that the blocking of websites in copyright infringement cases had proved reasonably effective in reducing the use of those websites in the UK. He stated that there was no reason to believe that blocking would be materially less effective in reducing UK traffic to the Target Websites. In fact, it could possibly be more effective as the evidence suggested that consumers have little "brand loyalty" to the Target Websites, whereas websites like The Pirate Bay had quite a loyal user base.
  • Dissuasiveness: Arnold J was satisfied that the orders sought would have some dissuasive value since users would not only be blocked from accessing the Target Websites, but would also be informed of the reason for this. »» Cost: Arnold J noted that each of the ISPs had already invested in blocking technology in order to comply with blocking orders in copyright infringement and other cases. Further, the ISPs would not necessarily have to bear the costs of implementing the orders, but could pass them on to consumers in the form of higher subscription charges.
  • Impact on lawful users: Arnold J was satisfied that it would be possible to target the blocking in such a way so as not to adversely affect those who use the ISPs' services lawfully. SAFEGUARDS AGAINST ABUSE Mindful of the requirement in the EU Enforcement Directive that remedies in intellectual property infringement cases include safeguards to protect against abuse, Arnold J indicated that he would include provision for the following in his final orders: »» permission for (i) the ISPs, (ii) the Target Websites (who were not involved in the application), and (iii) subscribers to the ISPs' services to apply to court to discharge or vary the orders;
  • a statement to be included on the page displayed to users who attempt to access the blocked websites explaining that access to the website has been blocked by court order, identifying the party who obtained the order, and advising that affected users have the right to apply to court to vary or discharge the order; and
  • a 'sunset clause' to provide that the orders will cease to have effect at the end of a certain period unless (i) the ISPs consent to the orders being continued; or (ii) the Court orders that they should be continued.

COMMENTARY

The judgment of Arnold J will provide some comfort to brand owners who are seeking to protect their brand, reputation and the exclusivity of their goods. The case brought by Richemont was a test case and applications by other brand owners, both in the UK and across the EU, are likely to follow. Indeed, Richemont envisages further actions and has identified 239,000 potentially infringing websites, 46,000 of which have been confirmed as infringing.

An Irish court would be likely to consider the decision in Richemont as persuasive authority in terms of the protection of intellectual property. The decision mirrors a line of Irish High Court jurisprudence in cases such as EMI v UPC & Ors and EMI & Ors v UPC & Ors, where the Court displayed a willingness to protect intellectual property rights and grant orders requiring ISPs to block websites infringing copyright. It is likely that a similar rationale would apply in the case of online counterfeit cases based on trade mark infringement.

A recent report published by the EU Commission noted that in 2013 EU customs authorities seized a total of 35.9 million counterfeit articles, representing a market value of €768 million.

It is also worth noting that the recent adoption of EU Council Regulation No 608 of 2013, which allows for the destruction and detention of counterfeit goods by customs, means the remedies available to address online counterfeiting of goods have never been stronger.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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