Following a recent appeal to the Court of Appeal, a decision that the English High Court can order internet service providers (ISPs) to block access to websites advertising counterfeit goods has been upheld by the Court of Appeal. Although such blocking orders for copyright infringement have been available in the UK since 2011, this was a test case by Richemont based on trade mark infringement and the courts found in their favour.
Under the EU Enforcement Directive, Member States must make remedies available to right holders to enable them to combat infringement of intellectual property rights. In addition, it includes a requirement that "right holders 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". While the Enforcement Directive was transposed into domestic law, there was no specific implementation of this latter requirement. The courts found that this specific implementation was not necessary, since the court has jurisdiction to grant such injunctions through the Senior Courts Act 1981 which states that "The High Court may by order (whether interlocutory or final) grant an injunction ... in all cases in which it appears to be just and convenient to do so."
The ISPs appealed on the basis that the ISPs had not challenged any right owned in Richemont, nor had they behaved in an unconscionable manner, or threatened to do so. The Court of Appeal disagreed, stating: "that would impose a straightjacket on the court and its ability to exercise its equitable powers which is not warranted by principle". The ISPs also appealed the judge's decision that the ISPs should bear the cost of implementing blocking orders. The Court of Appeal dismissed the ISPs' appeal, so brand owners need only bear their own costs of seeking the order, and of monitoring the website for changes following implementation of the block. The cost of implementation is to be met by the ISPs.
In order to get a blocking injunction, brand owners will need to demonstrate that:
- The users or operators of the website are infringing the brand owner's trade mark by using an identical/similar mark in the course of trade in the relevant jurisdiction in relation to identical/similar goods/services; and
- The users or operators of the website are using the ISP's services; and
- Any relevant ISP has been put on notice of their services being used to infringe the trade mark.
Assuming these three criteria are met, it must be proved to the court that a blocking injunction would:
- be necessary; and
- be effective; and
- be dissuasive; and
- not be unnecessarily complicated or costly; and
- avoid barriers to legitimate trade; and
- be fair and equitable and strike a "fair balance" between the applicable fundamental rights; and
- be proportionate; and
- be applied in such a manner as to provide safeguards against their abuse.
While this appears an extensive list, the key element is the proportionality of a blocking injunction (point 7 above). There are a number of factors which impact the proportionality of granting a blocking injunction, but the main question is whether the likely costs burden on the ISPs is justified by the likely efficacy of the blocking order and the consequent benefit to the brand owner, taking into account the alternative measures available (e.g. making domain name complaints, or asking hosting registrars to take down the websites). It would be persuasive if it can be shown that the activities of counterfeiters cause significant damage to the brand owner, and that the websites concerned have high visitor numbers. The costs burden on the ISPs of implementing a blocking order is relatively small - estimated costs to be in the region of £5,000 per website. However, if a brand owner seeks an order which requires the ISPs to implement the blocks in a way which could increase the burden on the ISPs, this could be enough tip the balance away from an order being proportionate.
The availability of website blocking orders to brand owners is now confirmed. They provide another tool in the box in the fight against counterfeiters. As future applications are unlikely to be defended by the ISPs, blocking orders need not be expensive to obtain as has previously been the case.