Cartier International AG v British Sky Broadcasting

JurisdictionEngland & Wales
JudgeMr Justice Arnold,The Hon Mr Justice Arnold
Judgment Date17 October 2014
Neutral Citation[2014] EWHC 3354 (Ch)
Docket NumberCase No: HC14C01382
CourtChancery Division
Date17 October 2014
Between:
(1) Cartier International AG
(2) Montblanc-Simplo GmbH
(3) Richemont International SA
Claimants
and
(1) British Sky Broadcasting Limited
(2) British Telecommunications Plc
(3) EE Limited
(4) Talktalk Telecom Limited
(5) Virgin Media Limited
Defendants

and

Open Rights Group
Intervener

[2014] EWHC 3354 (Ch)

Before:

The Hon Mr Justice Arnold

Case No: HC14C01382

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building

Fetter Lane, London, EC4A 1NL

Adrian Speck QC and Benet Brandreth (instructed by Wiggin LLP) for the Claimants

Charlotte May QC and Jaani Riordan (instructed by Reed Smith LLP) for the Defendants

David Allen Green of Preiskel & Co LLP made written submissions on behalf of the Intervener

Hearing dates: 25–26 September 2014

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

The Hon Mr Justice Arnold Mr Justice Arnold

Contents

Topic

Paragraphs

Introduction

1–7

Evidence

8–11

Factual background

12–71

The problems of counterfeit goods and online trade mark

12–14

Infringement Richemont and the Trade Marks

15–16

The Target Websites

17–24

Blocking techniques in general

25

Circumvention techniques

26–27

The Internet Watch Foundation's blocking regime

28–29

Sections 17 and 18 of the Digital Economy Act 2010

30–32

Parental control services

33–37

The ISPs' blocking systems

38–51

Sky

39–41

BT

42–45

EE

46–47

TalkTalk

48–49

Virgin

50–51

Section 97A orders obtained to date

52–57

Implementation of the section 97A orders by the rightholders

58–60

Implementation of the section 97A orders by the ISPs

61–65

Sky

61

BT

62

EE

63

TalkTalk

64

Virgin

65

Problems encountered as a result of section 97A orders

66–68

Applications for further section 97A orders

69–71

The orders sought

72

The legal context

73–86

Senior Courts Act 1981

74

Trade Marks Directive and CTM Regulation

75

Domestic implementation of the Trade Marks Directive

76

E-Commerce Directive

77–78

Domestic implementation of the E-Commerce Directive

79

Information Society Directive

80

Domestic implementation of the Information Society Directive

81

The Enforcement Directive

82–83

Domestic implementation of the Enforcement Directive

84

The Charter of Fundamental Rights of the European Union

85–86

Relevant principles of interpretation

87–91

EU directives do not have horizontal effect

88

Interpretation of domestic legislation in the context of EU directives

89

Interpretation of EU directives

90–91

Jurisdiction

92–138

The issue

92–93

Domestic interpretation of section 37(1)

94–111

Implementation of Article 8(3) of the Information Society Directive and Article 11 of the Enforcement Directive

112–120

Interpretation of section 37(1) in accordance with the third sentence

121–132

of Article

11

Provided for by law?

133–138

Threshold conditions for the exercise of the jurisdiction

139–141

Are the threshold conditions satisfied in the present case?

142–157

Are the ISPs intermediaries?

142

Are the operators of the Target Websites infringing the Trade Marks?

143–146

Do the operators of the Target Websites use the ISPs' services to infringe?

147–156

Do the ISPs have actual knowledge of this?

157

Principles to be applied

158–191

Necessary

160–162

Effective

163–176

Dissuasive

177–179

Not unnecessarily complicated or costly

180–181

Avoidance of barriers to legitimate trade

182

Fair and equitable and fair balance

183

Proportionate

184–190

Safeguards against abuse

191

Application to the present case

192–261

The comparative importance of the rights engaged and the justifications for interfering with those rights

193–196

Availability of alternative measures

197–216

Action against the operators

198

Notice and takedown by hosts

199–204

Payment freezing

205–207

Domain name seizure

208–209

De-indexing

210–215

Customs seizure

216

Conclusion

217

Efficacy

218–237

The section 97A orders

220–236

The present case

237

Dissuasiveness

238

Costs

239–253

Impact on lawful users

254–257

Substitutability

258–259

Overall assessment of proportionality

260–261

Safeguards against abuse

262–265

Overall conclusion

266

Introduction

1

The Claimants ( collectively, "Richemont") are the owners of a large number of United Kingdom Registered Trade Marks for CARTIER, MONTBLANC, IWC and other brands ("the Trade Marks"). The Defendants ("Sky", "BT", "EE", "TalkTalk" and "Virgin", collectively "the ISPs") are the five main retail internet service providers in the United Kingdom. Between them, they have a market share of some 95% of UK broadband users. By this application Richemont seek orders requiring the ISPs to block, or at least impede, access by their respective subscribers to six websites which advertise and sell counterfeit goods ("the Target Websites"). Richemont contend that the operators of the Target Websites thereby infringe the Trade Marks. For the avoidance of doubt, there is no suggestion that the ISPs have infringed the Trade Marks or are liable for infringements by the operators of the Target Websites.

2

The application raises five main questions. First, does this Court have jurisdiction to make an order of the kind sought? Secondly, if the Court has jurisdiction, what are the threshold conditions, if any, which must be satisfied if the Court is to make an order? Thirdly, are those conditions satisfied in the present case? Fourthly, if those conditions are satisfied, what are the principles to be applied in deciding whether or not to make such an order? Fifthly, applying those principles, should such orders be made in the present case?

3

Over the last three years, a series of orders have been made requiring the ISPs to block, or at least impede, access to websites pursuant to section 97A of the Copyright, Designs and Patents Act 1988 ("the 1988 Act"), which implements Article 8(3) of European Parliament and Council Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society ("the Information Society Directive"). I have considered the principles to be applied to applications of that kind in a series of judgments: Twentieth Century Fox Film Corp v British Telecommunications plc [2011] EWHC 1981 (Ch), [2012] Bus LR 1471 (" 20C Fox v BT"); Twentieth Century Fox Film Corp v British Telecommunications plc (No 2) [2011] EWHC 2714 (Ch), [2012] Bus LR 1525 (" 20C Fox v BT (No 2)"); Dramatico Entertainment Ltd v British Sky Broadcasting Ltd [2012] EWHC 268 (Ch), [2012] 3 CMLR 14 (" Dramatico v Sky"); Dramatico Entertainment Ltd v British Sky Broadcasting Ltd (No 2) [2012] EWHC 1152 (Ch), [2012] 3 CMLR 15 (" Dramatico v Sky (No 2)"); EMI Records Ltd v British Sky Broadcasting Ltd [2013] EWHC 379 (Ch), [2013] ECDR 8 (" EMI v Sky"); Football Association Premier League Ltd v British Sky Broadcasting Ltd [2013] EWHC 2058 (Ch), [2013] ECDR 14 (" FAPL v Sky"); and Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd [2013] EWHC 3479 (Ch), [2014] ECDR 7 (" Paramount v Sky"). Since the last of those judgments, Henderson J has considered the impact of the judgment of the Court of Justice of the European Union in Case C-466/12 Svensson v Retriever Sverige AB [EU: C:2014:76] in Paramount Home Entertainment International Ltd v British Sky Broadcasting Ltd [2014] EWHC 937 (Ch) (" Paramount v Sky 2").

4

It is convenient to note at this stage three points about the cases under section 97A. The first is that neither the ISPs nor the rightholders have appealed against any aspect of the orders made in those cases, including those aspects which deal with the costs of the applications and the costs of implementing the orders. The second is that, since 20C Fox v BT and 20C Fox v BT (No 2), the ISPs have not opposed the making of the orders sought by the rightholders, but have restricted themselves to negotiating the wording of the orders if the Court is minded to grant them. Thirdly, in consequence, most of the orders have been granted after consideration of the applications on paper.

5

The present application raises different considerations, for two main, linked reasons. The first is that the present case involves an attempt to combat trade mark infringement rather than copyright infringement. The second is that there is no statutory counterpart in the field of trade marks to section 97A of the 1988 Act. In addition, the arguments raised on the present application have differed to some extent from those raised in 20C Fox v BT. For all these reasons, I have endeavoured to approach this application afresh. Inevitably, however, much of what was said in the judgments listed in paragraph 3 above is relevant. In addition, the experience that has been gained as a result of the orders granted in those cases is also relevant, as I shall explain.

6

I was informed by counsel that, so far as they and their professional and lay clients are aware, this is the first occasion on which an application for a website-blocking order against internet service providers in order to combat trade mark infringement has been made anywhere in the European Union, with the possible exception of the Danish case of Home A/S v Telenor A/S (Retten på Frederiksberg, 14 December 2012). It is a test case, which, if successful, is likely to be followed by other applications by Richemont...

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