The English High Court ordered recently ordered several internet service providers (ISPs) to block access by their subscribers to certain websites that advertised and sold goods infringing certain registered trademarks.
The claimants (owners of a large number of UK-registered trademarks for Cartier, Montblanc, IWC and other luxury brands) sought orders requiring the ISPs to block, or at least impede, access by their respective subscribers to six named websites (although it was stated that these were the first in a line-up of 239,000 potential sites) which advertised and sold counterfeit goods and therefore infringed the trademarks. There was no suggestion that the ISPs infringed the trademarks or were liable for infringements by the operators of the websites.
The orders were in essentially the same form as those that the courts have granted in several recent cases involving copyright-infringing websites (see decisions on The Pirate Bay, Newzbin2, and other file-sharing sites). The expansion from the context of online piracy to counterfeiting is a logical development given the EU IP Enforcement Directive, which provides that EU member states must ensure that IP rights-holders can apply for an injunction against intermediaries whose services are used by a third party to infringe an IP right.
The court found that there were no real alternatives to blocking orders (such as notice and takedown, payment freezing, or de-indexing) in the context of IP infringement. An economic rationale for the blocking order is that it is economically more efficient to require intermediaries to take action to prevent infringement occurring via their services than it is to require rights-holders to take action directly against infringers.
The campaign organisation Open Rights Group intervened in the case to secure some modest safeguards focused on the position of third parties who might be affected by the blocking order. Consequently, the court required that:
- orders be subject to a “sunset clause” such that the orders would cease to have effect at the end of a defined period (provisionally two years); and
- the blocked sites contain adequate notifications informing ISP subscribers as to why access has been blocked, the parties that obtained the order, and that subscribers have the right to apply to the court to discharge or vary the order.
The decision confirms that there is a public interest in preventing IP infringement, particularly where counterfeit goods are involved, that blocking orders do not generally impair or interfere with ISPs’ freedom to carry on business, and, further, that the freedom of internet users to receive information does not extend to a right to engage in IP infringement. Implementation costs are an important but non-determinative factor in the assessment of whether the order is proportionate and such costs may prove to be an issue in time.
It remains to be seen how trademark holders will utilise this decision and how ISPs will react to it but the expansion of website blocking orders to trademark infringement will be welcomed by trademark holders, especially those with a strong brand presence who frequently run into counterfeit issues online and are wary of brand adulteration. CovBrands will continue to watch this space.