Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors

A High Court may grant a website-blocking injunction against an innocent internet service provider where a third party uses its services to infringe registered trade marks. The power under the Senior Courts Act 1981, section 37(1), is equitable and adaptable; it is not confined to wrongdoers or established categories. The threshold is that the provider is an intermediary, infringement exists, its services are used, and it has actual knowledge. The order must be necessary, effective, dissuasive, fair, proportionate and not unnecessarily costly or complicated. The court must balance intellectual-property rights against the provider’s business freedom and users’ freedom of information, considering alternatives, efficacy, lawful-user impact, costs, substitutability and safeguards. Implementation costs generally fall on the provider.

Luxury-goods trade mark owners sought orders requiring five internet service providers to block access to websites advertising and selling counterfeit Cartier, Montblanc and IWC goods. Arnold J granted the orders in the High Court in [2014] EWHC 3354 (Ch), [2014] EWHC 3915 (Ch) and [2014] EWHC 3794 (Ch).

The ISPs appealed on jurisdiction, threshold conditions, proportionality, the mechanics and costs of implementation, and the costs of the proceedings. The Open Rights Group intervened on the effect of blocking orders on third parties. The central issue was whether the court could grant a trade mark blocking order against non-infringing ISPs and, if so, what principles and costs rules applied.

1. Appeals dismissed. Kitchin LJ gave the leading judgment, with Jackson LJ agreeing. Briggs LJ agreed with the result but dissented on who should bear the particular implementation costs.
2. The court had jurisdiction under section 37(1) of the Senior Courts Act 1981, construed consistently with Article 11 of the Enforcement Directive. Equitable injunctive power is not confined to wrongdoers or to established categories. The ISPs’ lack of wrongdoing and absence of a common-law duty of care did not prevent relief. The approach was consistent with [2007] UKHL 1, [2000] QB 775, [2012] EWCA Civ 1339 and [1974] AC 133.
3. The threshold conditions were that the defendants were Article 11 intermediaries, the website operators infringed registered trade marks, the infringement used the ISPs’ services, and the ISPs had actual knowledge. An ISP’s services are used when they enable consumers to access the websites and communicate with their operators. No contractual link, control over the particular services used, proof of actual access, or physical transmission of protected material was required.
4. The orders were provided for by law and foreseeable. IP-address blocking could be used despite possible effects on third-party sites because the order contained certification and notice safeguards. The court endorsed the judge’s requirements of necessity, effectiveness, dissuasiveness, fairness, proportionality, avoidance of unnecessary cost and complexity, avoidance of barriers to legitimate trade, consideration of alternative measures and substitutability, and safeguards against abuse.
5. Proportionality required a fair balance between the trade mark owners’ intellectual-property rights, the ISPs’ freedom to conduct a business and users’ freedom of information. The judge had properly considered efficacy, alternative enforcement measures, costs, lawful users, the likely deterrent effect and the availability of substitute websites. The orders were proportionate.
6. The majority held that the ISPs should generally bear implementation costs as a cost of carrying on business, although a different order remained possible in an appropriate case. The ordinary costs rule applied to the proceedings because the ISPs had vigorously opposed the applications and the jurisdiction was not a Norwich Pharmacal procedure preparatory to proceedings against wrongdoers.

• Court of Appeal (Civil Division): appeals dismissed. [2016] EWCA Civ 658.
• High Court of Justice, Chancery Division: Arnold J granted the website-blocking orders and made costs orders in [2014] EWHC 3354 (Ch), [2014] EWHC 3915 (Ch) and [2014] EWHC 3794 (Ch).