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New role of ISPs combatting trade mark infringement

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DiamondFourteen years after the adoption of the Directive on Electronic Commerce of 8 June 2000, relating to the liability of the ISPs within the EU, the roles of ISPs have evolved significantly and they no longer work in a solely technical capacity.

In principle, ISPs do not have any say on the content matter, they are simply offering a technical service. This task has however become required across a much broader spectrum since the emergence of Web 2.0, as users now have more opportunity to post and retrieve content on an interactive level.

ISPs which are merely acting as hosts benefit from a special status on non-responsibility. However, the legal obligations of ISPs have increased and in addition to the normal rules of liability, International and European Law have imposed on ISPs obligations to act against trade mark infringement by cooperating with the trade mark owners and the authorities.

As such, a number of orders have already been made requiring ISPs to block access to websites in copyright infringement cases.

However, the legal scenario remained somewhat unclear as did the means for action available to trade mark owners.

On 17 October 2014, the High Court delivered a judgment that is a turning point in the issue of ISPs’ responsibility for trade mark infringement. In Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2014] EWHC, the High Court made a clear step towards combating trade mark infringement rather than copyright infringement. In this judgement, the Court held that whilst the ISPs are not liable for infringements by the operators of the Target Websites, trade mark owners can seek orders against ISPs requiring them to block counterfeiters’ websites.

In this case, the claimant, Richemont, owner of a large number of UK Registered Trade Marks for inter alia, CARTIER, MONTBLANC, IWC sought orders requiring the ISPs (namely, “Sky”, “BT”, “EE”, “TalkTalk” and “Virgin” ) to block access by their respective subscribers to websites which advertised and sold counterfeit goods and infringed its trade marks.

Some of the questions raised in the present case are reviewed below:

1. Does this Court have jurisdiction to make an order of the kind sought?

Arnold J set out the principal legislative provisions which are relevant to this order and among these provisions there are:

Section 37(1) of the Senior Courts Act 1981 which provides that the Court may by order grant an injunction in all cases in which it appears to be just and convenient to do so.

Article 12.1 of Directive on electronic commerce of June 8th 2000 states that ISPs are not responsible for information transferred provided that they:

  •  are not the origin of the transmission
  • do not choose the destination of the transmission
  • do not choose or modify the information contained in the transmission.

Article 8(3) of Information Society Directive provides that Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.

Article 11 of the IP Enforcement Directive which requires that Member States shall also ensure that rightsholders 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.

The UK implemented Article 8(3) of the Information Society Directive by amending the 1988 Act to insert Section 97A, but the UK did not pass any legislation to implement the third sentence of Article 11 of the Enforcement Directive. This is despite the fact that Article 11 was intended to apply to all Intellectual Property rights, rather than just copyright. Therefore Arnold J reviewed the Court’s general power to grant injunctions as recognised by s37(1) of the 1981 Act and held that the Court would have jurisdiction to make the order sought.

2. What are the threshold conditions, if any, which must be satisfied if the Court is to make an order?

Arnold J has stated that the threshold conditions that must be satisfied in order for a website blocking injunction to be granted in a trade mark case are:

  • ISPs must be intermediaries within the meaning of the third sentence of Article 11
  • either the users and/or the operators of the website must be infringing the claimant’s trade marks
  • the users and/or the operators of the website must use the ISPs’ services to do that
  • ISPs must have actual knowledge of this

3. What are the principles to be applied in deciding whether or not to make such an order?

Arnold J held that the order sought should be granted if the following requirements were satisfied:

  • the relief must be necessary;
  • the relief must be effective;
  • the relief must be dissuasive;
  • the relief must not be unnecessarily complicated or costly;
  • the relief must avoid barriers to legitimate trade;
  • the relief must be fair and equitable and strike a “fair balance” between the applicable fundamental rights; and
  • the relief must be proportionate.

With regards to the last point on proportionality, Anorld J states that the likely cost burden on the ISPs is justified by the likely effectiveness of the blocking measures and the consequent benefit to Richemont having regard to the alternative measures which are available to Richemont and to the substitutability of the Target Websites.

Conclusion

The UK as the EU wants to base economic growth and not hamper activities on the Internet. I believe that this decision encourages cooperation in order to promote Internet safety and defend trade mark holders. The frame within which ISPs can and must take action are better defined with this decision on trade mark infringement.

It is a subtle balancing act between rights to property protection which must be measured against other fundamental rights as Article 16 of the Charter of Fundamental Rights of the European Union which recognises the freedom of enterprise and the protection of IP rights enshrined in article 17, § 2 of the Charter.

Amélie Gérard   28 October 2014


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