In a landmark judgement on 17 October the High Court made orders blocking websites structured to infringe trade mark rights by selling counterfeit goods online.
Cartier International AG & Anr v. British Sky Broadcasting Limited & Ors, High Court of Justice, Chancery Division, HC  C01382.
In a 266-page decision Mr Justice Arnold decided that five major internet service providers – the ISPs, (British Sky Broadcasting Group Plc, BT Group Plc, EE, TalkTalk and Virgin Media) should
“block or at least impede access”
by subscribers to six “Target Websites”. The websites were selling cheap replicas or counterfeit goods including jewellery and watches.
The court held that there is a clear public interest in preventing the sale of counterfeit goods online and the Claimant had a
‘legitimate interest in curtailing such acivity [which] would not interfere with the provision by the ISPs of their services to their customers’.
Blocking injunctions are not new in cases of online copyright infringement. Orders have been made against ISPs by the English Courts in various cases in favour of film studios, record companies and the Premier League and regarding website indexing. However, until now, they have been made pursuant to s.97A of the Copyright, Designs and Patents Act 1988 (“CDPA 1988”) providing the High Court the power to grant injunctions against service providers, (taken as including ISPs) where that service provider has actual knowledge of another person using their service to infringe copyright.
There is no provision equivalent to s.97A CDPA 1988 in the Trade Marks Act. Richemont, the luxury brands company behind Cartier and Montblanc here relied instead on Article 11 of the Enforcement Directive (2004/48/EC which provides
“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 Court considered the UK’s implementation of the third sentence of Article 11 of the EU Enforcement Directive.
This was supposed to extend Article 8(3) of the Information Society Directive from just copyright to all forms of intellectual property, but the UK did not enact this into national law.
In defence, the ISPs argued that the UK’s failure to implement the third sentence of Article 11 of the EU Enforcement Directive meant that injunctions could not be granted based on trademark infringement. However Richemont claimed that Section 37(1) of the Senior Courts Act 1981, regarding injunctive relief was sufficient.
Arnold J held that under the “Marleasing principle”(where courts must interpret national law in light of any relevant directive as far as it is possible), trademarks should be covered.
“I conclude that, even if the court would not have power to grant a website blocking injunction in a trademark case upon a purely domestic interpretation of section 37(1), section 37(1) can and should be interpreted in compliance with the third sentence of Article 11 by virtue of the Marleasing principle. If it were otherwise, the UK would be in breach of its obligations under the directive.”
In a 2011 report by Frontier Economics Ltd. quoted in the judgement, the sale of counterfeit and pirated products is put at approximately $960 billion a year by 2015.
Blocking injunctions are only one of various remedies available for brand owners to fight infringing websites e.g.
- filing a domain name complaint if the website operates under a misleading name
- disabling the website’s third party merchant services or online payment mechanisms
- serving a takedown notice on the host of the offending content
The Judge said this was the first website blocking injunction against internet service providers awarded to a brand owner in the EU for a trademark infringement. This test is likely to be followed by other applications by Richemont and other trade mark owners, here and abroad regarding websites selling counterfeit goods.
If the ISPs are unsuccessful in any appeal, they would be unlikely to defend future cases, which could be brought using the simplified CPR Part 8 procedure.