Full case report

Cartier International AG v BSkyB (CA)

Reference [2016] EWCA Civ 658
Court Court of Appeal

Judge Lords Justices Jackson, Kitchin, and Briggs

Date of Judgment 6 Jul 2016


Summary

Injunctions – s.37 Senior Courts Act 1981 – web-blocking – trade marks – intellectual property – EU law – Norwich Pharmacal orders – costs


Facts

The Claimant rightsholders are all owners of trade marks that were being infringed by overseas websites selling counterfeited goods. After conducting test purchases to the UK, they had commenced proceedings in the Chancery Division against the UK’s major internet service providers (ISPs), seeking a web-blocking injunction preventing the ISPs consumers from visiting the infringing websites. Such injunctions are available to copyright owners in respect of copyright-infringing websites, under s.97A of the Copyright Designs & Patents Act 1988 (CDPA).

The rightsholders claimed that, although their rights were trade mark rights, they too were entitled to injunctive relief against the ISPs (notwithstanding that it was not alleged that the ISPs were wrongdoers, and even though there was no intention to pursue the counterfeiting websites in litigation) pursuant to Article 11 of the Enforcement Directive.

In a thorough judgment dated 17 October 2014 ([2014] EWHC 3354 (Ch)), the injunctions were granted by Arnold J, holding he had the power to make such orders under the general injunctive power of the High Court now to be found in s.37(1) of the Senior Courts Act 1981, and finding that it was just and convenient, and proportionate, to grant the orders sought.

The ISPs appealed, appealing also Arnold J’s decision ([2014] EWHC 3794 (Ch)) to grant further such orders under s.37(1).


Issue

(1) Does the High Court have the power & jurisdiction to grant freestanding web-blocking orders under s.37(1) Senior Courts Act 1981, against parties not alleged to have committed an actionable wrong, given the rule in The Siskina [1979] AC 210, further developed by the majority in the House of Lords case of South Carolina Insurance Co [1987] AC 24?

(2) If the answer (applying purely domestic law) is ‘No’, does the High Court have such power and jurisdiction by construing s.37(1) in accordance with the Enforcement Directive (pursuant to the Marleasing principle)?

(3) If the High Court has the power & jurisdiction to grant web-blocking orders, is such an infringement of the ISPs rights “provided by law”?

(4) Were the threshold conditions for the granting of such orders met?

(5) What principles should be applied in deciding whether the facts of a particular case merit such an order being made?

(6) Should the costs of the web-blocking regime fall on the applicant rightsholders, or on the ISPs?

(7) Did the judge err in awarding the rightsholders the costs of the action?


Held

(1)  The judge was right to hold that the High Court had the power and jurisdiction to make freestanding web-blocking orders. The practice of the courts was not immutable (citing the House of Lords in Fourie v Le Roux [2007] 1 WLR 320, and the Court of Appeal’s “publicity order” in Samsung Electronics (UK) Ltd v Apple Inc [2013] FSR 9).

(2)  Obiter: had it been necessary, the Court of Appeal would have agreed with the judge that the Marleasing principle could be relied upon to construe s.37(1) so as to conform with the UK’s obligations arising under Article 11 of the Enforcement Directive.

(3) Web-blocking orders, whether under s.97A CDPA or under s.37(1) were ‘provided for by law’ for the purposes of interference with the rights of the ISPs (under Article 16 of the Charter of Fundamental Rights of the EU) or their subscribers (under Article 11 CFREU).

(4) It was conceded that the ISPs were ‘intermediaries’ in the sense intended by Article 11 of the Enforcement Directive; that the target websites were infringing the rightsholders trade marks. The Court of Appeal agreed with the judge that the target websites were using the ISPs services to infringe (which had been disputed), and that having found such, it was conceded that the ISPs had actual knowledge of such. Therefore the threshold conditions for an order were met.

(5) The principles to be applied were: Necessity; Effectiveness; Dissuasive; Not unnecessarily complicated or costly; Avoidance of barriers to legitimate trade; Fair & Equitable; and Proportionate, having regard to the rights of third-parties and other web-users. The Court of Appeal agreed that these principles had been properly applied by the judge.

(6) The majority (Kitchin & Jackson LJJ) held that the judge did not err in imposing the costs of implementing the web-blocking regime on the ISPs themselves. This, they said, was the trade-off for the immunities provided to internet society intermediaries, such as the ISPs in this case, by EU law. Briggs LJ dissented on this point, holding that the web-blocking orders were analogous to Norwich Pharmacal or Bankers’ Trust orders, whereby a claimant could obtain information or delivery-up from an innocent person mixed up in the tortious acts of a wrongdoer, but that the general rule was that the claimant should bear the costs of the process of vindicating his rights, and there was no reason to depart from that in this case.

(7)  The Court of Appeal acknowledged that this was a test case, but agreed that the judge did not err in the exercise of his discretion as to the costs of the action.

The ISPs appeal was therefore dismissed on all grounds.


Comment

The Court of Appeal has endorsed Arnold J’s landmark judgment, and this case will have ramifications well outside of trade mark or other IP disputes. It is difficult to see that the rule in The Siskina has any operative effect any longer. In any case where the harm can be mitigated by an injunction against a relatively-neutral innocent intermediaries, rather than by seeking to sue foreign wrongdoers directly, this decision will be cited as authority for novel uses of the injunctive power of the Court.

Public and constitutional lawyers will also be interested to consider the obiter dicta that the Marleasing principle is capable of being used to construe even our ‘constitutional’ statutes.


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Instructing Solicitors

Reed Smith LLP for the appellant ISPs; Wiggin LLP for the respondent rightsholders; Preiskel & Co LLP for the Open Rights Group intervening