Blocking Injunctions - Nintendo Co Ltd v Sky UK Ltd and Others

Nintendo's head office in Japan

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Source Wikipedia Nintendo

Jane Lambert

High Court, Chancery Division (Mr Justice Arnold) Nintendo Co. Ltd. v Sky UK Ltd and others  [2019] EWHC 2376 (Ch)

This was a claim by the famous consumer electronics and video games company, Nintendo Company Limited, for an order requiring Sky UK Ltd and four other internet service providers to block, or at least impede, access by their customers to four websites that advertise, distribute, offer for sale and/or sell devices that circumvent Nintendo's technical protection measures for its game consoles.

As all the target websites used Nintendo's trade marks in their advertising, Nintendo based its application in part on principles established by the Court of Appeal in Cartier International AG and others v British Sky Broadcasting Ltd and others [2017] Bus LR 1, [2016] ETMR 43, [2016] Info TLR 1, [2017] Bus LR 723, [2016] EWCA Civ 658, [2017] 1 All ER (Comm) 507, [2016] EMLR 23, [2017] 1 All ER 700, [2016] WLR(D) 389, [2017] RPC 3 and refined by the Supreme Court in  Cartier International AG and others v British Telecommunications Plc and another  [2018] 1 WLR 3259, [2018] WLR 3259, [2018] UKSC 28, [2018] 4 All ER 373, [2018] ETMR 32, [2018] EMLR 22, [2018] WLR(D) 354, [2018] RPC 11, [2018] ECC 29, [2018] Bus LR 1417, [2018] ECDR 16 which I discussed in Injunctions against ISPs: The Cartier Appeal 18 July 2016 NIPC Law and  Injunctions against ISPs - the Supreme Court decides who pays the Cost of Compliance: Cartier International and Others v BT and Others 17 July 2018 NIPC Law. However, it also relied on s .296ZD and s.296 of the Copyright Designs and Patents Act 1988 as amended which are not strictly intellectual property rights and therefore fall outside the protection afforded by Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights ("the Enforcement Directive").

The application was made on paper and there were no representations from the ISPs. It was a far cry from Twentieth Century Fox Film Corp and others v British Telecommunications Plc [2012] 1 All ER 806, [2012] Bus LR 1471, [2011] EWHC 1981 (Ch), [2011] RPC 28 and Twentieth Century Fox Film Corporation and Others v British Telecommunications Plc [2011] EWHC 2714 (Ch), [2012] 1 All ER 869, [2012] Bus LR 1525 which required a total of 4 hearing days and the services of 3 distinguished silks and 2 junior barristers including an intervention from me.  The application was considered by Mr Justice Arnold.

At the 14th session of the Advisory Committee on Enforcement which I discussed in Another Side of the WIPO 5 Sept 2019, NIPC News delegates learned that many if not most countries provided blocking orders similar to those granted in the BT case.  Indeed Prof. Frederick Mostert had discussed blocking orders extensively in his contribution to our joint Study on Intellectual Property Enforcement Measures, Especially Anti-piracy Measures in the Digital Environment between paragraphs 69 and 79. He noted that blocking orders were an administrative rather than a judicial remedy in many countries.  In a Q & A that followed our presentations, I commented that the procedure even in countries that required an application to a judge was essentially administrative as the owners of the websites were not even joined to the proceedings and the applications were rarely opposed by the ISPs.

Mr Justice Arnold appears to have had that thought in mind at paragraph [3] of his judgment when he said:

"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."

In discharging that responsibility the judge addressed the following questions:

"First, is the use liable to affect one of the functions of the Trade Marks? Secondly, do the Target Websites target consumers in the UK? Thirdly, do the operators of the Target Websites have a defence under Article 14  (1) (c)?"

Nintendo argued successfully that the target websites infringed two of its European Union trade marks under art 9 (2) (a) and (c) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark OJ L 154, 16.6.2017, p. 1–99. The use of the English language and the appearance of union flags on one of the websites answered the second question. As the websites distributed circumvention devices they could not meet the honest practices in industrial or commercial matters of art 14 (2).

S.296ZD of the 1988 Act provides:

"(1) This section applies where—
(a) effective technological measures have been applied to a copyright work other than a computer program; and
(b) a person (C) manufactures, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire, or has in his possession for commercial purposes any device, product or component, or provides services which—
(i) are promoted, advertised or marketed for the purpose of the circumvention of, or
(ii) have only a limited commercially significant purpose or use other than to circumvent, or
(iii) are primarily designed, produced, adapted or performed for the purpose of enabling or facilitating the circumvention of, those measures.

(2) The following persons have the same rights against C as a copyright owner has in respect of an infringement of copyright—
(a) a person—
(i) issuing to the public copies of, or
(ii) communicating to the public,
the work to which effective technological measures have been applied;
(b) the copyright owner or his exclusive licensee, if he is not the person specified in paragraph (a); and
(c) the owner or exclusive licensee of any intellectual property right in the effective technological measures applied to the work."

The judge considered the judgment of Mr Justice Floyd (as he then was) on s.296ZD in Nintendo Company Ltd and Another v Playables Ltd and Another  [2010] ECDR 14, [2010] FSR 36, [2011] Bus LR D89, [2010] EWHC 1932 (Ch) and the judgement of the Court of Justice of the European Union on art 6 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society OJ L 167, 22.6.2001, p. 10–19 in Case C-355/12 Nintendo Co Ltd v PC Box Srl EU:C:2014:25, [2014] EUECJ C-355/12, ECLI:EU:C:2014:25.  The Court of Justice had held in Nintendo Co Ltd v PC Box Srl that technical protection measures had to be proportionate to the aim of protecting copyright, that is to say, "suitable to achieve that objective and must not go beyond what is necessary for this purpose".Although the judge acknowledged that there could be legitimate uses for the circumvention devices they were marketed as a way of getting round Nintendo's measures to prevent unlicensed use of its software. The judge was satisfied that the measures were proportionate for the following reasons. First, the target website owners or operators fell within s.296ZD (1) (b). Secondly, s..296ZD (2) (a) applied to Nintendo. Thirdly, the target websites were directed towards consumers in the UK.

S.296 of the Copyright, Designs and Patents Act 1988 provides:

"(1) This section applies where--
(a) a technical device has been applied to a computer program; and
(b) a person (A) knowing or having reason to believe that it will be used to make infringing copies--
(i) manufactures for sale or hire, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, advertises for sale or hire or has in his possession for commercial purposes any means the sole intended purpose of which is to facilitate the unauthorised removal or circumvention of the technical device; or
(ii) publishes information intended to enable or assist persons to remove or circumvent the technical device.
(2) The following persons have the same rights against A as a copyright owner has in respect of an infringement of copyright--
(a) a person--
(i) issuing to the public copies of, or
(ii) communicating to the public,
the computer program to which the technical device has been applied;
(b) the copyright owner or his exclusive licensee, if he is not the person specified in paragraph (a);
(c) the owner or exclusive licensee of any intellectual property right in the technical device applied to the computer program."

Mr Justice Floyd had also considered s.296 as well as s.296ZD in Nintendo Company Ltd and Another v Playables Ltd and Another.   Although it was questionable whether knowledge had to be shown as there was no it was not required in the article of the directive that the section implemented, His Lordship was satisfied that the website owners or operators did know or had reason to believe that their device would be used to infringe copyright. The other considerations that applied to this section were the same as for s.296ZD.

Mr Justice Arnold concluded that Nintendo was entitled to relief under s.296ZD and s.296 of the Copyright Designs and Patents Act 1988 as well as for infringement of its trade marks.  In Cartier, the Court of Appeal had held that there are four threshold conditions which need to be satisfied in order for a website-blocking injunction to be granted:
"i) the defendants are intermediaries within the meaning of Article 11 of the Enforcement Directive,
ii) the users and/or operators of the website are infringing the claimants' IP rights,
iii) those users and/or operators are using the defendants' services to infringe; and
iv) the defendants have actual knowledge of this (which may be as a result of being notified by the rightholder)."
The learned judge was satisfied that these conditions had been satisfied for the following reasons:

• It was well established that the ISPs are "intermediaries";
• The operators of the target websites were infringing Nintendo's rights in the UK;
• The evidence established that the operators were using the defendants' services to do this; and
•  The ISPs had actual knowledge of infringement because they gad been notified by Nintendo.

The Court of Appeal in Cartier had laid down the following criteria for deciding whether to grant a blocking injunction:

"The injunction must be (i) necessary, (ii) effective, (iii) dissuasive, (iv) not unduly costly or complicated, (v) avoid barriers to legitimate trade, (vi) a fair balance between the fundamental rights engaged, (vii) proportionate and (viii) safeguarded against abuse."

The judge instructed himself that proportionality was the key factor "since consideration of the other factors feeds into the proportionality analysis."  At paragraph [43] of his judgment, he satisfied himself that each and every one of those criteria had been met:

"i) The injunction sought is necessary to prevent, or at least reduce, substantial damage to NCL. It appears that substantial sales of the circumvention devices have been made in the UK, that substantial quantities of pirated games have been downloaded in the UK and installed on Nintendo Switches using the circumvention devices and that NCL has sustained significant losses as a result. No alternative measures are realistically available to NCL since NCL has been unable to identity the operators of the Target Websites, who may well be abroad. Cease and desist letters sent by NCL's solicitors have been ignored, except that both the R4 and Stargates Websites changed their URLs following the sending of the letters. Take-down requests to the relevant hosting providers, to the extent that these can be identified, have likewise been ignored. Take-down requests sent by NCL to platforms such as YouTube, Amazon and eBay are actioned by the platforms, but the relevant listings are simply replaced by new ones.
ii) The evidence in the Cartier case showed that, although quite easily circumvented, blocking injunctions are effective in reducing traffic to the target websites.
iii) Similarly, blocking injunctions are dissuasive. Moreover, the Defendants are required to display information about the block, which helps to dissuade users.
iv) Blocking injunctions are not difficult for the Defendants to implement. On the contrary, they already have the necessary technology. Moreover, as a result of the decision of the Supreme Court in Cartier, NCL must bear the Defendants' incremental costs of implementing the injunction, and so there is no additional cost for the Defendants.
v) The injunction sought by NCL will have no impact on legitimate trade, because none of the Target Websites appears to carry on any legitimate trade.
vi) The injunction strikes a fair balance between protecting NCL's rights and the rights engaged, because the Defendants' right to carry on business is unaffected and the public has no legitimate interest in being informed about or purchasing circumvention devices whose sole purpose is to circumvent NCL's TPMs and infringe its rights to NCL's significant detriment.
vii) For the reasons given above, the injunction is proportionate.
viii) The order proposed by NCL contains the usual safeguards adopted in previous cases. "

At paragraph [44] he indicated that he would make the order requested.

The importance of this case is that it greatly extends the scope for which blocking orders may be granted. It also systematizes the process for granting such orders making it possible for non-judicial officials to grant blocking orders subject, of course, to an appeals process or at least judicial review. That would greatly benefit rights holders of more slender resources that Nintendo.

Anyone wishing to discuss this article or enforcement generally should call me on 020 7404 5252 or send me a message through my contact form.