Relief Against Internet Service Providers For IP Infringement - Nintendo Co Ltd v Sky UK Ltd &

May 25, 2021

Whilst it is common for intellectual property (IP) owners to sue infringers directly for relief, however where the identity of infringers is unknown, there may be a hurdle as the IP owner may not be able to identify the correct defendant to sue and claim for relief accordingly.

In the United Kingdom (UK), trademark owners whose trademark had been infringed can apply for a website-blocking injunction to the Court to restrain internet service providers (ISPs) from providing access to the infringement materials on websites hosted by the said internet service providers.

This alert illustrates the application for a website-blocking injunction in the case of Nintendo Co Ltd v Sky UK Limited & Ors.

*For illustration and educational purposes only

Brief Facts

Nintendo Co Ltd (Nintendo) 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 known as the ‘Nintendo Switch’ where millions of units of the same were sold in the UK.

Nintendo is the proprietor of various trademarks, including: EUTM No. 16070914 for the word mark NINTENDO SWITCH, which was registered on 4 May 2017.

EUTM No. 016606873 for the figurative mark depicted below (referred to as the Joycon logo), which was registered on 18 September 2017:

Nintendo sought for an injunction requiring the Defendants, who are the five main retail ISPs in the UK, 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 Nintendo’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 the UK resellers of the circumvention devices. All four websites used Nintendo’s trade marks.

High Court’s Decision

Whilst the Defendants did not contest Nintendo’s application, the Court held that it is the duty of the Court to ensure that the application is well founded before granting it.

The High Court had applied the principles set out in Court of Appeal case of Cartier International AG v British Sky Broadcasting Ltd governing the grant of website-blocking injunctions as follows:

1. the defendants are intermediaries within the meaning of Article 11 of the European Parliament and Council Directive 2004/48/EC

2. the users and/or operators of the website are infringing the claimants’ IP rights

3. those users and/or operators are using the defendants’ services to infringe

4. the defendants have actual knowledge of this (which may be as a result of being notified by the rightholder)

The High Court had answered all questions in the affirmative:

1. it is well established that the Defendants are intermediaries

2. for the reasons given above, the operators of the Target Websites are infringing Nintendo’s rights in the UK

3. the evidence establishes that the operators are using the Defendants’ services to do this

4. the Defendants have actual knowledge of this because they have been notified by Nintendo

The Court of Appeal in Cartier further held that in deciding whether to grant a website-blocking injunction the Court must consider 8 criteria over and above the threshold conditions.

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. Of these factors, proportionality is the key factor, since consideration of the other factors feeds into the proportionality analysis.

The High Court had dealt with each criteria and granted the website-blocking injunction based on the following:

1. The injunction sought is necessary to prevent, or at least reduce, substantial damage to Nintendo for the following reasons:

2. 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 Nintendo has sustained significant losses as a result.

3. No alternative measures are realistically available to Nintendo since Nintendo has been unable to identity the operators of the Target Websites, who may well be abroad.

4. cease and desist letters sent by Nintendo’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 Nintendo to platforms such as YouTube, Amazon and Ebay are complied with by the said platforms, but the relevant listings are simply replaced by new ones.

5. The evidence in the Cartier case showed that, although quite easily circumvented, blocking injunctions are effective in reducing traffic to the target websites.

6. Similarly, blocking injunctions are dissuasive. Moreover, the Defendants are required to display information about the block, which helps to dissuade users.

7. 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, Nintendo must bear the Defendants’ incremental costs of implementing the injunction, and so there is no additional cost for the Defendants.

8. The injunction sought by Nintendo will have no impact on legitimate trade, because none of the Target Websites appears to carry on any legitimate trade.

9. The injunction strikes a fair balance between protecting Nintendo’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 Nintendo ‘s TPMs and infringe its rights to Nintendo ‘s significant detriment.

10. For the reasons given above, the injunction is proportionate.

Commentary

The UK Courts’ jurisdiction to grant website blocking injunctions is primarily derived from European Union (EU) laws and directives such as European Parliament and Council Directive 2000/31/EC, and European Parliament and Council Directive 2004/48/EC which allows the Court to grant injunctions against ISPs on the basis of IP infringement.

There is no equivalent law in Malaysia. However, there are powers for Malaysian Courts to grant injunctions against ISPs in limited circumstances.

For example, under section 43C(2) of the Copyrights Act 1987, the court may order the ISPs to take steps to disable access to infringing materials provided that infringing materials originated from an outline location outside Malaysia or from a specified account.

Unfortunately, other statutes concerning IP laws in Malaysia including the Trademarks Act 2019, Patents Act 1983, Industrial Designs Act 1996 are silent in respect of the Court’s powers to grant website blocking injunctions against ISPs. Further, there is no reported case concerning the grant of website blocking injunctions against ISPs to-date in Malaysia.

Nevertheless, IP owners may resort to other methods to enforce their rights against online IP infringements. For example, they may lodge a complaint with the Malaysian Communications and Multimedia Ministry (MCMC) and/or the Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) to take down infringing online materials.

Further, a notification procedure is available under section 43H of the Copyrights Act 1987 where within 48 hours of receipt of the copyright owner’s notice of an infringing material, the ISP is obliged to remove or disable access to the infringing material.

All in all, IP owners are advised to consult solicitors specialising in IP to obtain the best strategy to protect their IP rights.