Fake goods online: blocking injunctions
The Court of Appeal has upheld the High Court's decision to grant orders requiring five internet service providers (ISPs) to block access to certain websites selling counterfeit goods.
Background to  EWCA Civ 658
While it has long been common practice for copyright owners to utilise blocking injunctions to compel ISPs to block access to file sharing websites that infringe their copyright works, blocking injunctions are now being sought for infringement of trade marks.
In the High Court decision, the judge found that it had jurisdiction to make such an order in an action brought by a trade mark owner, and that it was appropriate to make the order in that instance. Furthermore, the judge held that the ISPs should bear the costs of implementing the blocking order. The ISPs appealed to the Court of Appeal claiming that, amongst other things, they should not be subject to such an order, as they were not alleged to be wrongdoers; that the court had no jurisdiction to make such an order; that the orders made were disproportionate; and that the judge fell into error in deciding the issue of costs.
The ISPs contended that the court did not have jurisdiction to grant website blocking orders in cases involving infringement of registered trade marks. The Court of Appeal did not agree, finding (as the judge at first instance had) that the IP Enforcement Directive and section 37 of the Senior Courts Act 1981 provided the High Court with a basis on which it could grant an injunction against an intermediary, who was not an infringer, but whose services had been used by a third party to infringe a registered trade mark.
Principles to be applied
The judge in the High Court identified several principles that must be applied when considering whether to make a website blocking order. One of these principles, the requirement for 'effectiveness', remained in dispute. The ISPs contended that a remedy should not be granted if it would not be effective, and that it was incumbent on the claimants to show that the order sought would achieve a significant reduction in the overall levels of access to infringing content. While the court did accept that blocking access to a website is less likely to be proportionate if there are a large number of alternative websites which are likely to be equally accessible and appealing to the interested user, it found that it would be "absurd" if rights holders seeking injunctive relief against counterfeiters were required to prove that the relief would be likely to reduce the overall level of infringement of their trade marks.
The ISPs argued that a website blocking order was not proportionate in this case because, for example, of the costs of implementing such an order, of the fact that there was no evidence blocking websites would achieve any material benefit and the fact that ISPs were not 'best placed' to bring the infringing activities to an end.
The court rejected these arguments, explaining that the law already provided sufficient safe guards for ISPs in relation to potential trade mark infringement, and it was commonly accepted that ISPs are not required to monitor the activities taking place on target websites. Overall, the court held that it was proportionate to grant blocking injunctions in this instance and that, bearing in mind that the ISPs generated profits from the services provided, the ISPs should be liable for the cost of implementing the injunction (although one judge of the three dissented on this point).
The Enforcement Directive gives rights holders the right to apply for an injunction against an ISP whose services are being used by a third party to infringe industrial property rights, and commentators have recognised that this may lead to cases being brought for infringement of other IP rights, such as registered designs.
More generally, it will be interesting to see whether this decision leads to calls for other methods of disrupting online infringements in future, for example, 'de-ranking' search results (for example, where an internet user inputs "replica Cartier" and no search results are returned).
Case details at a glance
Jurisdiction: England and Wales
Decision level: Court of Appeal
Parties: Cartier International AG, Montblanc-Simplo GMBH, Richemont International SA and British Sky Broadcasting Limited, British Telecommunications plc, EE Limited, TalkTalk Telecom Limited, Virgin Media Limited and The Open Rights Group
Citation:  EWCA Civ 658
Date: 06 July 2016
Full decision: http://dycip.com/EWCACiv658