In its recent decision in Entertainment One UK Ltd & Anor v Sconnect Co Ltd & Ors  EWHC 3295 (Ch), the High Court considered whether English courts could have jurisdiction in cases involving intellectual property infringements on internationally accessible internet platforms.
The First Claimant, Entertainment One, is the owner of Peppa Pig, the animated children's TV series featuring the eponymous anthropomorphic pig and her family. The Second Claimant is the company formed by the creators of the character.
In 2018, an animated series called Wolfoo featuring an anthropomorphic wolf and his family debuted on YouTube. The First Defendant, a Vietnamese studio known as Sconnect Co Ltd, and Second Defendant, US company Sconnect Media LLC, admitted responsibility for creating the Wolfoo series and uploading them to YouTube.
The Claimants' substantive claims against the Defendants were for alleged:
- Infringement of copyright in i) the Claimants' artistic works (being the visual representations of the Peppa Pig character and the scenery and backgrounds to each episode), and ii) the Claimants' audio clips repeated in Peppa Pig episodes;
- Infringement of the Claimants' three UK registered trade marks and three EU registered trade marks for PEPPA PIG word marks and various PEPPA PIG device marks registered in Classes 9 and/or 41; and
- Passing off in relation to use by the Defendants of elements that copied or mimicked the Peppa Pig indicia, so as to deceive the average consumer into thinking that Wolfoo comes from the same commercial source as Peppa Pig or is otherwise commercially connected with the makers of Peppa Pig.
However, this decision related to two interim applications - one by the Defendants, and one by the Claimants. The focus of this article is the Defendants' application for a declaration that the English court had no jurisdiction to try the claims brought against the Defendants; alternatively, the court should not exercise any jurisdiction which it may have. The stated reasons for the declaration were (i) "the service is defective"; and (ii) "the Defendants do not target the UK market". Of particular interest is the question of whether the Defendants had targeted the UK market.
The law on targeting
Intellectual property rights are territorial in nature. As such, in order to establish infringement of such rights in the UK, it is necessary to demonstrate that the alleged infringing acts took place in the UK. This can be difficult in cases where the infringing acts take place on internet platforms that are accessible internationally.
In such a case, the test for determining whether the English courts have jurisdiction to decide an IP infringement action is whether the alleged infringer has "targeted" the jurisdiction where the intellectual property is protected.
The law on targeting has been recently discussed in Lifestyle Equities CV v Amazon UK Services Ltd  EWCA Civ 552 paragraphs 44-46, and points to be considered can be summarised as follows:
- The mere fact that a website is accessible from the UK is not a sufficient basis for concluding that an advertisement displayed there is targeted at consumers in the UK.
- When considering the issue of targeting objectively from the perspective of average consumers in the UK, would those average consumers consider that the advertisement is targeted at them?
- The court must carry out an evaluation of all the relevant circumstances. These may include any clear expressions of an intention to solicit custom in the UK, such as: including the UK in a list or map of the geographic areas to which the trader is willing to dispatch its products, the currency in which prices are listed, and the dialling codes of any customer service numbers provided.
Submissions of the parties
The Defendants sought to argue that they had targeted their Wolfoo videos at consumers in the United States and Vietnam only, asserting that their content was uploaded to "the US server", "all the alleged channels have addresses in the US" and by contrast "the Defendants do not have any channels named UK or located in the UK or posted in the UK."
The following factors were relied upon to support the Claimants' submission that there was targeting of UK consumers:
- The Defendants operated an English language website for their animation training academy;
- Such website included an article stating that the Wolfoo channel on YouTube attracts audiences from the UK;
- Screenshots of the website demonstrated one audio clip having 1,039,910 views and its accessibility from the UK;
- Screenshots of the YouTube channel demonstrated advertising aimed at a UK audience;
- The channel carried advertisements where the currency mentioned was British pounds and banner advertisements were aimed at a UK audience;
- An article sponsored by the Defendant was published in a UK-focussed online magazine;
- The Defendant's CEO stated in an interview that he wished "to capture international market share";
- Wolfoo has been dubbed into French, Spanish and Japanese. It would only be dubbed into those languages if there was intent to "capture" or target the audience in those countries. This was inconsistent with the Defendants' argument that the target audience was confined to the US and Vietnam;
- Some Wolfoo videos have UK themes and scenery;
- UK viewing figures for Wolfoo were estimated at over 100 million views per month.
The judge found that the Defendants' assertions were not, on balance, "factually accurate" and where they were accurate, they were not sufficient to persuade him that the UK was not a target. Additionally, the judge considered that Defendants had not added conditions to their YouTube channel to geoblock viewers from the UK.
Accordingly, the judge concluded that the Defendants had targeted the UK and the courts of England and Wales were seized of jurisdiction.
The court went on to consider whether the English courts were the appropriate forum to decide the dispute.
The Defendants maintained that, as Vietnam was the country of origin for the Wolfoo series and the location of the Defendants, the substantive infringement issues should be decided in Vietnam. They contended that there was no reason why the proceeding could not be heard in Vietnam, in particular pointing to the fact that the Claimants were willing to sue in other jurisdictions, including Russia, and there was no reason that the claim could not be head in the United States or Vietnam. The Defendants also mentioned prospective witnesses who were Vietnamese speakers and based in Vietnam.
The Claimants responded that it was crucial to take into account the fact that Peppa Pig was created and exploited in the UK and that "the protection of the Claimants' goodwill can only realistically be accomplished within the UK." The Claimants pointed out that they were entities registered in the UK, and their witnesses were based in the UK. Additionally, the Claimants argued that YouTube's internal team, which was also situated in the UK, would be a valuable source of factual witness testimony in these proceedings.
The judge applied the two-limb test set out in The Spiliada  1 AC 460:
- the Defendant must establish that the alternative forum is both (i) "available" and (ii) clearly or distinctly more appropriate than the English courts as a forum for determining the dispute; and
- if limb one was satisfied, the burden was on the Claimants to show that justice required that a stay of the English proceedings should not be granted.
The judge held that the Defendants had failed to satisfy the first limb of the test. Furthermore, the English courts were "available" and the appropriate forum in light of the fact that:
- the Claimants conceived and implemented the copyright works in England and Wales;
- damage to goodwill and other losses claimed occurred in England and Wales (as opposed to Vietnam) since the Claimants are registered and located in England and Wales; and
- there are witnesses situated in England and Wales.
The decision is significant for IP owners who may wish to bring claims in the UK against infringements taking place on internationally accessible internet platforms. In this case, with the Defendants being non-UK entities and the allegedly infringing Wolfoo videos being hosted on YouTube, it may not have appeared that the UK courts would be the appropriate jurisdiction to hear any infringement claim.
However, this decision provides clarity on the circumstances in which UK courts will have jurisdiction to hear such cases, and illustrates not only the UK courts' broad jurisdiction to hear cases, but also that the courts will take a highly fact and evidence based approach to determining whether a defendant is targeting UK consumers. This is beneficial for UK rights-holders wishing to file a claim in their home jurisdiction, which is likely also their biggest market and where their rights are strongest.
The decision also makes it clear that the question of whether the UK has been targeted is one of fact, and not of intention. Here, the Defendants asserted that they intended to target the United States and Vietnam only, and were not targeting UK consumers. Had the Defendants been able to show that they had geoblocked UK viewers from their YouTube channel, the outcome of the case may have been different.
Those providing comparable services on internationally accessible internet platforms should take note, and consider whether geoblocking should be applied to their content. Limiting access to viewers in specific jurisdictions may avoid the risk of being deemed to be targeting consumers in other jurisdictions and any potential infringement claims that could arise.
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.