Nintendo Company, Ltd v Sky UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Arnold |
| Judgment Date | 10 September 2019 |
| Neutral Citation | [2019] EWHC 2376 (Ch) |
| Date | 10 September 2019 |
| Court | Chancery Division |
| Docket Number | Case No: IL-2019-000078 |
[2019] EWHC 2376 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)
Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Arnold
Case No: IL-2019-000078
Benet Brandreth QC (instructed by Mishcon de Reya LLP) filed written submissions on behalf of the Claimant
The Defendants were not represented
The application was considered on paper
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.
Introduction
By this claim the Claimant (“NCL”) seeks an injunction requiring the Defendants, who are the five main retail internet service providers (“ISPs”) in the United Kingdom, to take measures to block, or at least impede, access by their customers to four websites (“the Target Websites”) which advertise, distribute, offer for sale and/or sell devices that allow technological protection measures (“TPMs”) on NCL's popular Nintendo Switch games console to be circumvented. Two of the Target Websites (“the Team Xecuter Websites”) are operated by the parties responsible for developing the circumvention devices. The third and fourth (“the R4 Website” and the “Stargate Website”) are operated by UK resellers of the circumvention devices. All four Websites use NCL's trade marks.
In so far as it relies on the protection of trade mark rights as its basis, the present application is straightforwardly based on the principles set out by the Court of Appeal in Cartier International AG v British Sky Broadcasting Ltd [2016] EWCA Civ 658, [2016] ETMR 43 and refined by the Supreme Court in the same case [2018] UKSC 28, [2018] 1 WLR 3259. The application raises one novel point, however, in that NCL relies, in addition to its trade mark rights, on the statutory protection given by sections 296ZD and 296 of the Copyright, Designs and Patents Act 1988 (“ CDPA88”) against the circumvention of copyright protection measures. NCL accepts that the rights conferred by sections 296ZD and 296 CDPA88 are not themselves intellectual property rights and therefore fall outside the ambit of European Parliament and Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights (“the Enforcement Directive”), but contends that the reasoning of the Supreme Court in Cartier demonstrates that this is no obstacle to the present application.
The First Defendant consents to the application, while the other Defendants do not oppose it. As I have observed on previous applications for blocking injunctions, however, that does not absolve the Court from its responsibility to ensure that the application is well founded before granting it.
NCL and its intellectual property rights
NCL is a well-known Japanese company that designs, manufactures and sells video games consoles, accessories and software. One of its most successful products to date is a console called the Nintendo Switch. NCL has sold millions of Nintendo Switch consoles in the UK. Games for the Nintendo Switch are written both by NCL and by third parties referred to as “Authorised Developers” who operate under a programme which NCL says is cheap to join, user-friendly and benefits from extensive support from NCL. Out of the 2100 games currently available for the Nintendo Switch, 1804 were developed by Authorised Developers.
NCL is the proprietor of various relevant intellectual property rights. Both the Nintendo Switch and the games include copyright works such as the operating software (referred to as “firmware”) embedded in the Nintendo Switch, the software for the games that run on the Nintendo Switch and various other copyright works such as the sound-track, graphics, text and so forth that are included in the operating environment and games.
NCL is also the proprietor of various trade marks. For present purposes, two EU Trade Marks are relied upon (“the Trade Marks”), both of which are registered for “programs for consumer video games, memory cards storing programs for consumer video game apparatus; storage media storing programs for consumer video game apparatus; programs for handheld electronic game apparatus” in class 9 and “consumer video game apparatus; parts and accessories for consumer video game apparatus” in class 28:
i) EUTM No. 16070914 for the word mark NINTENDO SWITCH, which was registered on 4 May 2017.
ii) EUTM No. 016606873 for the figurative mark depicted below (referred to as “the Joycon logo”), which registered on 18 September 2017:
The TPMs
The TPMs employ symmetric and asymmetric encryption to protect the copyright works. In simplified outline, an authorised video game is encrypted using a unique key. Attempts to decrypt the game without the correct key will produce unintelligible results. When an authorised user purchases a game, they are supplied with the encrypted game and with a unique key known as the title key, itself encrypted using a common key, and further encrypted using a device key unique to the individual console. The title key may then be decrypted by the authorised user first using the device key then the common key, the decrypted title key is then deployed to decrypt the game itself. As well as encryption of the game software, encryption is used to create a digital signature that ensures that the source of the software being supplied is authorised. The operation of the TPMs relies on the presence of various encryption keys in the firmware in the Nintendo Switch.
Regrettably, third parties discovered that there was a way to circumvent the TPMs by installing custom firmware on the Nintendo Switch. NCL implemented a change to the Nintendo Switch to prevent this in June 2018, but there remains a very substantial number of the earlier, vulnerable Nintendo Switch consoles in circulation and there is evidence of active attempts being made to circumvent the TPMs even on the post-June 2018 Nintendo Switches.
The circumvention devices
The circumvention devices consist of the SX Pro, which comprises a USB dongle and a jig tool, together with software called SX OS. Having purchased an SX Pro from a reseller, the user downloads SX OS from the first of the Target Websites onto a blank microSD card which the user inserts into his or her Nintendo Switch together with the SX Pro. The user then goes to the second of the Target Websites and, using a licence key stored in the SX Pro, obtains a licence for SX OS, which is then operable on the user's Nintendo Switch.
The Target Websites
Copies of screenshots of the Target Websites are annexed to the Particulars of Claim. For present purposes, the following features are pertinent.
The first Target Website, which is located at the URL team-xecuter.com, is shown at pages 12–34 in Annex 2:
i) In a green bar at the top of the home page shown on page 12 are hyperlinks in yellow that link to various other parts of the website and, in the case of that entitled “SX Family Portal”, link to the second Target Website discussed below.
ii) In the middle of the home page there is a headline “SX OS v2.8 Beta Announcement” below which is a picture of the screen of a Nintendo Switch with SX OS installed on it. The central icon of three icons displayed on the screen is NCL's Joycon logo.
iii) On the left-hand side is a box headed “where to purchase” that has the SX logo on the left and proclaims on the right: “If you are looking to buy our SX Family of Team Xecuter products, then please check out our Where To Buy page, listing all of our many valued local and worldwide resellers, as below is just a short recommended list by us.”
iv) Below this on the left-hand side there are adverts for resellers in various countries such as Canada, and (on page 13) France, Germany, and Spain.
v) Turning to page 18, at the bottom of the page just above the video box, in a section headed “SX OS v2.7 Beta Announcement”, there is a statement “Of course, behind the scenes we are also still working hard on our solution for those ‘unhackable’ switches. Good progress is being made, so hang in there!”.
vi) Page 24 shows the “About Us” page. On the left is a PayPal Instant Delivery advert that offers “USA/EU shipping”. The About Us section explains:
“Team Xecuter have developed hardware and software for the Xbox Scene since 2001. The initial roots of the group were based on the Xbox homebrew hacking scene, however where we started as a small group of hardcore enthusiasts dealing with extremely gray area market products, we have now grown into a large electrical manufacturer that develops products for many companies around the world.
Our heart still lies within the games console community and we are always active in developing new and innovative products that we ourselves use in our gaming lives. Whereas we have long digressed from trading in areas that have now been made illegal in most countries over the years, our ambition is to continue to product quality items at an affordable price.”
vii) Page 27 show the “Where to Buy” page. This explains, in the middle of the page, that “On this page you will find a updated list of all our authorized resellers around the world that have available our latest Xecuter SX Family Products”. Below that is listed a reseller that is said to offer “Shipping worldwide”.
viii) Starting at page 29 is a “List of Resellers operating within Europe (choose the one best for your area for shipping rates).”
ix) On page 30, beside an Irish flag, are listings for “Stores Based in Ireland” that includes, as the first listed, the fourth Target Website (Stargate).
x) On page 32, beside a Union flag, is a...
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