The Court of Appeal has dismissed an appeal brought by the main UK internet access ISPs against an order obtained by Cartier forcing the ISPs to block access to certain websites used to sell counterfeit goods.
This decision upholds that of Arnold J in the High Court and confirms the broadened application of website blocking orders, which had previously only been based on copyright infringement, under s97A of the UK’s Copyright, Designs and Patents Act 1988 (“CDPA”). The Court of Appeal also endorsed Arnold J’s overall approach to blocking orders, which he had established through several 97A cases, including:
- the test he had applied with four threshold conditions that must be met (namely (i) are the ISPs intermediaries? (ii) are the site operators infringing? (iii) do the operators use the ISPs’ services to infringe?; and (iv) do the ISPs have knowledge of this?;
- the principles to be applied in determining whether an injunction is appropriate; and
- his conclusion that the costs of enforcing the orders should be borne by the ISPs rather than the rights holders.
Can blocking orders protect trade marks?
In terms of the core issue of granting the blocking orders, the appeal focused on a number of areas of Arnold J’s original judgment, but in particular contested whether the court had jurisdiction to grant blocking orders in cases of trade mark infringement, whether the orders complied with the principles of granting a website blocking order and whether there had been adequate consideration of alternatives to blocking orders.
The argument brought by the ISPs against the court having jurisdiction focused on the fact that whereas in claims for copyright infringement, the United Kingdom had expressly implemented Article 8(3) of the EU Information Society Directive into its own national law through s97A CDPA, there was no specific change to UK legislation to give effect to the third sentence of Article 11 of the EU IP Enforcement Directive, which states ‘Member States shall also ensure that rights holders 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 Directive’ .
Lord Justice Kitchen gave the leading judgment and looked to s37(1) of the Senior Courts Act, which provides for a general discretion to provide injunctive relief, for the jurisdictional authority to grant website blocking orders in the context of the infringement of trade mark rights. It held that under the Marleasing principle (which imposes on the national courts of EU member states the duty to, as far as possible, interpret national legislation in accordance with EU legislation), s37(1) of the Senior Courts Act, which is drafted very broadly, should be interpreted to allow the sorts of blocking orders envisaged by the third sentence of Article 11 of the Enforcement Directive. Lord Justice Kitchen dismissed the argument of the appellant that the power of the court to award injunctions is limited to the particular situations described in previous cases, on the basis that pursuant to general equitable principles injunctions may be issued in new categories when such a course of action appeared appropriate.
Principles for determining whether blocking appropriate
Lord Justice Kitchen next considered whether the judge had applied the correct principles in determining whether a website blocking order should be made. Arnold J had identified these principles as being that the order sought should (i) be necessary; (ii) be effective; (iii) be dissuasive; (iv) not be unnecessarily complicated or costly; (v) avoid barriers to legitimate trade; (vi) be fair and equitable and strike a ‘fair balance’ between the applicable fundamental rights; (vii) be proportionate; (viii) take account of the extent to which other websites might be substitutable for the target websites; and (ix) include safeguards against the order being abused. Lord Justice Kitchen approved the approach Arnold J had taken of applying these principles.
The appellants contested a number of the first instance judge’s conclusions on the application of these principles, but in particular his finding that the costs to the ISPs of implementing the blocking order (and future blocking orders) were proportionate, that web blocking would not achieve any material benefit and that there was a failure to consider alternative measures.
Who bears the costs
Lord Justice Kitchen felt that the ISPs were able to bear the costs through either absorbing them themselves (the cost of an individual blocking order was found to be modest) or passing them on to consumers. However, this is not to say that such costs would always be proportionate, and the Court of Appeal accepted it would be an area to keep an eye on especially if the cost to rights holders of bringing a claim no longer imposed a constraint on them.
Real Benefit to Rightsowners?
In terms of material benefit, the issue at hand was that a number of the sites targeted had relatively small numbers of visitors. However, Lord Justice Kitchen found that looking at things from a purely numerical perspective was misleading – issues such as damage to brand value and consumer perception would also need to be taken into account, which ultimately made the targeting of these sites of material benefit.
Alternative Measures Available?
Lord Justice Kitchen felt that Arnold J had given alternative measures adequate consideration and agreed that approaches such as issuing takedown notices were only likely to achieve short term disruption and so did not provide adequate protection for rights holders. Furthermore it was far more economically efficient to require intermediaries such as ISPs to take steps to block websites than to place that burden on rights holders themselves.
The case will be useful to rights holders in two respects. Firstly, it confirms the reasoning used by the courts in previous website blocking injunctions under s97A against intermediaries, who are in an economically efficient position to prevent copyright infringement. Secondly, it confirms that there is a new form of protection for rights holders: blocking orders to prevent infringement of trade mark rights. Thirdly, and bearing in mind the broad terms of s37(1) of the Senior Courts Act, this leaves the door open to the possibility of blocking injunctions being granted to protect other forms of intellectual property (patents, design rights, database rights), and perhaps also to prevent other tortious activities (eg breach of confidence, defamation cases).
The fact that the court has also confirmed that for the time being ISPs will have to bear the cost of implementation is encouraging for rights holders considering bringing similar actions.