The Court of Appeal of England and Wales (CA) confirmed yesterday the availability of injunctions against Internet access providers to the benefits of trade mark owners. In short, the CA had to hear appeals by five English Internet service providers (Sky, BT, EE, TalkTalk and Virgin, known as ‘the ISPs‘) against first instance orders made on 11 November and 5 December 2014 following a judgement made on 17 October 2014 and requiring “them to block or attempt to block access by their customers to certain websites (“the target websites”) which were advertising and selling counterfeit copies of the respondents’ goods”. The ISPs together represent 95% of UK broadband users. The claimants in this case own a large number of UK registered trademarks for ‘CARTIER’, ‘MONTBLANC’, ‘IWC’ and other signs and are referred to as ‘Richemont’. Back in 2014 the case was described as “a test case, which, if successful, is likely to be followed by other applications by Richemont and other trade mark owners, both here and in other countries” [6].

What are the ISPs contending? This is summed up in one paragraph:

“in broad outline, that they are wholly innocent parties and are not alleged to be wrongdoers; that the court had no jurisdiction to make any such order; that if the court did have jurisdiction, the jurisdictional threshold requirements were not satisfied in the circumstances of these cases; that the judge failed properly to identify the correct principles that should be applied in deciding whether or not to make an order; that the orders made were disproportionate having regard to the evidence before the court; and that the judge fell into error in making the orders that he did in relation to costs”. [7]

Kitchin LJ, taking the lead, dismissed the appeals. Despite a careful and thorough examination of the arguments put forward by the ISPs and the reasoning of the first instance judge, Arnold J, the CA was not convinced the first instance judge had failed to properly consider the evidence and erred in law. And given the very comprehensive analysis undertaken at first instance, the outcome is not really surprising.

A few points, however, are worth mentioning:

1. As recalled by Kitchin LJ at [56] Arnold J had “concluded that, even if the court did not have the power to grant a website blocking injunction in a trade mark case upon a purely domestic interpretation of s.37(1), this provision should nevertheless be interpreted in compliance with Article 11 in light of the Marleasing principle”, the upshot being that yes, ISPs could be the addressees of blocking injunctions. But is it true that such a result can only be explained by the impact of EU norms the effect of which is to alter (if not to distort) the domain and effects of national norms? The answer seems to be negative. Kitchin LJ is cautious to explain at [54] that “As Lord Woolf explained, the preferable analysis involves a recognition of the great width of those equitable powers, an historical appraisal of the categories of injunctions that have been established and an acceptance that pursuant to general equitable principles injunctions may issue in new categories when this course appears appropriate.” Therefore Kitchin LJ “believe[s] that this court must now recognise pursuant to general equitable principles that this is one of those new categories of case in which the court may grant an injunction when it is satisfied that it is just and convenient to do so.” [65]. This is why “Article 11 [of the Enforcement Directive] provides a further basis for developing the practice of the court in connection with the grant of injunctions” [72]. Briggs LJ, in his concurring opinion is even more explicit: “In my view, the courts could and probably would have developed this jurisdiction regardless of the requirement in the two Directives that it be made available as specified” [205].
2. Where Briggs LJ disagrees with Kitchen LJ is in respect of costs. While the latter is happy to apply the normal costs rule [re costs of the proceedings] and make the intermediary bear the costs of implementing the orders, the former states that “I would have allowed this appeal to the extent of imposing upon the applicant for a trademark blocking order the specific cost incurred by the respondent ISP in complying with that order” [211]. [It is somehow interesting, if not ironic, to justify the application of the normal costs rule by stating that “the intermediaries adopted a far from neutral position” [194] and to read the words of Jackson LJ stating that the implementation costs “are part of the price which the ISPs must pay for the immunities which they enjoy under the two Directives” [214]!]. Briggs LJ is nevertheless slightly less convincing when he states that “It may be that there are significant distinctions between the two types, not least because, but for the specific immunity conferred by the European legislation, the ISP would have been liable for breach of copyright, but would probably not, regardless of immunity, have been liable for trademark infringement” [210].
3. While there is no doubt that Kitchin LJ is on the same line as Arnold J, he tweaks the formulation of the duty that ISPs bear despite them being “wholly innocent parties”. This is what Kitchin LJ writes at [52]: “he [Arnold J] continued, it was not a long step from this to conclude that, once an ISP became aware that its services were being used by third parties to infringe an intellectual property right, it became subject to a duty to take proportionate measures to prevent or reduce such infringements even though it was not itself liable for them. I agree, subject to the qualification that the duty is more precisely characterised, I think, as a duty to take these steps to assist the person wronged when requested to do so”. [And I would add, if I could, “requested by the judiciary to do so”. The last thing that one would like to see is the transformation of the blocking injunction institution into a notice-and-block procedure! In passing the opinion of Advocate General Szpunar in Mc Fadden is to be welcome, in particular when it states that “Article 12(1)(a) to (c) of Directive 2000/31 makes the limitation of the liability of a provider of mere conduit services subject to certain conditions that are cumulative and also exhaustive. The addition of further conditions for the application of that provision seems to me to be ruled out by its express terms” [97] so that “Article 14(1)(b) of [the e-commerce Directive] [shall not] be applied mutatis mutandis to an application for a prohibitory injunction”].
4. At [78] Kitchin LJ states that:

“I accept that the orders were likely to have the effect of blocking access to the websites of third parties. But this was a matter of which the judge was acutely conscious and his orders were carefully framed to deal with it. Specifically,  the orders provide that where a server hosting a target website also hosts another website, then an ISP which is required to adopt IP address blocking measures is only required to block the target website’s IP address where Richemont or its agents certify that the third party site is engaged in unlawful activity and that, if the website has disclosed a means of contact, appropriate notice has been sent to the operator of that site informing it of, inter alia, the order, why it is appropriate for the website to be blocked and that it may move the website to a different server. In my judgment this is a regime which deals in an entirely proportionate and appropriate way with the necessary mechanics of making a blocking order effective without interfering with the legitimate interests of other operators. It does not involve any activity which is not provided for by law”.

This time Kitchin LJ does not give all the details. It seems that this was because most ISPs were using a hybrid technology relying upon Deep packet inspection (DPI)-based URL blocking, that Arnold J was able to disregard the impact on freedom of expression.

5. Finally, Kitchin LJ rejects the argument that Arnold J had failed to consider privacy and data protection implications (see my previous post on this issue here) and refers to para. 25 of the judgment of Arnold J. However, [and this a loud however] the rights to privacy and data protection are not mentioned when the ‘official’ balancing exercise is undertaken at para. 188. In addition, para. 25 is problematic in that it assumes that DPI-based URL blocking “does not involve detailed, invasive analysis of the contents of the packets in the traffic (and for that reason it is sometimes referred to Shallow Packet Inspection rather than Deep Packet Inspection)”. [URLs are contained in the payload of packets! What if the European Commission in the process of revising the ePrivacy Directive was convinced by such findings? What would happen to the principle of confidentiality of communications?]

Sophie Stalla-Bourdillon