The English Court of Appeal upheld a lower court ruling granting trademark owners the ability to seek injunctions against internet service providers (ISPs) to block customer access to websites infringing on trademarks. The Court of Appeal agreed the lower court had jurisdiction and affirmed the threshold conditions and principles to apply in deciding whether to grant such injunctions. While the costs of implementing blocking orders remains a key factor in assessing proportionality, the courts found ISPs could be required to bear implementation costs, though future cases may reach different conclusions on cost apportionment. The decision allows trademark owners to continue seeking this form of injunction against ISPs in England.

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Online Enforcement of IP Rights by Injunctions Against ISPs: The
English Court of Appeal Speaks
Michael Bywell, Dr. Christopher Stothers, Paul A. Abbott, Rhiannon Edwards,
Kathy Osgerby
July 2016
On Wednesday 6 July 2016 the English Court of Appeal (CoA) handed down its decision in Cartier
International AG & Others -v- British Sky Broadcasting Limited & Others [2016] EWCA Civ 658
(Cartier). This was an appeal from the 2014 High Court ruling of Mr. Justice Arnold (Arnold J) in favour
of the Claimant trademark owners and his findings that the English courts had jurisdiction to grant
injunctions against internet service providers (ISPs) forcing them to take steps to block their customers
from accessing websites whose content infringed trademark rights. For reasons summarised below, the
CoA dismissed the appeal and therefore upheld Arnold J’s original decision. Thus, the door remains open
for trademark owners to seek this type of relief from the English courts.
Jurisdiction
The protection of intellectual property rights against online infringement poses significant practical
difficulties for rightsholders. It is often incredibly difficult to identify who is behind an infringing website
and where in the world they are. Even if it is possible to get a website taken down by its hosting company,
there is little to stop the infringers resurrecting the same website with a different host.
An alternative and more effective solution is for rightsholders to be able to seek injunctions against
(usually innocent) intermediaries, such as ISPs, whose services are used by the third party infringers.
European Union legislation expressly provides that EU Member States (including, for the time being, the
United Kingdom) shall:
“…ensure that rights-holders 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”.1
The UK Parliament introduced, by amendment to the Copyright, Designs and Patents Act 1988 (CDPA), a
specific provision giving the court jurisdiction to grant blocking injunctions against ISPs in relation to
websites which infringe copyright.2 This “Section 97A” jurisdiction has been invoked successfully on a
number of occasions in recent years3 and the principles to be applied in that regard are now well
established. Indeed, since the earliest cases, the ISPs have generally not opposed the making of the orders
sought by the rightsholders but have restricted themselves to negotiating the wording of the orders where
the court was minded to grant them.
However, the UK Parliament has not made any amendments to the Trade Marks Act 1994 in order to
expressly provide for blocking injunctions to be granted against ISPs in respect of trade mark
infringement. In Cartier, the rightsholders (Claimants) argued that, notwithstanding the lack of a specific
provision in that legislation, the Court does have the jurisdiction and power to grant such injunctions.
1 Article 11 of Directive 2004/48/EC (the “IP Enforcement Directive”).
2 Implementing Article 8(3) of Directive 2001/29/EC (the “Infosoc Directive”) which is in the same terms as Article 11
of the IP Enforcement Directive but specifically in relation to infringement of copyright and related rights.
3 A list of the cases is contained in paragraph 3 of Arnold J’s judgment in Cartier (2014) EWHC 3354 (Ch). The cases
cover the blocking of websites including Newzbin/Newzbin 2, The Pirate Bay, KAT, H33T, Fenopy, FirstRow Sports,
SolarMovie, TubePlus, Viooz, Megashare, zMovie, and Watch32.

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The rightsholders pointed to the Court’s general jurisdiction and power to grant injunctions “in all cases
in which it appears to be just and convenient to do so”.4 They argued that either:
(1) the Court has the necessary jurisdiction upon a purely domestic interpretation of that
provision; or alternatively
(2) the provision can and should be interpreted consistently with Article 11 of the IP Enforcement
Directive in accordance with the Marleasing principle5 thus giving the Court the necessary
jurisdiction that way.
Arnold J concluded that the Court did have jurisdiction and, after a detailed consideration of the
arguments made on appeal, the CoA agreed with Arnold J’s ultimate conclusions in this regard. Kitchin LJ
said that he was:
“satisfied that the court did have jurisdiction to make the orders in issue under s.37(1) of the
1981 Act as interpreted in light of Article 11 of the Enforcement Directive (paragraph 76).”
Threshold Conditions
The CoA agreed with Arnold J that the four “threshold conditions” necessary for the exercise of the
discretion (i.e.. to grant blocking injunctions against ISPs) for consistency with the IP Enforcement
Directive and other applicable provisions of EU law are:
(1) the ISPs must be intermediaries within the meaning of the third sentence of Article 11 of the IP
Enforcement Directive;
(2) either the users and/or the operators of the website must be infringing the claimant's trade-
marks;
(3) the users and/or the operators of the website must use the ISPs’ services to do that; and
(4) the ISPs must have actual knowledge of this.
The CoA also agreed that all four threshold conditions were satisfied on the facts of this case.
Notably the CoA also said that:
“it matters not that there was no contractual relationship between the ISPs and the operators of
the websites, or that the ISPs did not exercise any control over the particular services of which
those consumers made use. The ISPs were essential actors in all of the communications between
the consumers and the operators of the target websites (paragraph 95)”
The CoA also agreed that the orders could be granted even where they resulted in the blocking of non-
infringing sites and therefore had the potential to interfere with the legitimate businesses of third parties.
The way in which the orders were framed (i.e., requiring certification from the trademark owner that the
4 Section 37(1) of the Senior Courts Act 1981.
5 Under the Marleasing principle, the domestic court of an EU Member State must interpret its national law so far as
possible in the light of the wording and purpose of relevant EU Directives.

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site was engaged in unlawful activity and (if contact details had been provided) had been given the chance
to move the website to a different server) set out a regime which:
“dealt in an entirely proportionate and appropriate way with the necessary mechanics of
making a blocking order effective without interfering with the legitimate interests of other
operators (paragraph 78).”
Principles to Apply in Deciding Whether to Grant an Injunction
Moving on to the question of whether the Court should exercise its discretion and the principles to be
applied, the CoA noted several requirements to be satisfied (following Arnold J’s approach) before relief
could be granted in an application of this kind.
Thus the relief must: (i) be necessary; (ii) be effective; (iii) be dissuasive; (iv) not be unnecessarily
complicated or costly; (v) avoid barriers to legitimate trade; (vi) be fair and equitable and strike a “fair
balance” between the applicable fundamental rights; and (vii) be proportionate.
In addition the court should consider the substitutability of other websites for the infringing websites, and
that the remedies must be applied in such a manner as to provide for safeguards against their abuse.
Appeal Against Arnold J’s Assessment
During the appeal the ISPs challenged Arnold J’s overall conclusion that:
“In my view the key question on proportionality is whether the likely costs burden on the ISPs is
justified by the likely efficacy 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. Having given this question careful consideration, the
conclusion I have reached, after some hesitation, is that it is justified. Accordingly, I consider
that the orders are proportionate and strike a fair balance between the respective rights that
are engaged, including the rights of individuals who may be affected by the orders but who are
not before the Court."
The CoA rejected the challenge by the ISPs and agreed with Arnold J that:
 When assessing whether orders are proportionate, the court is required to consider whether
alternative measures are available which are less onerous.
 There is no requirement under Article 3(2) of the Enforcement Directive for rightsholders to
establish that the relief sought is likely to reduce the overall level of infringement of their rights;
secondly, that the applicable criterion of efficacy in considering an order is whether it will at least
discourage users from accessing the target website; thirdly, the likely efficacy of a website
blocking order in terms of preventing or impeding access to the target website is an important
factor to consider in assessing the proportionality of the order, as is the number of alternative
websites that are likely to be equally accessible and appealing to interested users.
 Under Article 3(2) remedies for intellectual property infringement must be both effective (relating
to the ISPs) and dissuasive (on third parties).
 The requirement under Article 3(1) that remedies should not be “unnecessarily complicated or
costly” extends to intermediaries against whom orders are made—with Kitchin LJ adding that:
“the measures the intermediary must take must not be unnecessarily costly or difficult, and
these are matters which must be taken into account in assessing proportionality (paragraph
122).”

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 Proportionality requires a fair balance to be struck between the intellectual property rights
guaranteed under The Charter of Fundamental Rights of the European Union and, on the other
hand, the ISPs’ freedom to conduct business and the freedom of information of internet users.
On the facts, the CoA also agreed with Arnold J’s assessment. For example, the CoA rejected the ISPs
argument that Arnold J had incorrectly interpreted certain EU legislation as meaning intermediaries are
always best placed to prevent infringement. That is not what Arnold J said - he was merely identifying
underlying policy and was not saying that it will always be proportionate to make a blocking order
directed at an intermediary:
“Indeed … the judge gave anxious consideration to whether the order sought was proportionate
and in so doing he analysed, among many other matters, the availability of alternative
measures, efficacy and cost.” (Paragraph 163)
By way of further example, the CoA also rejected the ISPs criticisms of Arnold J’s findings in relation to
alternative measures. The CoA agreed with Arnold J’s assessment that website blocking has advantages
over notice and takedown and that the key question was whether the benefits to rightsholders of website
blocking justified the costs involved, particularly the implementation costs. The CoA also rejected the
criticism made in relation to other, alternative measures.
Implementation costs
On the key question of implementation costs (i.e., the cost to the ISPs of implementing blocking orders
made), the majority of the CoA held that Arnold J was entitled to require the ISPs to bear those costs—
noting that the likely cost was an important factor in deciding the proportionality of any order sought and
that, in other cases, a different view could be taken.
Several reasons were given including that intermediaries such as ISPs make profits from the services used
by operators of the websites in question and the costs of implementing the order can therefore be
regarded as a cost of carrying on the business. ISPs also benefit from certain immunities and exceptions
under applicable EU legislation (for example, immunity from infringement claims)—which are part of the
wider scheme and carry benefits.
However Briggs LJ did not agree and took a different view on how the costs should be apportioned as
between the rightsholder and the ISP.
In his view (at paragraph 206):
“The starting point in my judgment is that the applicant is taking steps to maximise the
exploitation of a property right, in this case a trademark, and in the earlier cases copyright. In
circumstances where valuable intangible rights of this kind need to be protected from abuse by
others, I regard it as a natural incident of a business which consists of, or includes, the
exploitation of such rights, to incur cost in their protection, to the extent that it cannot be
reimbursed by appropriate orders against wrongdoers.”
And at paragraph 211:
“So, I would have allowed this appeal to the extent of imposing upon the applicant for a
trademark blocking order the specific cost incurred by the respondent ISP in complying with
that order, but not the cost of designing and installing the software with which to do so
whenever ordered. It is, according to the evidence, a modest cost but one which in principle the
rightsholder ought to defray as the price of obtaining valuable injunctive relief for the better
exploitation of its intellectual property. I consider that, while there may be exceptional cases
justifying a different order, the judge was wrong in principle in concluding that the ISP ought
usually to pay the costs of implementation.”

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Comment
The original decision of Mr. Justice Arnold was broadly welcomed by rightsholders as providing an
effective route to limit the online sale of infringing goods. Indeed, the same claimants subsequently
successfully applied for further orders against the ISPs in relation to other websites in a case heard earlier
in 2016.6
The decision of the CoA to uphold the decision of Arnold J means that blocking orders can (continue to
be) sought by brand-owners against ISPs if and when their trademarks are infringed and counterfeit
goods are sold on websites via the Internet.
This is in addition to the pre-existing and well-established blocking remedy under S.97A of the Copyright,
Designs and Patents Act 1988.
Whether orders are actually granted will depend on the facts of each case but the CoA has made it clear
that, in its view, the English courts do have jurisdiction to grant such relief.
Both Arnold J and the CoA were clear that the question of who bears the implementation costs associated
with any blocking orders granted was an important factor in assessing proportionality and that in other
cases a different view may be taken. Accordingly, it was not left on the basis that ISPs would always bear
these costs.
It is also interesting to note that on 7 July 2016 (the day after the CoA’s decision in this case) the Court of
Justice of the European Union in the matter of Tommy Hilfiger and others -v- Delta Center a.s. (Case C-
494/15, 7 July 2016) held that the IP Enforcement Directive discussed in the Cartier case applies with
equal force to a physical market-place—in that case, a market-place in Prague where counterfeit goods are
sold in market halls. The Court held that an operator letting such pitches in a marketplace is an
“intermediary” and may be subject to orders requiring it to put an end to the trademark infringements by
market-traders and take measures to prevent new infringements. Whether the sales point is physical or
online is irrelevant because the directive is not limited to electronic commerce. As in Cartier, any
injunctions must be effective, dissuasive, equitable, and proportionate.
If you have any questions about any of the topics discussed in this Advisory, please contact your Arnold & Porter
attorney or any of the following attorneys:
Michael Bywell
+44 (0)20 7786 6160
michael.bywell@aporter.com
Dr. Christopher Stothers
+44 (0)20 7786 6226
christopher.stothers@aporter.com
Paul A. Abbott
+44 (0)20 7786 6234
paul.abbott@aporter.com
Rhiannon Edwards
+44 (0)20.7786.6153
rhiannon.edwards@aporter.com
6 (2016) EWHC 339 (Ch) (a decision of HHJ Hacon).
© 2016 Arnold & Porter LLP. This Advisory
is intended to be a general summary of
the law and does not constitute legal
advice. You should consult with counsel to
determine applicable legal requirements in
a specific fact situation.

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Kathy Osgerby
+44 (0)20 7786 6253
kathy.osgerby@aporter.com