The High Court handed down its decision in Cartier International and Others vs BSkyB and others [2014] EWHC 3354 (Ch) on 17 October 2014. The court held that trade mark holders may be granted site-blocking injunctions against ISPs. Site-blocking injunctions pursuant to s97A CDPA are now well established in relation to online content which infringes copyright. This judgment could pave the way for a similar regime in respect of online trade mark infringement, notwithstanding the absence of an equivalent statutory provision.

The websites which are the subject of the injunction are:-

www.cartierloveonline.com
www.hotcartierwatch.com
www.iwcwatchtop.com
www.replicawatchesiwc.com
www.1iwc.com
www.montblancpensonlineuk.com
www.ukmontblancoutlet.co.uk
www.montblancoutletonline.co.uk

If you cannot access the sites above then your ISP is blocking your access to the internet!

Background

The Claimants were all companies within the Richemont Group and owned the well-known luxury brands; Cartier, Montblanc and Richemont, including a broad portfolio of trade marks.

The Defendants were five Internet Service Providers who together had a market share of approximately 95% of UK broadband users. It is interesting to note that the Defendants were not the website owners, or even the hosting services.

The Claimants applied for injunctions against the Defendants requiring them to block or impede access to a number of websites which advertised and sold counterfeit goods under the Claimants’ trade marks. A single test purchase was made from one site and the Claimant claimed the items to be fake. No independent evidence seems to have been raised and clearly the Claimant has a vested interest in this matter, so one might question why the court did not see fit to verify the evidence.

Judgment

Did the Court have jurisdiction to make such an order?

Regardless of the fact that there is no express statutory provision along the lines of s97A, Arnold J reviewed the Court’s general power to grant injunctions as recognised by s37(1) Supreme Courts Act 1981 and held that, on a purely domestic interpretation of this section, the Court would have jurisdiction to make the order sought.

In the alternative, Arnold J also considered the correct interpretation of s37(1) in light of Article 11 of the IP Enforcement Directive which requires that:

“Member States shall also ensure that rightsholders 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, without prejudice to Article 8(3) of the [InfoSoc Directive].”

Article 8(3) of the InfoSoc Directive was implemented as s97A CDPA, however the UK took no steps to implement the provision of Article 11 quoted above. Arnold J held that Article 11 was intended to apply to all IP rights, rather than just copyright and therefore the Court had the power to grant the injunction sought pursuant to s37(1), as interpreted in accordance with the IP Enforcement Directive.

What conditions must be satisfied for the Court to make such an order?

Arnold J held that the conditions to be satisfied were effectively the same as those for blocking injunctions under s97A CDPA, namely: (i) the ISPs must be intermediaries; (ii) the users and/or operators of the website must be infringing the claimant’s trade marks; (iii) the users and/or operators must use the ISPs’ services to do that; and (iv) the ISPs must have actual knowledge of this.

Were the conditions met in this case and, if so, what principles should be applied when deciding whether to make an order?

Arnold J held that the threshold conditions were met, however in order for the Court to make the order sought the relief must:

• be necessary
• be effective
• be dissuasive
• be not unnecessarily complicated or costly
• avoid barriers to legitimate trade
• be fair and equitable and strike a “fair balance” between the applicable fundamental rights; and
• be proportionate.

Arnold J considered each of these factors in turn and concluded that blocking orders should be made.

In particular, the Judge noted that the Claimants had a legitimate interest in curtailing trade mark infringement and that there was also a public interest in preventing trade mark infringement, especially where counterfeit goods were involved. Arnold J considered expert evidence on the efficacy of blocking measures implemented pursuant to s97A orders and held that they have been reasonably effective in reducing use of the websites concerned.

Consideration was given to other measures available to the Claimants, including takedown notices to hosts of the websites, however Arnold J concluded that there were no alternative measures that would be equally effective but less burdensome.

The main effect on the ISPs would be additional operating costs, but the Judge considered that ISPs now have the requisite technology and technical capacity to implement the orders; far more so than when such orders were first made under s97A.

On balance, Arnold J held that the costs to the ISPs were justified by the likely efficacy of the blocking measures and the benefit to the Claimants having regard to the other measures available to them. The Court therefore granted orders substantially in the form sought but with two modifications; (i) a requirement that the notice on the blocked page should identify the party who applied for it to be blocked; and (ii) the orders should contain a “sunset clause” such that they cease to apply at the expiry of a defined period.

Comment

This decision provides a new option for trade mark holders seeking to limit the online sale of counterfeit goods. In particular, the Judge’s comments about the effectiveness of alternative measures and the proportionality of imposing the obligation on ISPs may well encourage rights holders to seek site-blocking injunctions.

It remains to be seen whether the ISPs will elect to challenge this decision or if they will continue to oppose future applications (decisions under s97A are now generally dealt with on paper), given the additional costs burden they could now face.

It will be interesting to see whether this principle can be extended to other cases of trade mark infringement, rather than counterfeiting, as the public interest in preventing the sale of counterfeit goods was a significant factor in the Court’s determination when considering whether to make the order in this case.

Censorship

So is this censorship of the internet? The websites listed do in fact appear to be offering for sale counterfeit items as the Claimant alleges. But the fact remains that the website owners were not involved in the litigation. So we only have the word of a company wanting to have access to another companies website removed.

I have no argument with removing trademark of copyright infringing websites, but the issues are greater than the simple facts of the matter. The injunction allows Cartier/Montblanc/Richemont to add to the list of website which are blocked? The injunction also blocks sub domains.

What are the potential results of this? What if a website is alleged (by Cartier) to be selling counterfeit Cartier products but in reality Cartier simply objects to the seller? What if the items are not in fact counterfeit but instead second hand items sold by a collector at a lower cost with a suspicion that they are counterfeit? What about a website selling a number of items that are not related to Cartier and only a few Cartier items? This can be added to the injunction at any time without involvement (or even potentially knowledge) from the website owner. What about a website with a subdomain?

Facebook it increasingly used to sell products. Would it be fair to block access to Facebook if a single person offers on the site for sale a counterfeit Cartier item? Everyone in the UK could potentially have access blocked?

What about this site? Could we be added to the order because we have linked to the websites listed in the publicly listed judgement? Could Cartier take offence that we have listed and commented and have our website added to the list? The answer appears to be that yes they could, and that cannot be right.

On the facts of the case the decision seems justified but the principle seems rather more problematic. I for one hope that the ISPs listed appeal to a higher court.