IP Insight: ISPs step aside on Nintendo Copyright Injunction
IP Insight is a case study series from Virtuoso Legal, the intellectual property specialists. This case concerns preparation the role of internet service providers (ISPs) in copyright infringement claims online. Nintendo Co Ltd v Sky UK Ltd & Ors  EWHC 2376 (Ch) (10 September 2019)
On 10 September 2019, Mr Justice Arnold granted Nintendo Co LTD (“Nintendo”) an injunction against the five main retail internet service providers in the UK (“ISPs”).
Virtuoso Legal’s director and head of litigation, Philip Partington was asked by LexisNexis PSL to provide a case note in relation to this. For those with access, this can be found on the LexisNexis PSL platform here.
Nintendo brought action against the ISPs in order to obtain an order blocking access by their customers to four websites that were infringing Nintendo’s IP rights (the “Websites”).
The Websites were offering devices for sale that were assisting users to circumvent the technological protection measures (“TPMs”) installed on the Nintendo Switch console. Moreover, the Websites were using Nintendo’s registered trade marks.
The Court’s decision
This decision was of particular importance as it applied the decision given by the Supreme court in Cartier International AG and others (Respondents) v British Telecommunications Plc and another  UKSC 28 (“Cartier”).
In Cartier, the Supreme Court held that that the courts could now grant website-blocking injunctions where intellectual property rights were involved.
Before deciding on granting the injunction, Mr Justice Arnold considered the chances of success of Nintendo in an action against the Websites for trade mark and copyright infringement.
Trade mark infringement
Mr Justice Arnold held that it was “beyond dispute” that the Websites were using identical signs to Nintendo’s registered trade marks in relation to identical goods. Therefore, the court had 3 questions that needed to be answered: “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(c)?“
In relation to the first question, Mr Justice Arnold stated that although the majority of the consumers will not be confused as to the origin of the goods, the way the Websites are presented “will lead a significant number of consumers wrongly to believe that these are authorised accessories.” There is also the possibility of post-sale confusion.
When answering the second question, the judge held that the fact that the Nintendo brought as evidence a test purchase was enough to prove that the Websites targeted consumers in the UK.
Since the Websites were using Nintendo’s marks dishonestly and in order to confuse a significant number of consumers, Mr Justice Arnold decided that the Websites would not benefit of any defence under Art 14(c).
Circumventing the TPMs
Nintendo submitted that sections 296ZD and 296 of Copyright, Designs and Patents Act 1988 are relevant to the circumvention of its TPMs.
We remind our readers that the above-mentioned sections offer the copyright owners further protection against parties trying to circumvent measures that protect their copyright work.
Following the CJEU’s decision in Case C-355/12 Nintendo Co Ltd v PC Box Srl [EU:C:2014:25], Mr Justice Arnold agreed with Nintendo that the law on this needs to be interpreted broadly, including “application of an access control or protection process, such as encryption, scrambling or other transformation of the work.”
The measures protecting the copyright works need to be proportionate. Looking at this, Mr Justice Arnold stated that the TPMs do not “inhibit independent development of video games for the Nintendo Switch” and therefore the TPMs are proportionate. Since the Websites target UK consumers, Nintendo could bring a claim under sections 296 and 296ZD.
Jurisdiction to grant an injunction
The court then went to consider its jurisdiction as per Cartier. Firstly, Mr Justice Arnold held that the courts would have a jurisdiction to grant an injunction not only in relation to the trade mark infringement, “but also on the basis of [Nintendo’s] claims for infringement of its rights under sections 296ZD and 296 CDPA88.”
The judge then considered the threshold conditions that need to be satisfied in order for an 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 rightsholder).”
Mr Justice Arnold held that:
“i) it is well established that the Defendants are intermediaries;
ii) for the reasons given above, the operators of the Target Websites are infringing NCL’s rights in the UK;
iii) the evidence establishes that the operators are using the Defendants’ services to do this; and
iv) the Defendants have actual knowledge of this, because they have been notified by NCL.”
Should the court grant an injunction?
Further to the threshold mentioned above, the court must also consider the following when deciding upon granting the 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.”
Mr Justice Arnold accepted Nintendo’s arguments and held that the criteria above were satisfied. The injunction is necessary to prevent substantial damage to Nintendo.
Such an injunction would be effective as already seen in Cartier, blocking injunction are an effective method to reduce traffic to the Websites.
The Defendants would have to display information in relation to the block which will dissuade users from trying to access the websites. The ISPs already have necessary technology in place in order to implement the injunction and Nintendo will bear the Defendants’ costs. There are no barriers to legitimate trade as the Websites do not carry on legitimate trade.
This case shows that ISPs are more willing to assist companies in blocking access to third party websites.
However, the court will still consider the alleged infringements in detail, and that there are a set of clear criteria that need to be proven for defendants to be compelled to do so by the Court.
The Court is, therefore, willing to grant blocking injunctions to other infringements not necessarily involving IP rights, and in many instances, ISPs are happy to cooperate.
Despite this, it is important that each case of infringement is brought on its merits and that appropriate submissions are made in each instance.