The UK’s Court of Appeal recently confirmed that UK brand owners can take action against internet service providers (ISPs) whose services are being used by website operators to sell goods which are either counterfeit or infringe a brand owner’s trade marks.

In 2014, the High Court held that it had jurisdiction to grant Cartier (along with Montblanc and Richemont) so-called “blocking injunctions”, ordering ISPs to block user access to websites selling counterfeit Cartier and Montblanc goods. In Cartier International and Others v British Sky Broadcasting and Others Ors [2016] EWCA Civ 658, the Court of Appeal has upheld that decision. Even though the ISPs were neither infringing the trade marks nor engaging in a common design, they were still considered “essential actors” in the infringing activities of the website operators.

Jurisdiction

Article 11 of the Enforcement Directive states that

Member States shall also ensure that rightholders 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.

The defendants tried to rely on the fact that Article 11 has not been transposed into UK law, unlike corresponding EU law regarding the availability of website blocking orders against copyright infringers.

However, the Court of Appeal referred to section 37(1) of the Senior Courts Act 1981, which says that the High Court may “grant an injunction… in all cases in which it appears to be just and convenient to do so”. It held that this unlimited discretion meant that, provided it is “just and convenient to do so”, a website blocking order can be made under Article 11 where services of an intermediary, such as an ISP, have been used by a third party to infringe a registered trade mark.

Four “threshold conditions” should be met before making the assessment: (i) the ISPs must be intermediaries under Article 11; (ii) the website users or operators must be infringing the claimant’s trade marks; (iii) the website users or operators must be using the ISP’s services; and (iv) the ISPs must have actual knowledge of this use.

Key considerations

In the original High Court case, Arnold J had found that website blocking orders should only be made where such relief was necessary, effective, dissuasive, fair and equitable, proportionate, not unnecessarily complicated or costly, avoid barriers to legitimate trade and strike a “fair balance” between the applicable fundamental rights. The substitutability of other websites was also a key consideration, along with the application of remedies such that they provide safeguards against their abuse.

The Court of Appeal agreed with this analysis. It noted that Arnold J had been correct to state that the efficacy of a blocking injunction is not measured by whether it will lead to a complete cessation of the infringement. A rights holder will not be required to show that such relief would be likely to reduce the amount of infringement of their trade marks. However, the availability of alternative websites which are as accessible and appealing to the interested user will raise the question of proportionality.

Costs

The Court of Appeal agreed with Arnold J that the ISPs should bear the implementation costs of the order (although noted that this was itself a highly material consideration when assessing proportionality of such an order). Brand owners should note that the Court has not ruled out the possibility that a rights holder may have to pay some or all of the implementation costs.

A key question when assessing costs proportionality is whether the likely costs for the ISP are justified by the benefits of the website blocking order to the rights holder. Courts will consider whether alternative measures could achieve those benefits. The Court of Appeal noted in this instance that notice-and-take down measures were not viable alternatives, being only short-term solutions for rights holders.

Going forward

This decision will provide much needed comfort to brand owners trying to tackle online infringement of their trade marks. It also has wider significance, demonstrating both that blocking injunctions can be sought in respect of all IPRs and reinforcing the Court’s wide discretion to grant injunctive relief.

It is also noteworthy that the UK Court adhered to EU legislation and Court of Justice of the EU (CJEU) decisions when formulating its judgment. It will be interesting to see how the future of website blocking injunctions plays out in light of the UK’s decision to withdraw from the EU.