IP, Technology & Data

Killing multiple birds with one stone? Court of Appeal affirms Brand Owners can prevent large scale on line trade mark infringements in one fell swoop.

It is good news for brand owners that today the English Court of Appeal has confirmed that they can in principle use court orders to block websites which are alleged to infringe their trademarks.

A previous decision of the High Court in favour of the trademark owner Richemont  had been appealed by the 5 ISPS included in the case – namely Sky, BT, EE, TalkTalk and Virgin. Richemont were seeking an injunction against the ISPs to force them to use technology to prevent access to 3rd party sites which were selling counterfeits of  Richemont products. The ISPs appealed arguing that the UK law did not provide for this type of remedy in a trade mark case and also that the costs to them would be disproportionate to the benefits to be gained as such sites were not used to the same extent as copyright infringing ones. Helpfully for brand owners the Court of Appeal disagreed and dismissed these arguments.

Unlike with copyright the UK law does not provide directly for this type of remedy in a trade mark case as the UK government opted not to implement the particular provision of the relevant EU Directive into national law. That provision was as follows: ‘Member States shall also ensure that rightholders 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, without prejudice to Article 8(3) of [the InfoSoc] Directive.’ It felt that there was a broader UK law provision (namely s37(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.”) which would allow for that in any event.

What did the court decide?

In this case the Court of Appeal noted that although the ISPs were not themselves infringing 3rd party IP or under any duty to take care not to so infringe the infringing websites needed the services of the ISPs to be in a position to offer for sale and sell their counterfeit goods to UK consumers. Thus ‘the ISPs are therefore inevitable and essential actors in those infringing activities.”

Even though the provision of the EU Directive in question had not been implemented in the UK the national law must be interpreted and applied consistently with it. This meant that the UK law provision as above could be used to give the court jurisdiction to deal with the application and to grant it if it was just and convenient to do so. Helpfully too the Appeal decision indicated that the courts ‘were able to adapt to new circumstances by developing their practice… where it is necessary and appropriate to do so to avoid injustice …”

What does this means for trade mark owners?

It is a good decision for trade mark owners who struggle continuously to deal with on line infringements. The intermediaries offer a route to cutting off the infringing website owners en masse and avoid the expense of having to pursue  them on an individual basis – that is on the assumption they can be traced in the first place. The ISPs were required to bear the costs of the technical steps involved in complying with the order but could choose to pass this on to their subscribers.

Will Brexit have an impact on this decision?

It is also a timely decision bearing in mind the recent Brexit vote as it confirms that there should still be scope for the UK to grant this type of order even upon Brexit as even in the absence of implementation of the Directive’s provision there is UK law which can be used to the same effect. That said these types of orders are now likely to become more popular as a result of this decision and as they do the UK Government may want to put the matter beyond doubt in the event of an actual Brexit by implementing specific and effective measures in UK legislation.

Gill Grassie

Partner at Brodies LLP
Gill is a Partner in Brodies IP and IT dispute resolution team. Her work covers the whole gamut of contentious IP, IT and technology and a wide variety of sectors as disparate as luxury brands, oil & gas and renewables, pharmaceuticals and financial services.
Gill Grassie