UK: ISPs Ordered To Block Websites Committing Trade Mark Infringement

Last Updated: 5 November 2014
Article by Michael Gardner

High Court acts to protect "CARTIER" brand

In what represents a landmark decision, the High Court has granted an injunction in favour of luxury brand owner Richemont, which requires various ISPs to block access to a number of websites (Cartier International AG & Ors v British Sky Broadcasting & Ors 2014 EWHC 3354 (Ch)).  The novel factor in this decision is that the injunction was granted to protect against the infringement of trade mark rights, rather than copyright.

Background

There has long been specific provision in English law which enables copyright owners to seek injunctions against ISPs to block or restrict access to sites that infringe copyright.  These powers, contained in s97A of the Copyright Designs & Patents Act 1988 ("CDPA") have been used on a number of occasions in the UK – chiefly to stop illegal file sharing of music and films via the internet.   There is at least some evidence that the orders have had a degree of success in reducing the amount of illegally downloaded and shared material.

However, in contrast to the powers expressly set out in the CDPA, there is no specific equivalent provision in the UK's domestic trade mark legislation,  the Trade Marks Act 1994 ("the TMA").  Nor are such measures specified in the Enforcement (Intellectual Property etc) Regulations 2006 ("the Regulations") which were introduced in the UK in response to an earlier EU Directive to beef up the remedies available to IP rights holders.

In the Richemont case, the claimants sought injunctions against Sky and the other main ISPs on the basis that injunctions were needed to help crack down on the activities of various websites that were selling counterfeit and infringing goods under the "Cartier" trade mark.

With one possible exception in a Danish case, the Richemont case is believed to be the first time in the EU that anyone has obtained such relief against an ISP in a case of trade mark infringement (as opposed to a case of copyright infringement).

In a substantial judgment running to 266 paragraphs, the judge Mr Justice Arnold, had to decide firstly whether he had jurisdiction to make such an order at all (whether under domestic or EU legislation) and secondly, if he did have the right to do so, whether it was justified in the circumstances.

Was there power to make an order against ISPs in a trade mark case?

In relation to the first issue, the judge held that the English Court very clearly did have the power to impose such an injunction.

From the domestic standpoint, the judge noted that the English Court has a general and very broad jurisdiction to grant injunctive relief under section 37 of the Senior Courts Act 1981 ("the SCA").  This meant that it didn't matter that there was no specific power set out in the TMA.  Similarly, when parliament had implemented the EU Enforcement Directive and introduced the 2006 Regulations it appeared to be under the impression that no new laws were needed to cover the trade mark position because the power was there already.  In the circumstances, the judge felt that parliament had clearly intended that such a power should be present and since domestic legislation has to be interpreted in a manner consistent with a relevant EU Directive, the English Court needed to be able to grant such relief to trade mark owners as well as to copyright owners.

So on both bases, the English court was entitled to make orders against ISPs in trade mark cases.

In making his ruling on these points, the judge also noted the decision of the Court of Appeal in the Apple v Samsung litigation in which the Court had imposed an injunction ordering Apple to publicise the fact that it had lost its design claim against Samsung.  On that occasion, although the Regulations only provided for a situation in which a losing infringer could be ordered to publicise the result of a case, the Court of Appeal had relied upon the jurisdiction in section 37 of the SCA to make an order the other way around.  Thus, it was Apple as the losing claimant, who had to publicise the fact that their claim against Samsung had been unsuccessful.

Having decided that the Court did have the power to impose an injunction against ISPs to require them to block access to websites that infringed trade mark rights, the judge then had to weigh up various factors so as to decide whether or not he should exercise that power.

Was an injunction appropriate?

The judge considered a number of different factors in weighing up the pros and cons of making the orders sought by Richemont.

For example, he considered whether or not they had done enough themselves to try and stop the infringing activity, through the use of legal action or by writing to the internet hosting companies through whom the infringers' websites were operated.    He appeared to accept that these measures had their limitations.

Other significant factors were the costs that would be borne by the ISPs to introduce the blocking of the sites – both immediately and in the longer term – and the impact on innocent users who might be inconvenienced by the making of such injunctions.  There was also the proportionality factor – was the relief sought "proportionate" in all the circumstances?

Ultimately (though not, he admitted, without hesitation) the judge came down on the side of granting the injunctions sought.  However, he also imposed some further conditions before doing so.

These were that first, the ISPs needed to set up the blocking so that where someone tried to access one of the affected websites, they were met with a notice explaining what had happened and giving that person the right to apply to the Court for the order to be varied or set aside.

Secondly, provision was to be made for the ISP's subscribers to apply to set aside or vary the injunction.

Thirdly, he was of the view that the injunctions should be in place for an initial period of 2 years and that it was up to the rights owners to apply before the expiry of that date if they wanted a longer injunction and the ISPs to make representations at that point if they wished it to be lifted.  The duration of any such "sunset clause" will be dealt with at a further hearing if agreement is not reached between the parties.

Conclusion

The internet is used on a daily basis as a means of advertising and selling a vast amount of counterfeit merchandise which damages the IP rights of brand owners.   The fact that the Court has shown itself willing to come to their aid in this way is encouraging for the brand owners affected.  It demonstrates that the Court accepts the difficulties rights holders face in combating this activity – and the limitations that more usual types of enforcement can have in practice.

The judgment also contains very useful guidance for both ISPs and brand owners as to the factors the Court will weigh up when dealing with such applications.

However, for the ISPs, this represents an unwelcome extension of use of blocking orders and another headache for them in terms of administrative time and cost.  Although the Court considered that the costs of compliance had to be viewed as an overhead of running such a business, there must be a concern among ISPs that the Richemont decision may pave the way for a flood of similar applications from other brand owners.  For that reason alone, it is possible that they will seek to appeal the ruling, if only to delay the inevitable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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