UK High Court Orders ISPs Block Websites Promoting Counterfeit Goods

In Cartier et al v British Sky Broadcasting Limited et al, [2014] EWHC 3354 (Ch) (decision released October 17, 2014), the High Court of Justice for England and Wales (Court) released a landmark decision that ordered a number of Internet Service Providers (ISPs) to block, or at least impede, access by their respective subscribers to certain websites that advertise and sell counterfeit goods bearing the claimants’ trade-marks. Speaking for the Court, Justice Arnold acknowledged that this application was a test case which, if successful, would likely to be followed by similar applications, both in the UK and in other countries. Justice Arnold identified five main questions for the Court to consider, which were:

1. Does the Court have jurisdiction?
2. If the Court has jurisdiction, what are the threshold conditions, if any, which must be satisfied if the Court is to make an order?
3. Are those conditions satisfied in the present case?
4. If those conditions are satisfied, what are the principles to be applied in deciding whether or not to make such an order?
5. Applying those principles, should such orders be made in the present case?

When assessing whether the Court had jurisdiction, Justice Arnold remarked that similar orders have been made requiring ISPs to block, or at least impede access to websites infringing copyright. The Court has jurisdiction to make such orders because it is granted expressly in UK copyright legislation. No such jurisdiction is granted in UK trade-mark legislation. Justice Arnold found that the Court did have jurisdiction based on section 37(1) of the Senior Courts Act 1981, which states: “[t]he 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.” Justice Arnold held that section 37(1) should be interpreted as empowering the Court to grant the injunction sought, but even if it did not, that section 37(1) should be construed with the third sentence of Article 11 of the European Parliament and Council Directive to provide the Court the jurisdiction to grant the injunction sought. Article 11 states: “[...] Member States shall also ensure that rightsholders 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 [...]”. Justice Arnold identified the threshold conditions that must be satisfied to make the orders sought and determined that those threshold conditions were satisfied. The threshold conditions were:

1. The ISPs must be intermediaries within the meaning of the third sentence Article 11;
2. The users and/or operators of the website must be infringing the claimant’s trade-mark(s);
3. The users and/or the operators of the website must be using the ISP’s services to infringe; and
4. The ISPs must have actual knowledge of the infringement.

Justice Arnold then considered seven principles to be applied by the Court when determining whether an order should be granted once the threshold conditions are met. The principles, submitted for consideration by the counsel for the ISPs, were:

1. The relief must be necessary;
2. The relief must be effective;
3. The relief must be dissuasive;
4. The relief must not be unnecessarily complicated or costly;
5. The relief must avoid barriers to legitimate trade;
6. The relief must be fair and equitable and strike a “fair balance” between the applicable fundamental rights; and
7. The relief must be proportionate.

After considering the principles above, Justice Arnold granted orders requiring the ISPs block, or at least impede, access by their respective subscribers to certain websites which infringed the claimant’s trade-marks. The orders included a number of safeguards to ensure that the orders were properly targeted and did not inadvertently impact users of other, lawful websites.