The Court of Appeal handed down its decision today in Cartier International and Others vs BSkyB and others  EWCA Civ 658. The Court upheld the High Court's decision to grant Cartier an injunction which required the major UK ISPs to block access to certain websites selling counterfeit Cartier goods. The case has important implications for brand owners seeking to police online infringement of their trade marks.
The background to the case and the judgment of the High Court were reported in our previous article, which is available here. The judgment is the first time the Court of Appeal has considered the criteria for issuing site-blocking injunctions.
The first issue to be considered was whether the Court had jurisdiction to grant site-blocking injunctions to prevent access to websites which infringed Cartier's trade marks (absent an express statutory provision along the lines of s97A CDPA, which allows for site-blocking injunctions in relation to websites which infringe copyright).
The Court of Appeal held that Article 11 of the IP Enforcement Directive provided a principled basis for extending the practice of the Court in relation to the granting of injunctions.
Effectiveness and Proportionality
At first instance, Arnold J considered in detail the principles to be applied when considering whether to grant a site-blocking injunction. The two principles which were considered in detail by the Court of Appeal were the effectiveness of the measure and proportionality.
Article 3(2) of the Enforcement Directive requires that remedies for the enforcement of IP rights must be effective. The Court of Appeal upheld the finding of the High Court that it was not necessary for the rights holder to show that the overall level of infringement would be reduced, only that the order will at least seriously discourage users from accessing the target website. Nonetheless, the injunction sought would be less likely to be proportionate if there were a large number of alternative websites which were accessible and appealing to users.
The ISPs made eight different attacks on the Judge's assessment of proportionality, none of which persuaded the Court of Appeal to overturn the first instance decision. The main argument was in relation to the costs of implementing site-blocking, which is discussed in more detail below.
The Court of Appeal was split on the question of which party should be liable for the costs of implementing the site-blocking injunction but the majority (Kitchin LJ and Jackon LJ) held that the costs should be borne by the ISPs rather than the rights holders (Briggs LJ dissenting).
It was noted that the fact that the costs of implementation are to be borne by the ISPs will be a highly material consideration in assessing the proportionality of relief sought, however it was not sufficient alone for the relief to be refused on these facts.
The Court of Appeal nonetheless endorsed the Judge's comment that the issue of costs should be kept under review in future applications, especially in light of the ISPs' concerns about the cumulative costs of implementation.
The doors are now firmly open for brand owners to seek to block access to websites selling counterfeits and engaging in other forms of trade mark infringement (albeit that target selection will be important in order to ensure that the criteria in relation to effectiveness and proportionality can be met). The same would seem to apply to other forms of IP rights protected by the Enforcement Directive, which was the primary ground relied on by the Court to justify the extension of the site-blocking injunction jurisdiction.
The Court of Appeal also approved the Judge's analysis of s37(1) Senior Courts Act 1981 as an alternative basis for the extension which, like the Court of Appeal's primary ground, was based on the Enforcement Directive. It is an open question whether other non-IP causes of action could be invoked as a basis for obtaining a site-blocking injunction, including potentially defamation, privacy or misuse of confidential information, and if so what the principled basis for such applications might be.
In relation to costs, the comments made by the Court as to keeping the position under review going forward appears to be in line with the EU-level approach to this issue; the EU Advocate General issued an Opinion in a CJEU case in April 2016 stating that ISPs should not be liable for damages and costs related to infringements of third party rights via their services. This should offer some encouragement to ISPs if these types of remedies are, as it appears, here to stay.