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25-07-2016

On 6 July 2016, the Court of Appeal of England and Wales upheld a 2014 ruling on online blocking injunctions that requires Internet Service Providers (ISPs) to block access to websites offering counterfeit products and infringing trademarks. This could prove to be an important new tool for brand owners seeking to protect trademarks from online infringement, as Novagraaf’s Nora Fowler explains.  

The internet, though it undoubtedly brings many great benefits to businesses, can pose significant difficulties for brand owners trying to protect their IP rights. While infringing material can be easily uploaded, it can be difficult to find out the source of those websites with infringing material or who is behind them in order to take action against the infringement.

One possible solution to this problem is for IP rights holders to seek blocking injunctions against intermediaries such as ISPs. Although these type of injunctions are relatively common in relation to online copyright infringement, prior to 2014 no such injunctions had been issued in England and Wales in relation to trademark infringement.

Breaking new ground
In 2014, Richemont, the owner of luxury brands such as Montblanc and Cartier, made an application to the High Court of England and Wales for  injunctions requiring the main five UK ISPs (Sky, BT, EE, TalkTalk and Virgin) to block or attempt to block access by their customers to certain websites selling counterfeit copies of  goods and infringing Richemont’s trademarks.

The judge in the case, Mr Justice Arnold, granted the blocking injunction and, notably,  held that the ISPs should bear the implementation costs of the order.

Does the court have the necessary jurisdiction?
Article 11 of the European Parliament and Council Directive on the enforcement of IP rights (‘Enforcement Directive’) states that EU member states (which, for the time being at least, includes the UK: “…shall also ensure that rights holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an IP right…”

This part of Article 11 of the Enforcement Directive was never implemented into UK domestic law.

There are statutory provisions which allow for blocking injunctions against ISPs in copyright cases and, as mentioned above, a number of blocking injunctions have been granted by the Courts in England in relation to online copyright infringement. However, no specific statutory provisions exist in relation to trademark infringement.

Nonetheless, Arnold J held, and the Court of Appeal agreed, that the High Court did have jurisdiction to issue blocking injunctions against the ISPs ordering them to block access to websites selling counterfeit goods infringing trademarks. This is because section 37(1) of the Senior Courts Act 1981, states  that the High Court has the discretion to: “grant an injunction … in all cases in which it appears to be just and convenient to do so”.

Threshold conditions
In order for the High Court to be able to exercise its discretion to issue blocking injunctions against ISPs four conditions must be satisfied, namely:

  • Are the ISPs intermediaries?
  • Are the operators of the websites infringing the trademarks?
  • Do the operators of the websites use the ISPs' services to infringe?
  • Do the ISPs have actual knowledge of this?

Arnold J held that all of these conditions were satisfied in this case.

Requirements for blocking injunctions
He went on to find that the six requirements which the Court had to consider satisfied in order to grant the injunctions were, indeed, satisfied. These were that: the relief was necessary, effective, dissuasive, not unnecessarily complicated or costly, avoided barriers to legitimate trade, was fair and equitable and struck a fair balance between the fundamental rights and, finally, that the relief was proportionate.

The Court of Appeal agreed with Arnold J’s assessment.

In particular, in relation to proportionality, the Court of Appeal rejected the ISPs’ criticisms in relation to alternative measures and agreed that Arnold J was entitled come to the conclusion he did based on the evidence before him that notice and takedown would be unlikely to achieve anything more than short-term disruption  of the websites. The Court of Appeal also held that Arnold J was correct to find that rights holders seeking injunctive relief did not have to prove that the relief would be likely to reduce the overall level of infringement of their trademarks.

Implementation costs
Finally, the Court of Appeal agreed that the ISPs, and not the rights holders, should be the ones to carry the cost of implementing the blocking injunctions as it could be considered as part of the cost of carrying out the business of the ISPs.

Implications for brand owners
This development seems to be a sensible extension of the already relatively common use of blocking injunctions in relation to copyright. The judgement is likely to be welcomed by brand owners as another way of protecting their trademark rights in an increasingly online world. For now, the costs of implementation will be carried by the ISPs. However, it is worth noting that this may not always be the case as the implementation costs for a blocking injunction is likely to be a factor when assessing the proportionality. It will be interesting to see how this develops and how popular this course of action becomes.

Nora Fowler is a trademark attorney in the London offices of Novagraaf