To block or not to block?
As the internet increasingly becomes the playground of choice for counterfeiters, a recent decision is a welcome development for brand owners, writes Salmah Ebrahim
Following on from the ground-breaking ruling of Mr Justice Arnold at first instance, the Court of Appeal has confirmed in Cartier International AG and others v British Sky Broadcasting Ltd and others (Open Rights Group intervening) that the English High Court does have jurisdiction to make website-blocking injunctions against internet service providers (ISPs) in trade mark infringement cases.
The Cartier case was originally brought by a group of companies which owned UK-registered trade marks for Cartier, Montblanc, IWC, and several other brands. Their opponents – the five main ISPs in the UK – boasted a 95 per cent market share.
At the time that proceedings were brought, it was accepted that website-blocking orders could be made in the UK in copyright infringement cases as the Copyright, Designs and Patents Act 1988 explicitly provided for this in giving effect to the EU directive the measure stemmed from. The position was less clear in trade mark infringement cases, however, as domestic legislation (including the Trade Marks Act 1994) had not explicitly incorporated wording from the EU directive that allowed for such a measure in the context of trade mark infringement cases.
Arnold J held that the court already had jurisdiction to grant website-blocking orders by virtue of the Senior Courts Act 1981, which allows the High Court to grant interlocutory or final injunctions ‘in all cases in which it appears... to be just and convenient to do so’, and that, on the facts of this particular case, it was appropriate to do so. He further ruled that ISPs should bear the costs of implementing blocking orders.
On appeal, the ISPs disputed the High Court’s jurisdiction to grant website-blocking orders and, in any event, that the costs of implementing such injunctions should be borne by ISPs if so ordered. With Lord Justice Briggs dissenting on the issue of costs, the Court of Appeal ruled the High Court had not erred in its ruling and the appeal should be dismissed.
While confirming the High Court’s jurisdiction, the Court of Appeal was keen to make clear that the court’s discretion to grant website-blocking orders was not unlimited. For such an injunction to be ordered, four threshold conditions must be met:
The ISPs must be intermediaries (which was accepted without contest in this case);
The users or operators of the target website must infringe the brand owner’s trade mark (for example, by selling counterfeit goods as was the case in this instance);
The users or operators of the target website must use the ISPs’ services to infringe (which in light of the ISPs’ 95 per cent market share was deemed to be the case here); and
The ISPs must have knowledge that their services are being used to infringe the brand owner’s trade mark (which was accepted without contest in this case and could otherwise be satisfied by putting ISPs on notice in a simple letter).
Provided the above threshold is met, a website-blocking injunction will then be granted only if the court is satisfied such relief is necessary; is effective; is dissuasive; is not unnecessarily complicated or costly; avoids barriers to legitimate trade; is fair and equitable and strikes a ‘fair balance’ between the applicable fundamental rights; is proportionate; and shall be applied in such a manner as to provide safeguards against its abuse.
Advising brand owners
The Court of Appeal decision represents a victory for brand owners and provides an additional tool for combatting counterfeiters advertising and selling counterfeits online under brand owners’ trade marks.
Paired with the simplified CPR part 8 procedure for bringing claims, it has empowered brand owners to seek an order blocking traffic to websites known for selling counterfeits of their goods, which ISPs are unlikely to defend given the scope of the market that was represented in the Cartier case and the relatively low cost of implementing such an order (recently estimated to be around £5,000 per website in Twentieth Century Fox and others v British Telecommunications PLC).
Helpfully, His Honour Judge Hacon also recently confirmed in Cartier and another v BSkyB and others (Cartier II) that there is no requirement for brand owners to show that blocking access to target websites is likely to reduce the overall infringement of a brand owner’s trade marks.
As the internet increasingly becomes the playground of choice for counterfeiters, these recent developments are a welcome addition in the continued battle against those who pose a significant threat to brand value and, in far too many cases, consumer safety too.
Salmah Ebrahim is a senior associate at Gowling WLG and an associate member of the Chartered Institute of Trade Mark Attorneys