Nintendo has won an injunction in the UK High Court forcing five of the largest broadband ISPs to block four websites that were found to have facilitated copyright infringement (i.e. internet piracy) by selling devices that allowed unauthorised games to be played on Nintendo's Switch console.
In this case, two of the target websites (“the Team Xecuter Websites“) were operated by the parties responsible for developing devices for the Switch which circumvented Nintendo's inbuilt measures to prevent such activity, while the third and fourth (“the R4 Website” and the “Stargate Website“) were operated by UK resellers of such devices. All four websites also used Nintendo's trade marks.
Following the grant of this injunction, Sky Broadband, BT, TalkTalk, Virgin Media and EE must now take steps to block access to the four websites.
In the context of relying on trade mark infringement, Arnold J applied the criteria established by the Court of Appeal in Cartier v BskyB and later refined by the Supreme Court (See our blogs on the Cartier case: Cartier Supreme Court decision: blocking injunctions. Who pays for implementation? Court of Appeal upholds blocking injunctions for trade mark infringements and It’s another website blocking injunction, but not as we know it….)
By way of reminder, in the first instance decision in Cartier, Arnold J's view was that a blocking injunction in this context must be in accordance with Articles 3 (General obligation) and 11 (Injunctions) of the Enforcement Directive (2004/48/EC), and Articles 12 to 15 (Mere conduit, Caching, Hosting and (No general obligation to monitor) of the E-Commerce Directive (2000/31/EC). This means applying four threshold requirements before considering the court's discretion. The threshold requirements are:
- The ISPs must be intermediaries within the meaning of the third sentence of Article 11;
- The users and/or operators of the website must be infringing the claimant's trade mark(s);
- The users and/or operators must use the ISPs' services to infringe; and
- 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). This does not need to extend to knowledge of a specific instance of trade mark infringement by a specific individual. An ISP may be given actual knowledge of infringing activity by receipt of a sufficiently detailed notice of the activity and having had a reasonable opportunity to investigate the position. In this case, Arnold J was satisfied that all the tests were met. In particular, infringement of the trade marks was clear as there was a risk that both the origin and investment functions of Nintendo's marks would be damaged by this activity, e.g. a consumer wrongly thinks that the websites were selling authorised accessories and/or the integrity of Nintendo's reputation is undermined. Arnold J also accepted the trade marks enjoyed a very substantial reputation and the use of the marks by the websites took unfair advantage of such status.
- The injunction itself must also fulfil the usual requirements that the UK court considers when granting any injunction. The injunction must be: (1) effective; (2) dissuasive; (3) not unnecessarily complicated or costly; (4) be a barrier to legitimate trade; (5) proportionate; and (6) safeguard against abuse.
Circumvention of copyright protection measures
The application raised an innovative point in that Nintendo also applied for the injunction with reference to sections 296ZD and 296 of the Copyright, Designs and Patents Act 1988 ("CDPA") which concern the circumvention of copyright protection measures (not copyright in its own right).
Readers may recall the reliance on copyright itself as a basis of a blocking injunction is already widely accepted – for example see our blog concerning UEFA's successful application to block access to servers providing infringing streams of live matches – UEFA scores its own blocking injunction. Indeed, copyright infringement was the foundation for the first ISP blocking injunction in the IP context in the famous Newzbin cases (see our previous blogs – High Court orders ISP to block access to infringing website and The Newzbin Saga… .
However in this case, Nintendo was not relying on an actual IP right (i.e. copyright), and therefore this approach technically fell outside the ambit of the Enforcement Directive. Nevertheless, Arnold J allowed the injunction to be granted in the context of sections 296ZD and 296 of the CDPA, referring to reasoning in the Cartier decision that the court's jurisdiction was not limited to cases involving traditional infringement of IP rights.
The judgment also includes a comprehensive overview of the criteria for copyright protection measures, which ensure that such measures are proportionate. Nintendo's strategy of using encryption keys on its authorised games and consoles was held to be valid and not overreaching. It was noted that although the measures prevented the use of "homebrew" games (games developed legally by the gamer), users are still able to develop their own video games through Nintendo's Authorised Developer program.
Understandably, this decision has been welcomed by Nintendo and UKIE, the UK video games industry body. Rights-holders generally will be pleased to know that the ambit of ISP blocking injunctions continues to widen.
The judgment supports an understanding of the great investment, sophistication and value directed into and derived from digital games. The digital assets created by games companies are increasingly seen as valuable assets whose protection is worth supporting. In addition to the argument that games companies have invested heavily in the development, promotion, distribution and maintenance of a game, there is a strong argument that protecting this asset class promotes the ever-growing digital entertainment industry. In this way, the judgment protecting Nintendo's copyright encourages an industry where creativity, originality and innovation are the fundamental building blocks to its continuing success.
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