Cartier International Ltd & Anor v British Telecommunications Plc & Ors [2016] EWHC 339 (Ch)

Case No HC 2015 004980[2016] EWHC 339 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23/02/2016
Before
HIS HONOUR JUDGE HACON(SITTING AS A JUDGE OF THE HIGH COURT)
Between
CARTIER INTERNATIONAL LIMITEDClaimantsMONTBLANC-SIMPLO GmbHClaimantBRITISH TELECOMMUNICATIONS PLCDefendantsEE LIMITEDDefendantSKY UK LIMITEDDefendantTALKTALK TELECOM LIMITEDDefendantVIRGIN MEDIA LIMITEDDefendant
Benet Brandreth (instructed by Wiggin LLP) for Claimants for The Defendants did not appear and were not representedHearing Hearing date: 16 February 2016
JudgmentJudge Hacon :Introduction
[1]This is an application for a website-blocking order. The claimants and defendants are for all practical purposes the same as those in Cartier International AG v British Sky Broadcasting Limited [2014] EWHC 3354 (Ch); [2015] R.P.C. 7, which I will call ‘Cartier I’. A similar order was sought in that action.[2]The claimants own registered trade marks which they use for the advertising and sale of their luxury goods, such as CARTIER for watches and MONTBLANC for pens. The defendants are the five main internet service providers (‘ISPs’) in the United Kingdom.[3]The claimants seek an injunction requiring the defendants to block access to certain websites (‘the Target Websites’). The claimants say that these websites are being used by their operators to infringe the claimants’ trade marks by marketing goods under those marks, typically cheap copies of the claimants’ goods. In fact, the operators often make no bones about selling fakes. As in Cartier I there was no suggestion that the defendant ISPs were committing any acts of infringement.[4]Benet Brandreth appeared for the claimants. The defendants neither appeared nor were represented but I had the benefit of a written note from Jaani Riordan of counsel on behalf of the defendants. This note stated that the defendants adopted a neutral stance but wished to assist the court by pointing out a number of factors which the defendants believed to be relevant to questions of jurisdiction and proportionality arising in the application.[5]The application was made by an Application Notice dated 3 December 2015. The relief sought was final, though not for summary judgment, and it was not ancillary to any substantive proceedings, whether for trade mark infringement by owners of websites or anything else. No Particulars of Claim have been served. When I put it to him, Mr Brandreth accepted that the application was apparently for final judgment on the relief sought in the claim form, to be decided on written evidence. No objection to this was raised by the defendants in their note.[6]Mr Brandreth submitted that all the relevant points of jurisdiction and discretion had been decided by Arnold J in Cartier I and although every case must turn on its facts, the facts of this application were not materially distinguishable from those of CartierI. Moreover, to the extent that Arnold J had raised doubts about the comprehensiveness of the evidence filed in Cartier I, the claimants had plugged those gaps in this application. It was therefore straightforward and should be allowed.[7]The application was supported by evidence, mostly in the form of a witness statement from Richard Graham who is Head of Digital in the IP department of Richemont International Limited, one of the group of companies to which the claimants belong.[8]I was referred by Mr Brandreth to five judgments from EU national courts and one from the Court of Appeal for British Columbia post-dating Cartier I. He submitted that none of them cast doubt on the reasoning in Cartier I. I agree. I was also shown the judgment of Snowden J in The Football Association Premier League Limited v Wells [2015] 3910 (Ch). This concerned an order for disclosure of suppliers of infringing goods in an application for judgment in default rather than a website-blocking order, but I agree that it is consistent with Cartier I.[9]Arnold J gave the defendants permission to appeal in Cartier I and I was told that the appeal is due to be heard on about 13April 2016. I think the correct way forward is for me to apply the principles set out in Cartier I. In the event that those principles are modified by the Court of Appeal my conclusion in this application is liable to be open to objection. Both sides submitted that whatever the outcome, I should give permission to appeal.

Cartier I

[10]Cartier I is a comprehensively reasoned judgment. I shall try to summarise the main points.[11]Before that case applications for website-blocking orders had only arisen in copyright actions, pursuant to s.97A of the Copyright, Designs and Patents Act 1988 which implemented art.8(3) of Council Directive 2001/29/EC on the harmonization of copyright and related rights in the information society (‘the Information Society Directive’). There is no equivalent statutory provision outside the field of copyright and related rights, so in Cartier I Arnold J had to begin from first principles with regard to jurisdiction. Jurisdiction and the permissible exercise of jurisdiction Domestic English law

Jurisdiction and the permissible exercise of jurisdiction

[12]Arnold J reviewed a number of authorities on the court’s jurisdiction to grant an injunction and concluded that the court has unlimited power to grant an injunction against a defendant over whom the court has jurisdiction. The power is derived from that of the former Court of Chancery, made available to all judges of the senior courts pursuant to the Supreme Court of Judicature Act 1873. The power is now confirmed by, though strictly does not derive from, s.37(1) of the Senior Courts Act 1981, see in particular Fourie v Le Roux [2007] UKHL 1; [2007] 1 WLR 320, per Lord Scott at [25].[13]Such jurisdiction is to be distinguished from the equitable principles according to which the jurisdiction may be exercised. The latter come from judicial precedent and rules of the court, see Fourie at [30] and a summary of the relevant principles in Spry, (9th ed., at 342-343) (discussed at paras. [94]-[102] of Cartier I).[14]The first of the principles identified in Spry is that an injunction may issue to protect any legal right whatsoever, subject to a statutory provision to the contrary. The grant of the injunction need not be against the infringer of the right to be protected, (paras. [102] and [105] of Cartier I).[15]Arnold J drew an analogy with Norwich Pharmacal Co v Excise Commissioners [1974] AC 133 and concluded (at [106]):
“…once an ISP becomes aware that its services are being used by third parties to infringe an IP right, it becomes subject to a duty to take proportionate measures to prevent or reduce such infringements even though it is not itself liable for infringement.”
Since it will become relevant, I should add that Arnold J subsequently emphasised that the analogy with Norwich Pharmacal should not be pushed too far. He had not suggested that the jurisdiction for a website-blocking injunction was derived from the Norwich Pharmacal jurisdiction, but instead directly from s.37(1), see Cartier International AG v British Sky Broadcasting Limited [2014] EWHC 3794 (Ch), at [7]-[9].[16]The equitable principles according to which injunctions may be granted are not immutable. An example of development in this area of law was provided by the Court of Appeal in Samsung Electronics (UK) Limited v Apple Inc [2012] EWCA Civ 1339; [2013] F.S.R. 9, in which the Court’s power under s.37(1) of the Senior Courts Act 1981 was exercised to require Apple, the unsuccessful claimant in a design infringement action, to publicise on its website the judgment of the Court of Appeal and that at first instance. Arnold J pointed out (at [109]):
“…Apple had not infringed any legal or equitable right of Samsung’s. Nor did the Court of Appeal find that Apple had acted unconscionably. Rather, the essence of the Court’s reasoning was that, having created commercial uncertainty in the market, Apple had come under a duty to take reasonable steps to correct that state of affairs. That was a duty which could be enforced by the grant of an injunction.”
[17]Arnold J concluded that as a matter of purely domestic English law, the equitable principles governing the exercise of the jurisdiction under s.37(1) are sufficiently flexible to allow the court to grant a website-blocking injunction to protect trade mark rights (at [111]).

Community law

[18]Arnold J next considered Community law and in particular art.11 of Directive 2004/48/EC on the enforcement of intellectual property rights (‘the Enforcement Directive’). It provides: Article 11 Injunctions Member States shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. Where provided for by national law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. Member States shall also ensure that rightholders 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, without prejudice to Article 8(3) of Directive 2001/29/EC. The third sentence is of most relevance. (Art.8(3) of Directive 2001/29/EC referred to concerns copyright and related rights, see above.)[19]Arnold J cited the judgment of the Court of Justice of the European Union (‘CJEU’) in L’Oréal SA v eBay International AG, Case C-324/09 [2011] ECR I-6011, at [137] in which the CJEU ruled that when applying national law, the English court is required to comply with the third sentence of art.11 of the Enforcement Directive, where it arises. This was pursuant to the usual Community rule on the compliance of national law with a European Directive, see Case C-106/89 Marleasing [1990] ECR I-3135.[20]Arnold J held (at [132]) that as a matter of Community law, when English courts are considering an application for a website-blocking injunction they are obliged to apply the jurisdiction afforded by s.37(1) of the Senior Courts Act 1981 in accordance with the third sentence of art.11 of the Enforcement Directive. This endorsed the court’s power under domestic law to grant a website-blocking injunction in a trade mark case.

Threshold conditions for the exercise of the jurisdiction under s.37(1)

[21]Arnold J took the view that in the context of a website-blocking application the exercise of the court’s jurisdiction under s.37(1) must be in accordance with arts.3 and 11 of the Enforcement Directive and arts.12 to 15 of Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce (‘the E-Commerce Directive’). These gave rise to four threshold requirements which have to be satisfied before turning to the court’s discretion in the usual sense (at [141]). They are:(1) The ISPs must be intermediaries within the meaning of the third sentence of art.11.(2) The users and/or the operators of the website must be infringing the claimant’s trade mark(s).(3) The users and/or the operators of the website must use the ISPs’ services to infringe.(4) The ISPs must have actual knowledge of infringing activity. This means actual knowledge of one or more persons (who need not be identified) using the ISPs’ services to infringe trade mark(s). It need not extend to knowledge of a specific infringement of a specific trade mark by a specific individual. An ISP may be given actual knowledge of infringing activity by receipt of sufficiently detailed notice of the activity and having had a reasonable opportunity to investigate the position.

Principles to be applied in the exercise of the court’s discretion

[22]If the threshold conditions are satisfied, in Arnold J’s view there are six requirements to be taken into account by the court when considering whether to exercise its discretion to grant the injunction sought (at [160]-[191]). They are for the most part derived from the Enforcement Directive. The first four, and it would seem the sixth too, are in fact aspects of the fifth and overall requirement that the injunction should be proportionate to the objective legitimately pursued by the order of the injunction. Arnold J explained the six separately:(1) Effective Efficacy, in terms of whether the injunction would at least seriously discourage users from accessing the target website, is to be taken into account. On the other hand, rightholders are not required to show that the injunction would be likely to reduce the overall level of infringement of their rights. That said, the injunction is less likely to be proportionate if there is a large number of alternative websites which are likely to be equally accessible and appealing to the interested user.(2) Dissuasive The court should consider whether the injunction is likely to dissuade third parties from infringing in the future.(3) Not unnecessarily complicated or costly The difficulty and cost for the ISP in complying with the injunction are factors to be taken into account.(4) Avoidance of barriers to legitimate trade The injunction must be strictly targeted so that it does not affect users who are using the ISP’s services in order lawfully to access information. Such an effect would create a barrier to legitimate trade.(5) Proportionality In relation to the proportionality of the injunction sought – the overall criterion by which the exercise of the court’s discretion is to be guided – Arnold J took the following considerations to be particularly important: (i) The comparative importance of the rights that are engaged and the justifications for interfering with those rights; (ii) The availability of alternative measures which are less onerous; (iii) The efficacy of the measures which the ISPs would be required to adopt, in particular whether they will seriously discourage the ISPs’ subscribers from accessing the target websites; (iv) The costs associated with these measures, in particular the costs of implementing them; (v) The dissuasiveness of the measures; (vi) The impact of the measures on lawful users of the internet; (vii) The substitutability of other websites for the target websites.(6) Safeguards against abuse The injunction should contain safeguards against abuse. In Cartier I they were the following: (i) The ISPs were entitled to discharge or vary the orders in the event of a material change in circumstances, including in respect of the costs of the order, the consequences for the parties and the effectiveness of the blocking measures from time to time. (ii) The operators of the target websites were permitted to apply to the court to discharge or vary the orders. (iii) Subscribers to the ISPs were permitted to apply to the Court to discharge or vary the orders. (iv) The page displayed to users who attempt to access the blocked websites should state that access has been blocked by a court order, identify the party or parties which obtained the order and state that affected users have the right to apply to the Court to discharge or vary the order. (v) A ‘sunset’ clause should be included in the order so that it ceased to have effect at the end of a defined period unless either the ISPs consented to a continuation or the court ordered a continuation. The present application The Target Websites

The present application

[23]The claimants seek a blocking order directed to five Target Websites: those currently located at www.perfectwatches.cn, www.pursevalley.cn, www.montblancebay.com, www.montblanc.com.co and replicawatchesstore.co.uk (currently redirecting to www.watchmush.org.uk).[24]Mr Graham in his witness statement set out the details of seven registered trade marks owned by the claimants (‘the Trade Marks’). He also explained what is to be found on each of the Target Websites. I accept from that evidence that the operators of the Target Websites advertise and offer for sale products under signs that are identical to one or more of the Trade Marks. In relation to each sign complained of, the products on offer under the sign are identical to products in respect of which the identical Trade Mark is registered. Test purchases of infringing goods were made from each of the Target Websites.[25]The claimants said that the advertising and offers for sale on the Target Websites and also the sales of products by way of test purchases constituted infringements of the Trade Marks pursuant to s.10(1) of the Trade Marks Act 1994.[26]Mr Graham explained how the Target Websites were selected. In each case(i) the website clearly offered fake goods and were infringing one or more of the Trade Marks;(ii) the website targeted UK consumers (among others); Mr Graham referred to a number of criteria confirming UK targeting, including the possibility in each case of purchasing the fake goods in sterling; this was not challenged;(iii) the website was identified as being popular with UK consumers and/or as being visible to internet users (I return to what was meant by ‘popular’ and ‘visible’);(iv) the registrar, host and in some cases operator or registrant had received complaint of the sale of infringing products which had not resulted in the closing of the website.[27]The defendant ISPs have been selected because their combined retail share of the UK fixed line broadband market was around 92% in the figures published for 2014. In other words, access to the Target Websites is overwhelmingly likely to be via one or other of the defendants’ broadband services.

The popularity and visibility of the Target Websites

[28]The popularity of a website can be measured by what is known as an ‘Alexa Rank’. Alexa Inc is a company which provides the service, freely available online. This service gives an indication of the amount of traffic directed to a website, i.e. the estimated number of daily unique visitors and number of page views over the previous 3 months, calculated according to Alexa Inc’s methodology. Ranking may be global or specific to one country, such as the UK. In the latter case the ranking is in relation to traffic from just that country. There is a threshold below which a website will not be given an Alexa rank. Only two of the Target Website enjoyed sufficient traffic to have a UK Alexa rank, namely the Perfect Watches and Purse Valley sites.[29]The visibility of a site refers to the likelihood of its being found by a searcher interested in what the site has to offer. Even though a site may be relatively visible on the net, it may not be sufficiently accessed to gain an Alexa rank. The Target Websites were tested for visibility on 18 November 2015 by a system known as the ‘Talisman system’ developed by a company called Incopro Limited. The system was explained by Dr Simon Moon, an employee of Incopro, in a confidential report dated 2 December 2015. The Talisman system uses the Alexa rank for a website where available and combines this with each of the ranks obtained in a search on Google and Bing, using a search term that would be employed by a person interested in the website, the term being provided by the client. The fourth and final rank employed is the Google image rank, using an image selected from a population of suitable images provided by the client. These four ranks are combined by means of Incopro’s algorithm to provide a ‘Visibility Score’.[30]Aside from the Alexa rank and Incopro’s Visibility Score, the claimants did a simple Google Search using search terms likely to be employed by persons searching for fake Cartier or Montblanc products – ‘cartier fake’, for instance.[31]The Perfect Watches and Purse Valley sites not only had Alexa ranks, they also scored highest among the Target Websites on the Visibility Score and Google rank. The remaining websites were nonetheless considered sufficiently visible to warrant complaint and to be made part of the present proceedings.

Complaints to the hosts, registrars, registrants and operators of the websites

[32]Mr Graham said that the claimants have sent notices of infringement to the hosts and registrars of each of the Target Websites, as well as to the registrant or operator to the extent that contact details could be ascertained from public records. No action has been taken by any of the addressees in response to the notices.[33]Between 20 and 26 October 2015 the claimants’ solicitors sent letters complaining of trade mark infringement by post and email to publicly available addresses for each of the Target Websites for the attention of the registrant and/or operator of the website, requesting a response within 7 days. There was a response from the operator of replicawatchesstore.co.uk, which temporarily closed, but subsequently reappeared having been redirected to www.watchmush.org.uk. Other than that, no responses have been received.

Notices to the defendant ISPs

[34]Between 23 and 27 November 2015 letters were sent to each of the defendant ISPs in respect of each of the Target Websites, giving notice of the present application and also providing information about(i) the Trade Marks relevant to that Target Website and(ii) the test purchase made.

Jurisdiction in this application

[35]In their note for the hearing the defendant ISPs denied that the court had jurisdiction to make the order sought, stating that this would be their position before the Court of Appeal in the appeal in Cartier I. Otherwise nothing of substance was said regarding jurisdiction in the strict sense. I am satisfied that the court has jurisdiction in the present application following the reasoning of Arnold J in Cartier I.

Threshold conditions in this application

[36]The defendants raised objections in relation to the third and fourth of Arnold J’s threshold conditions. By implication the defendants’ position was that the claimants had failed to satisfy those conditions such that I should refuse to grant the injunction even on the assumption that Arnold J had correctly identified the relevant criteria in law.

Third threshold condition: ISPs’ services must be used to infringe

[37]The defendants argued that there was no evidence that their services had been used to infringe the Trade Marks. They said that Mr Graham’s evidence went no further than showing that it was possible to access the Target Websites using all the ISPs’ home broadband connections and even that was not shown with regard to the second defendant’s broadband services.[38]It is true that the evidence went no further than establishing that it was possible to access the Target Websites via four of the defendants’ broadband services. In relation to the second defendant (‘EE’), Mr Graham said that none of the claimants’ solicitors uses EE broadband at home so this connection was not tested. He contended that there was no reason to doubt that it was possible to connect to the Target Websites using EE’s broadband services.[39]I think Mr Graham’s contention regarding EE broadband must be correct. I believe the point being made in the defendants’ note is that the mere fact of access to the Target Websites using the defendants’ broadband is not sufficient to overcome Arnold J’s third threshold condition. Yet it was sufficient for Arnold J in Cartier I – see [147]-[156]. In fact, in Cartier I the claimants did not even prove access in advance of the hearing: access to the relevant target websites was demonstrated in court using BT’s service and Arnold J was prepared to infer the same could be done using the other ISP’s services (at [156]). I find that use of the defendants’ services has been established.

Fourth threshold condition: actual knowledge by the ISPs

[40]The defendants acknowledged that they had received the claim form, the evidence in support of this application and the notices sent to them between 23 November and 16 December 2015. They said this was not enough. It merely established that the defendants had knowledge of the potential for their services to be used to access the Target Websites, but not knowledge of actual instances of such use.[41]Paragraphs 45 and 46 of Mr Graham’s witness statement provided evidence of actual use of the defendants’ broadband services, except EE’s, to access the Target Websites. Elsewhere Mr Graham described test purchases being made from the Target Websites. This evidence was served on the defendants and the facts stated in it have not been challenged. It seems to me that therefore the defendants did have knowledge of actual instances of use of their services as alleged, save in the case of EE where the claimants’ case is made only by inference.[42]In relation to the defendants other than EE, the notice received was similar to that regarded as sufficient by Arnold J in Cartier I, see [157]. So far as EE is concerned, the claimants told the defendants that they had inferred from their other evidence and alleged, as a fact, that EE broadband could be used to access the Target Websites. The inference and allegation were hardly surprising. EE (along with the other defendants) had a reasonable opportunity to investigate the position. Taken together this seems to me to qualify as actual notice, see Twentieth Century Fox Film Corp. v British Telecommunications plc [2011] EWHC 1981 (Ch); [2011] R.P.C. 28, at [149].

Full and frank disclosure

[43]Under the heading ‘Safeguards’ the defendants’ note raised an objection which at least in part seems to me to be better characterised as a proposed further threshold requirement. It is that the present application is analogous to an application for Norwich Pharmacal relief, the latter requires full and frank disclosure and so should this one. According to the usual principles for a Norwich Pharmacal or any ex parte application, the duty of full and frank disclosure applies and in its absence no relief should be granted by the court.[44]The full and frank disclosure the defendants have in mind is not really that. Rather, they say, notice should have been given to the operators of Target Websites, who would then have been in a position to attend court and give evidence as to whether there was infringement of the Trade Marks on those sites. This was not a matter in the defendants’ knowledge.[45]There are several answers to this. The first is that a website-blocking application is not completely analogous to a Norwich Pharmacal application as Arnold J has pointed out. Secondly, this was not an ex parte application without notice. The defendants were served with the application and the supporting evidence. They had every right to challenge that evidence with evidence of their own, to attend court and to present oral argument. They could themselves have sought evidence from the operators of the Target Websites but chose not to. That, probably, is the real point. I refer below to the difficulty in finding the operators and it is discussed in more detail by Arnold J in Cartier I. Finally, the evidence from Mr Graham is that the Target Websites are being used to market goods identical to those in relation to which the Trade Marks registered, under signs identical to the Trade Marks, and that these goods are neither the claimants’ goods nor the subject of any consent from the claimants. This is unchallenged, I accept it, and it is evidence of infringement of the Trade Marks.[46]The defendants’ note, under ‘Safeguards’, also complains that third parties who may be affected by the order have not been notified of the application. This is a separate matter and is better dealt with in the discussion of the precise terms of any order to be granted.

Proportionality in this application

[47]The overall point made in the defendants’ note in relation to proportionality was that this criterion falls to be tested by assessing the effect of the injunction sought on third parties, particularly operators of the Target Websites, end users and other website operators who may be affected by the order. The defendants said that the matter is therefore one in relation to which the claimants are left to satisfy the court and that the defendants take a neutral stance.[48]Having said that, the defendants went on to give a number of reasons why the injunction sought would not be proportionate, so I must consider them. I will not address arguments of principle which failed in Cartier I. Pending any ruling to the contrary by the Court of Appeal, I must assume that the whole of the reasoning in Cartier I is correct. I accept, however, that proportionality must be assessed on the facts of each case and that it is possible for the injunction sought in the present application to lack proportionality even though the one granted in Cartier I did not. Though as will be seen, there is little reason to distinguish the facts in this application from those in Cartier I.

Comparative importance of the rights engaged

[49]The rights engaged by a website-blocking order are the claimants’ trade mark rights, the defendants’ freedom to conduct their business as broadband providers and third party users’ freedom to use the net.[50]The defendants emphasised that only two of the Target Websites are sufficiently popular to warrant an Alexa rank and that, test purchases aside, there was no evidence that the other three had any significant custom in England and Wales. The implied assertion was that the importance of the claimants’ trade mark rights in relation to those three websites was minimal therefore the injunction sought was disproportionate in so far as it extended to those sites.[51]The claimants’ evidence with regard to the three websites with no Alexa rank was, as I have outlined above, based on the Visibility Score generated by Incopro’s Talisman system. The defendants had a number of objections to this. The first two raised confidential matters and I deal with them in the confidential annex to this judgment.[52]Thirdly, it was pointed out that the claimants had failed to provide comparators, such as high street retailers or currently blocked websites, to give an idea of what the Visibility Scores mean in practice. That is true, although blocked websites would reveal nothing because they are blocked. However, some sort of comparison was possible from Dr Moon’s report and I refer to this in the confidential annex. I am prepared to accept from Dr Moon’s evidence that a person searching for a fake Cartier watch or Montblanc pen on the net has a significant chance of finding even the two Target Websites with less visibility than the others. Leaving aside the possibility that this may lead to sales of fake products, the visibility of those websites adds to public knowledge of the widespread availability of the fake products sold under the Trade Marks. That of itself is liable to damage the Trade Marks’ functions of guaranteeing to consumers the origin of the goods and the quality of the goods, possibly among other functions, see L’Oréal SA v Bellure NV, Case C-487/07 [2009] ECR I-5185, at [58].[53]The defendants’ fourth argument was that the claimants had not elaborated on how the Talisman system works. I think Dr Moon’s report did this sufficiently.

The availability of alternatives

[54]The defendants argued that the claimants had made insufficient efforts to have the Target Websites disabled by alternative means. Five such means were suggested.[55]The first was to take action against the operators of the Target Websites. For the reasons given in Cartier I (at [198]) this is not realistic where the operator is outside the UK. The defendants pointed out that the Replica Watches Store website was at one time apparently operated from Wakefield, West Yorkshire.[56]The claimants’ solicitors did contact the named registrant and apparent operator in Wakefield. The website then went offline, but was subsequently redirected to www.watchmush.co.uk and later to www.watchmush.org.uk. It is now operated from outside the UK with a server based in California.[57]The defendants invited the court to visit the watchmush.co.uk domain and see that it has been taken down pursuant to the order of a court in the Southern District of California. After the hearing I did as the defendants asked. The .co.uk website indeed displayed a notice reflecting the order of the Florida court. But the .org.uk site continues to flourish, offering a range of watches with well-known brand names, including ‘Cartier’ watches.[58]I think all this underlines the difficulty in trying to take action against the primary wrongdoers, that is to say the operators of the Target Websites. I have no doubt that lack of progress against the operators does not affect the proportionality of the injunction sought.[59]Secondly, the defendants say that the claimants should have obtained a declaration of infringement from the court, served this on Google and invited Google to remove the Target Websites from Google search results. This is known as ‘de-indexing’ and for the reasons given in Cartier I at [210]-[215] it is not a realistic alternative way of dealing with the Target Websites.[60]Thirdly, the defendants argue that two of the Target Websites are hosted on a single service provider, CloudFlare, which should have been approached by the claimants and requested to take down those websites. Arnold J explained in Cartier I why this does not provide a solution in practice, at [199]-[204]. He did add that the claimants were open to criticism for not even attempting to use this measure (at [201]) although because the attempt was likely to be ineffective, this failure was given little weight. In the present application the claimants tried to close down the Target Websites by contacting the hosts. The results are set out in Annex A to Mr Graham’s witness statement. Some responses were received; no websites were taken down.[61]Domain name seizure was the fourth alternative solution proposed: the probable lack of efficacy of that solution is discussed in Cartier I at [208]-[209].[62]Likewise, Arnold J explained in Cartier I why notifying providers of payment processing services is unlikely to work, at [205]-[207], the fifth alternative proposed by the defendants.

Efficacy and dissuasiveness

[63]The heads of efficacy and dissuasiveness were run together in the defendants’ note and two arguments were made. The first was that there is a very large number of websites selling counterfeits under the Trade Marks and so it is not clear that the closure of the Target Websites will make any difference to the scale of infringement of the Trade Marks.[64]For the reasons discussed in Cartier I (at [163]-[176] and [218]), although the presence of alternative websites may in certain circumstances have a limited bearing on proportionality, there is no requirement for the claimant to show that blocking access to the target websites in issue is likely to reduce the overall infringement of his trade marks.[65]The second argument rested on two of the target websites supporting encryption and the consequent possibility that they may not be susceptible to blocking by the defendants. Mr Brandreth told me that this depended on the means of blocking specified in the order and that therefore it did not present a practical difficulty. I accept that assurance.

The cost of implementing the measures

[66]The defendants’ argument in relation to cost was that there are a four-figure number of websites which the claimants have identified as infringing their Trade Marks and the cost of blocking all of these would be very large. I am not concerned with speculation about further applications. It was not suggested that the cumulative cost to the defendants of the orders made and the present order sought makes them disproportionate.

Impact on lawful users

[67]The defendants pointed out that the order is liable to affect the sale of lawfully marketed goods on the Target Websites. That may be so, but the claimants have done their best to warn the operators and the operators have chosen to continue to put the Target Websites at risk by marketing counterfeit products on them.[68]The more substantive point made by the defendants was that the Target Websites share an IP address with other websites that may be lawfully marketing legitimate goods and which would be shut down by an order which required the blocking of the relevant IP address. A similar difficulty was considered in Cartier I at [254] to [257]. In that case the claimants’ solicitors analysed the websites sharing an IP address with a target website. The solution adopted by Arnold J was to block an IP address either where it was used solely by the Target Website or alternatively where the websites sharing that address were selling counterfeit products. He accepted the accuracy of the claimants’ solicitors’ analysis. Where the analysis showed that the IP address for a target website was shared with one or more legitimate websites, the order made only required Domain Name System (DNS) blocking. The effect of DNS blocking was that when the customer’s computer asked for the address corresponding to the domain name of a target website, the ISP’s system either returned no IP address or returned some other address which did not correspond to the domain name. Legitimate websites using the same IP address as a target website were thus unaffected.[69]The claimants’ solicitors have in this application carried out a similar analysis of the websites sharing any of the IP addresses used by the Target Websites. The claimants propose an approach the same as the one adopted in Cartier I. I asked Mr Brandreth whether there had been any applications to the court from parties operating websites wrongly blocked by the order in Cartier I and if so, how many. He told me there had been none.[70]There are several possible reasons why there have been no such applications. Even so, it seems to me that the difficulty raised by the defendants regarding the sharing of IP addresses can be dealt with in the same way as in Cartier I and that it is likely to be a practical solution.

A further potential practical difficulty

[71]The defendants’ note raised a further potential practical difficulty that one of the defendant ISPs may encounter in complying with the order sought. I will deal with this briefly, partly because the background was considered confidential. The main point is that the possible difficulty raised could be dealt with by appropriate drafting of an order.

Conclusion

[72]I am satisfied that the circumstances of the claimants’ application comply with the criteria for the grant of a website-blocking order set out in Cartier I. I will hear submissions on the precise form of the order. I also direct that the draft of this judgment provided to the claimants before handing down should be served on the defendants, subject to the usual restrictions set out at the head of the draft, so that the defendants have the opportunity to make submissions on the form of the order if they so choose.

Permission to appeal

[73]Both sides addressed the question of permission to appeal in their written submissions. It may help the defendants to decide whether to attend the hearing on the form of the order if I say something about that now.[74]The claimants and defendants all took the view that whatever the outcome the losing party should have permission to appeal. That is obviously right since my judgment rests on a new development in the law created in Cartier I which will be reviewed in April by the Court of Appeal. I will give the defendants permission to appeal at the hearing on the form of the order, unless they express any wish to the contrary.[75]The defendants contended that time for service of an appellants’ notice should be extended until after judgment in the appeal in Cartier I. They argued that money could be saved because the outcome of the appeal may well in effect decide the outcome of the appeal in the present proceedings which could then be resolved with minimum cost.[76]I can see that, but the claimants say they intend to apply to the Court of Appeal to have the appeal in this action heard at the same time as the appeal in Cartier I. Whether or not that happens is a matter for the Court of Appeal and I should not do anything that may delay matters and so affect that decision. I therefore indicate now that there will be no extension of time to serve an appellants’ notice.