As a follow up to our previous article, “Website Blocking Order – a Possible Remedy against Trade Mark Infringement on the Internet?”, we now revisit the topic as the English Court of Appeal handed down its decision in Cartier International AG & Ors v British Sky Broadcasting Limited [2016] EWCA Civ 658 in July 2016. The Court of Appeal affirmed the High Court decision, which is believed to have paved the way for trade mark owners to bring website blocking order actions against internet service providers (“ISPs”), forcing them to block their customers from accessing websites which contain infringing contents.

Brief Facts

The Claimants owned a large number of UK registered trade marks, including Cartier, Montblanc and IWC. They sought orders against the five ISPs in the UK which accounted for 95% of the market share, requiring the ISPs to block access to the websites that infringed their trade marks by advertising and selling counterfeit goods.  The Claimants contended that the operators of the target websites were infringing their trade marks by using the services of the ISPs.

The Proceedings

The High Court held that it had jurisdiction and it was proportionate to grant website blocking orders (the “Orders”) against the ISPs in the circumstances. The ISPs were also required to bear the costs of implementing the Orders.

On appeal, the ISPs challenged the court’s jurisdiction to grant the Orders, that the jurisdictional threshold requirements were not satisfied, and the failure of the trial judge to properly identify the correct principles that should be applied in deciding whether to make a website blocking order. They argued that the Orders were disproportionate because the ISPs, being wholly innocent, should not be required to pay for the costs of implementing the Orders.

The Court of Appeal’s Decision

The Court of Appeal agreed that the ISPs were innocent of wrongdoing and did not owe a common law duty to take reasonable care to ensure that their services were not used by the operators of the offending websites. Nevertheless, it was noted that as the operators of the target websites need the services of the ISPs in order to offer and sell their counterfeit goods to consumers in the UK, the ISPs were inevitable and essential actors in those infringing activities.

As such, it would be appropriate to subject the ISPs to website blocking orders in certain circumstances. To invoke the Court’s jurisdiction to grant such orders, the Court of Appeal affirmed that all of the following four requirements should be satisfied:

1.        the ISPs were intermediaries;

2.        the operators of the target websites infringed the trade marks;

3.        the operators of the target websites used the ISPs’ services for communicating the advertisements and offers for sale of the counterfeit goods and making agreements to sell and supply counterfeit goods to consumers in the UK; and

4.        the ISPs had the requisite knowledge as their services were used by the operators of the target websites.

The Court of Appeal further restated that several key principles should be satisfied before making a website blocking order:

·          the relief must be necessary, effective and dissuasive;

·          it must not be unnecessarily complicated or costly;

·          it must avoid barriers to legitimate trade;

·          it must be fair and equitable and strike a “fair balance” between the applicable fundamental rights;

·          it must be proportionate;

·          it must have regard to the substitutability of other websites for the target websites; and

·          remedies should be applied in such a manner as to provide safeguards against their abuse.

By applying the aforesaid threshold conditions and key principles, the Court of Appeal affirmed the High Court’s grant of the Orders and dismissed the appeal.

Implications

It is believed that this decision would be mostly welcomed by trade mark owners in their fight against the sale of false and counterfeit goods, as it opens the door for trade mark owners to seek website blocking orders. It also has wider significance in reinforcing the court’s equitable jurisdiction to grant injunctive relief in respect of trade mark infringement matters.

Notwithstanding the good news brought about by this decision, we consider it apt to add a caveat here. The Court of Appeal recognised that the trade mark owners are generally required to bear the costs of monitoring the online infringing activities, preparing the applications for website blocking orders, and monitoring the effectiveness of such orders. Further, the trial judge had not ruled out the possibility that trade mark owners may be ordered to pay some or all of the costs of the implementation of website blocking orders in certain cases.

This may suggest that website blocking orders may not be costs effective to be pursued by the trade mark owners in every case. In fact, according to the experience in the UK with respect to such orders against copyright infringement, copyright owners used their resources to seek relief only against the most egregious infringers.