In a recent decision the High Court has granted a series of orders sought by Richemont (the owner of a number of luxury brands such as Cartier, Montblanc and IWC) against various Internet Service Providers (ISPs) including Sky and BT, requiring them to block or impede access to particular websites selling counterfeit Cartier, Montblanc and IWC goods.
The decision highlights the challenges which rightsholders face when seeking to tackle trade mark infringements online. While rightsholders will undoubtedly welcome the decision, it seems unlikely that there will be a flood of similar applications given the time and costs involved in obtaining such court orders.
The case concerns six websites (the 'target websites') which are all advertising and selling counterfeit goods of a particular Richemont brand, for example, the website www.cartierloveonline.com which sells counterfeit Cartier jewellery. In each instance the target website also incorporates the brand name into its domain name and is directed towards UK consumers.
Richemont is the owner of a number of UK trade mark registrations for the marks CARTIER, MONTBLANC and IWC and sought an order from the court requiring the ISPs to block, or at least impede, access by subscribers to the target websites on the basis of trade mark infringement.
The key issues in this test case were whether the High Court had jurisdiction to make the blocking orders sought in the context of trade mark infringement and, if so, whether the orders sought were effective and proportionate.
Does the High Court have jurisdiction to make the orders sought against the ISPs?
The court's jurisdiction to make similar blocking orders in relation to websites which display content which amounts to copyright infringement is well established under section 97A of the Copyright Designs and Patents Act 1988 (CDPA) (which implements Article 8(3) of the InfoSoc Directive). There is, however, no equivalent provision in the field of UK trade mark law, as the UK government did not pass any legislation to transpose into national law certain provisions of Article 11 of the Enforcement Directive which state 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..". This decision was seemingly made on the basis that existing UK law was already in compliance with Article 11.
Arnold J decided that the court had jurisdiction to grant the orders sought by Richemont as a matter of both domestic law, by virtue of section 37(1) of the Senior Courts Act 1981 (SCA), and European law, under section 37(1) of the SCA read in accordance with Article 11 of the Enforcement Directive.
If so, were the orders sought proportionate and effective?
Arnold J ran through the threshold conditions for establishing whether an injunction should be granted and considered that each of the conditions was satisfied in this instance, as:
- each of the ISPs was an intermediary;
- the operators of the Target Websites were infringing Richemont's trade marks;
- the operators of the Target websites used the services of the ISPs to infringe the trade marks; and
- the ISPs had actual knowledge of this.
Arnold J then considered the various requirements which ought to be met before the blocking orders could be granted and a key issue was whether the form of blocking orders sought by Richemont were proportionate. In order to assess this, Arnold J considered a number of factors as follows:
The comparative importance of, and the justification for interfering with, Richemont's trade mark rights on the one hand, and the freedom of ISPs to carry on business and internet users to receive information on the other
Arnold J concluded that the blocking orders would not interfere with the way in which ISPs provided services to their customers. Furthermore, as the ISPs already possessed the requisite technology with which to block websites (such technology currently being utilized to block, among other things, images of child sexual abuse in line with the Internet Watch Foundation's blocking regime) no costs would be incurred in acquiring new technology.
The right of internet users to receive information should not be affected if the orders were properly worded and targeted.
The availability of less onerous options for dealing with online infringement
One of the main arguments advanced by the ISPs in the case focused on the fact that there were other less burdensome and more effective ways for Richemont to deal with the problem of online infringements including:
- sending cease and desist letters to the operators of the target websites;
- sending takedown notices to the hosts of the target websites, demanding that the target websites be taken down;
- requesting that payment processors used by the Target Websites eg, Visa should suspend the operator's merchant accounts;
- attempting to recover the domain names of the target websites via dispute resolution procedures or persuading a law enforcement agency such as the Police Intellectual Property Crime Unit to take action to have the domain name cancelled or suspended;
- sending notices to search engines requesting that they 'de-index' the target websites; and
- tackling imports of counterfeit goods via customs seizures.
For a variety of reasons Arnold J was not persuaded that the above options would be as effective in dealing with online infringements as the blocking orders sought by Richemont. In particular Arnold J accepted that one of the key advantages of website blocking from the perspective of the rightsholder was the ability to update the orders to include additional related websites and thereby avoid attempts by the operators of the target websites to circumvent the orders (for example, by switching the target website to a different domain name).
The efficacy of the measures which ISPs may have to adopt and whether these will seriously discourage users from accessing the target websites
It was Arnold J's view that it should not be for the rightsholder to show that the remedy sought will be effective in reducing the overall level of infringement of its IP rights, and this confirmation will be welcomed by rightsholders.
In any event, evidence put forward in the case suggested that UK traffic to websites which were subject to blocking orders under section 97A of the CDPA (as a result of copyright infringement) decreased rapidly after the blocking orders were implemented. This led Arnold J to conclude that blocking the target websites in this instance should lead to similar results.
The costs of implementing the measures
The ISPs in this case were not overly concerned with the cost of implementing a single website blocking order, as it was accepted that the costs of blocking a single website were modest. Instead the main concern of the ISPs was the cumulative cost of implementing all potential future website blocking orders, as this would clearly increase the overall cost burden on ISPs. Whilst Arnold J accepted that this was a legitimate concern, he was not persuaded that the blocking orders sought by Richemont should be refused solely on this basis.
After considering all of the above, Arnold J concluded that the blocking orders sought were proportionate and struck a fair balance between the various rights at issue. Accordingly he agreed that the orders should be made, subject to the inclusion of a number of additional safeguards to ensure that:
- affected subscribers could apply to the court to discharge and vary the orders;
- the page displayed to users attempting to access a target website provides details confirming that the target website has been blocked by court order, the name of the party who obtained the order and an explanation stating that affected users have the right to apply to the court to discharge or vary the order; and
- the orders contain a 'sunset clause' stating that the orders will only last for a certain period (eg two years), unless the ISPs consent to the orders continuing or the court orders that they should be continued.
Whilst this case is undoubtedly good news for rightsholders, as it confirms that blocking orders may be granted in the UK to combat online trade mark infringement, it also underlines the huge difficulties which rightsholders face when dealing with infringing websites, and contains an interesting discussion of the likely efficacy of a number of enforcement options which may be utilized by rightsholders to deal with such infringements.
The bottom line is that court orders such asthese are only likely to be the tip of the iceberg when it comes to tacklingwebsites selling counterfeit goods. As a result of this decision Richemont hasobtained orders in relation to six target websites, but according to Richemont's own evidence in the case there are approximately 46,000 additional infringing websites which have been identified and are awaiting enforcement action. It is likely that the difficulties and costs necessarily involved in obtaining enforcement orders in respect of each infringing website (even if the applications are not opposed) means that such orders are unlikely to be a panacea for all instances of online infringement, but they will nevertheless be an important part of the armoury employed by rights holders to combat trademark infringement online.