Background
Recent case law
Comment
IP rights owners have often struggled to take effective action against online infringement of their rights. Online infringers can be difficult to track down and may be spread across multiple jurisdictions. Internet service providers (ISPs), through which the infringing websites are accessed, offer a much more attractive target. ISPs are usually large companies, in known locations; if the circumstances are right, they are not opposed to helping the fight against online infringement. This update considers the circumstances in which rights holders can obtain orders requiring ISPs to block access to infringing websites.
The Digital Economy Act 2010 introduces provisions to tackle online copyright infringement. These include obligations on ISPs to:
- issue warning notices to subscribers if allegations are made that an account is being used to infringe copyright; and
- notify rights holders, in certain circumstances.
The Digital Economy Act also contains provisions for ISPs to take certain technical measures to block access to infringing websites.
Challenges to the compatibility of the Digital Economy Act with European law have delayed its implementation and in 2011 the government announced that as the technical measures proposed were unlikely to be effective, this part of the act would not be taken further. The Office of Communications is expected to release the final version of its Initial Obligations Code for ISPs shortly, explaining how the remaining provisions will operate.
Notwithstanding this setback to the implementation of the act, existing legislation and case law already provide for blocking orders to be made against an ISP, in appropriate circumstances, to block access to websites that are infringing copyright .
No primary liability
The starting point of any analysis is that ISPs are granted broad exemptions from liability under the EU E-commerce Directive (2000/31/EC). ISPs are not liable in respect of information transmitted across their networks if they transmit information in a network as a "mere conduit". The directive was transposed into UK law by the Electronic Commerce (EC Directive) Regulations 2002.
Blocking orders for copyright
The EU Information Society Directive (2001/29/EC) states that notwithstanding the protections afforded to ISPs in the E-commerce Directive, "Member States shall ensure that rightsholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right".(1)
Section 97A of the Copyright, Designs and Patents Act specifically implemented the Information Society Directive into UK copyright law. It states that "the High Court… shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright".
Blocking orders for other rights
EU legislation sought to extend the availability of blocking orders to other IP rights, such as registered trademarks, by Article 11 of the EU Enforcement Directive (2001/29/EC). This states 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".
The United Kingdom did not specifically implement Article 11 of the Enforcement Directive.
In three recent cases Justice Arnold has considered the availability of blocking orders in light of these legislative provisions.
Facts
Copyright cases
In Twentieth Century Fox Film Corporation v British Telecommunications plc (Newzbin2)(2) major film rights holders applied for a blocking injunction against the defendant ISP under Section 97A, requiring it to block access to the Newzbin website (which facilitates file sharing of copyright materials). This case was brought after the claimants had attempted and failed to secure an effective remedy against Newzbin itself.
In Dramatico Entertainment Ltd v British Sky Broadcasting Ltd (The Pirate Bay)(3) rights holders sought an order against the defendant ISPs to block access to website The Pirate Bay that, as in Newzbin2, was making available copyright materials.
Trademark case
In L'Oreal v eBay(4) L'Oreal sought an injunction against eBay requiring it to block infringing content on its online marketplace and prevent further infringement of brand holders' rights in future.
Decisions
Copyright cases
In Newzbin2 the defendants were ordered to block access to the file-sharing website. This case was the first in which rights holders successfully used the mechanism in Section 97A. The judge confirmed that such an order may be granted even when the ISP has committed no copyright infringement itself and is entitled to take advantage of the 'mere conduit' defence set out in the E-commerce Directive.
This decision was followed in The Pirate Bay, which the judge held to be indistinguishable from Newzbin2. He held that the ISPs involved were required to block access to The Pirate Bay, and that such an injunction would comply with the proportionality principle, as it did not amount to a general obligation for ISPs actively to monitor and maintain the Internet; rather, the order was limited to a specific website.
Trademarks
In L'Oreal v eBay the judge held that he had jurisdiction to grant a blocking order even without the benefit of an express statutory power provided in respect of copyright by Section 97A. He held that the equivalent jurisdiction is conferred by Section 37(1) of the Senior Courts Act 1981, which states that "[t]he High Court may by order (whether interlocutory or final) grant an injunction… in all cases in which it appears to the court to be just and convenient to do so".
The judge stated that Section 37(1):
"gives the courts discretion to grant an injunction against an intermediary whose service has been used by third parties to infringe an intellectual property right, such as a registered trade mark, to the extent that this is what Article 11 of the Enforcement Directive required."
Having considered that the court has the power to grant such an injunction, the judge sought clarification from the Court of Justice of the European Union (CJEU) to determine the scope of injunctions granted in Article 11 of the Enforcement Directive.
The CJEU concluded that the court should be able to order the operator of an online marketplace to take measures which contribute to bringing infringements to an end, but also extend to preventing further infringements of that kind. The CJEU also confirmed that injunctions granted against a third party should be effective, proportionate and dissuasive, and may not create barriers to legitimate trade.
The court's powers to grant blocking orders against online infringement of copyright and registered trademarks originate from different sources. However, the end result is similar: an effective way for rights holders to block access to websites that infringe their IP rights.
In respect of copyright, the position now seems fairly settled following strong judgments in Newzbin2 and The Pirate Bay. In respect of trademarks, it remains to be seen how the judge will interpret the CJEU's guidance in L'Oreal v eBay. Presumably, he will follow the approach that the key issue is whether the injunction sought is reasonable and proportionate (eg, directed at specific sites and activities), rather than wide-ranging and onerous (eg, general blocking and monitoring obligations).
With full implementation of the remaining provisions of the Digital Economy Act not expected until 2014, it is likely that the courts will need to continue to apply the mechanisms already available to them to tackle online infringement for some time to come.
For further information on this topic please contact Jeremy Drew or Fiona Wilson at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ([email protected] or [email protected]).
Endnotes