Menu

Home / News & Resources / Legal Updates / A timely intervention by The Court Of Appeal to address online counterfeiting

A timely intervention by The Court Of Appeal to address online counterfeiting

11 Aug 2016

 

Just before the summer recess intellectual property rights owners and brand owners in particular received a welcome fillip from the Court of Appeal in its judgment handed down in Cartier International & Others v British Sky Broadcasting Ltd & Others.

 

Background

The luxury Cartier brand dates back to 1847 when Louis-Francois Cartier established a jewellery business in Paris. Cartier opened its first boutique in London in 1902. Today, Cartier is well known for its jewellery and watches, and also sells leather goods, writing instruments and a range of other accessories.  Cartier is part of Richemont group which owns a number of other well known brands, including Montblanc and IWC.

 

Cartier and sister companies in the Richemont Group sought orders against several Internet Service Providers (ISPs) to block access by customers of the ISPs to several third party websites which advertised and sold counterfeit Cartier and Richemont goods.

In 2014 Mr Justice Arnold held in Cartier’s favour and issued an injunction against the ISPs ordering them to block access to the third party websites and to bear the costs of doing so.  The ISPs therefore appealed to the Court of Appeal.

 

The Legal Arguments

The ISPs contended that the court had no jurisdiction to make website blocking orders in cases involving infringement of registered trade marks.  They argued that the United Kingdom had amended s.97A of the Copyright, Designs & Patents Act 1988 (CDPA) in order to implement Article 8(3) of the EU Information Society Directive (InfoSoc Directive) which expressly provides the High Court with the power to grant an injunction against an ISP, where that ISP has actual knowledge of another person using their service to infringe copyright, but the United Kingdom had not passed any legislation to implement the provisions of Article 11 of the EU Enforcement Directive which were intended to provide rights holders with the ability to apply for injunctive relief against intermediaries [like ISPs] for infringement of their intellectual property rights (i.e. a broader right than that provided by the CDPA and the InfoSoc Directive).

Cartier responded that the court had jurisdiction to make such orders pursuant to s.37(1) of the Senior Courts Act 1981 which provides the High Court with the power to grant an interim or final injunction in all cases in which it appears to be just and convenient to do so.

 

Decision

The Court of Appeal held that it [and the High Court before it] had jurisdiction to order the injunctions sought under s.37(1) of the Senior Courts Act 1981 as interpreted in light of the provisions of Article 11 of the EU Enforcement Directive.

It went on to agree with the earlier conclusions of Mr Justice Arnold that the court's discretion under s.37(1) to grant website blocking orders is not unlimited and that it must be exercised consistently with the terms of the EU Enforcement Directive and with the terms of the EU E-Commerce Directive.

The conditions which must be satisfied before a website blocking order can made are as follows:-

  1. The ISPs must be intermediaries within the meaning of Article 11 of the EU Enforcement Directive;
  2. Either the users or the operators of the website must be infringing the claimant's trade marks;
  3. The users or the operators of the website must use the services of the ISPs; and
  4. The ISPs must have actual knowledge of this (i.e. there is no obligation imposed on the ISPs to monitor infringement).

And in each case the court must be satisfied that the relief is:-

  1. Necessary;
  2. Effective;
  3. Dissuasive;
  4. Not unnecessarily complicated or costly;
  5. Not imposing barriers to legitimate trade;
  6. Fair and equitable and strikes a "fair balance" between the applicable fundamental rights; and
  7. Proportionate.

The court must also consider the substitutability of other websites for the target websites in respect of which the blocking injunction is sought and the requirement of the EU Enforcement Directive that remedies should be applied in such a manner as to provide safeguards against their abuse.

In terms of the costs of implementing the blocking injunction, the Court of Appeal in a majority decision of two to one held that Mr Justice Arnold was entitled to require the ISPs to bear the costs of the implementation albeit that this is a position that should be kept under review by the court in future applications for blocking injunctions. In this case Mr Justice Arnold was held to have taken proper account of the EU Enforcement Directive and the other parts of the EU legislative scheme, the guidance given by the EU  Court of Justice, the nature of the orders sought and the circumstances of the case.

 

Conclusion

The decision is good news for brand owners and provides further ammunition in the fight against counterfeiters and others engaging in trade mark infringement online. 

The principle applied by both the High Court and Court of Appeal would seem to have the potential for even wider applicability beyond the world of trade marks and to the availability of blocking injunctions to address infringement of other intellectual property rights covered by the EU Enforcement Directive.

Through the court’s reliance on s.37(1) of the Senior Courts Act 1981 for its inherent jurisdiction to grant injunctive relief one can also envisage parties in other non-IP related cases seeking to persuade the court to rely upon it to impose blocking injunctions on ISPs in the future in respect of content on third party websites which they object to although how effective this will be remains open to question until tested before the courts.

 

 

DMH Stallard have a dedicated team of intellectual property specialists who can advise on this and other IP related matters. For more information contact:

Comments

Currently no messages. You need to be registered and logged in to comment

Further reading

Request a call back