Cartier v ISPs

Cartier and Others v BSkyB and Others [2016] EWHC 339 (Ch) is an ongoing legal case revolving around the question of whether patent owners are able to apply for injunctions requiring that ISPs block access to websites selling trade mark infringing goods in the same way that copyright owners can apply for site-blocking injunctions.

With pro bono help from David Allen Green, ORG intervened in the case in an attempt to encourage the court to require additional safeguards and transparency if such blocks are ruled to be legal.

ORG have been thanked for their submissions, which have had a substantial impact on the case so far.

In particular, the court agreed with ORG that greater safeguards against abuse were needed and that blocking orders, if granted, should be set to expire after 2 years to ensure they are being regularly checked for validity.

Basics

French jeweller Cartier sought ruling that it could get a blocking injunction issued against sites that were selling counterfeit versions of its goods in violation of trade marks it owned.

Parties

Claimants	Respondents
Cartier International AG Montblanc-Simplo GmbH Richemont International SA	BSkyB BT EE TalkTalk Virgin Media Open Rights Group (Intervening)

Timeline

Date	Event
17 Oct 2014	Arnold J delivers high court verdict, affirming that Cartier can seek such a blocking injunction.
06 Jul 2016	Court of Appeal upholds decision and confirms that Cartier can seek an injunction to block counterfeit goods sites.
Feb 2017	BT and EE given permission to appeal the Court of Appeal decision in part.

Primary Issues

Power to request a blocking injunction is already available to copyright owners under s.97 CDPA 1988

• This section was added in 2003 to implement Article 8(3) of the EU InfoSoc Directive into UK law.

Case arose because, although the UK Government implemented Article 8(3) InfoSoc Directive into law, they ignored the Article 11 Enforcement Directive, which states:

"Member State shall also ensure that rightholders are in a position apply for an injunction against intermediaries whose services are used by a third party to infringe on an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC."

The Government justified its decision not to take any action to implement the more general Article 11 rule into law by referring to s.37(1) Senior Courts Act, which states:

"The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so."

High Court

At the High Court, Mr Justice Arnold praised ORG for their intervention and adopted the key ORG submission that such orders should always contain safeguards against abuse. He also adopted ORG’s proposal for such safeguards.

In particular the judge:



• accepted ORG’s submission that the orders should be required to have safeguards against abuse, and that this was a requirement which had been missed by the other parties;
• adopted ORG’s concrete proposals about the information to be included on landing pages and “sunset clauses” as safeguards against abuse; and
• thanked ORG for its “brief, moderate and helpful” written submissions, which were “sensibly” not opposed by the other parties.



Court of Appeal

Costs

Kitchin LJ, in delivering the opinion of the Court of Appeal, noted that operators of infringement sites require ISPs in order to offer their counterfeit products, and that “the ISPs are therefore inevitable and essential actors in those infringing activities”.

He also noted that Arnold J (in the High Court) “was entitled to require the ISPs to bear the costs of the implementation of the orders in issue”. He noted that ISPs could either bear the costs themselves, or pass them on to their subscribers in the form of higher subscription charges.

Briggs LJ dissented, suggesting that “the cost burden attributable to the implementation of a particular blocking order should fall upon the rightholder making the application for it”.

Briggs LJ agreed that both the Enforcement Directive and InfoSoc Directive provided that rightholders should have the possibility of applying for an injunction against an intermediary who either carries a third party's infringement of a protected work in a network (in copyright cases) or whose services are being used by a third party to infringe the rightholder's industrial property right (in relation to trade marks). However, in both cases the conditions and modalities relating to such injunctions, or the conditions and procedures relating to such injunctions should be left to the national law of the Member States.

Effectively, with relation to the above, in the case of orders against innocent third parties, the law in England and Wales has evolved so to ensure that a standard condition or 'modality' for the grant of an injunction is that the cost reasonably incurred by the innocent respondent should be reimbursed by the applicant. Briggs LJ notes:

"[England and Wales is] a jurisdiction with existing well-recognised conditions or modalities, one of which [is] that the victim indemnify the innocent party for its cost of complying with the court's order."

According to the IPKat blog's commentary:

"The EU law framework is in fact fundamentally silent regarding who should bear the costs of injunctions against intermediaries. Even the ambiguous wording of Article 14 of the Enforcement Directive ("Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this.") does not seem to relate directly to injunctions."

Supreme Court Appeal

In Feb 2017, BT and EE were granted permission to appeal on the following ground:

That the Court was wrong to hold that the Appellants as innocent parties, should be required to bear the costs of the blocking injunctions. To the contrary, as innocent parties who are discharging an equitable duty to assist, the Appellants should be indemnified against all costs, expenses and liabilities.

BT and EE have not been granted permission to appeal the primary judgment of the case – i.e. That such blocking orders are legitimate and the right of entities like Cartier to demand them.