Nintendo play ISP blocking to win

Nintento submitted that the operators of the Target Websites were infringing their Trade Marks under Article 9(2)(a) of Regulation 2017/1001/EU. Arnold agreed that this was beyond dispute that each of the Target Websites were using signs identical to the Trade Marks in the course of trade in relation to goods identical to those for which the Trade Marks are registered without consent. Further, that the use was liable to affect one of the functions of the Trade Marks, and that the Target Websites target the relevant consumers in the UK. It was noted that the majority of consumers would appreciate from all the references to “hacking” that the Target Websites were offering unauthorised products designed to enable circumvention of TPMs, but that the presentation of the websites were likely to deceive a significant number of consumers. In particular the About Us section of the websites gave the impression of legitimacy with the following statement: 

It was also accepted by the court that Nintendo’s trade marks were infringed pursuant to Article 9(2)(c), since their marks benefit from a very substantial reputation as a result of the use made of them and that the use by the Target Websites took unfair advantage of that reputation by intentionally exploiting it in order to sell the circumvention devices.

Nintendo relied on sections 296ZD and 296 CDPA88, which implement Article 6 of the Information Society Directive 2001/29/EC and Article 7(1)(c) of the Software Directive 2009/24/EC. In Case Nintendo v PC Box C-355/12 [Kat Posts here], the CJEU explained that Art 6 is to be interpreted broadly and “includes application of an access control or protection process, such as encryption, scrambling or other transformation of the work”. Arnold accepted Nintendo’s submission that this included the TPMs in this case, which encrypt the video games including their artwork, text, and soundtracks to prevent unauthorised copies being created or played on the Nintendo Switch console.

Cat and Mouse, the gaming edition Image: Lisa Zins

Since the circumvention devices were expressly stated to be for hacking the Nintendo Switch, the target websites clearly fell within Section 296ZD (1)(b) CDPA 1988 which requires that “a person 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.”

Further, the court considered that Nintendo had standing to sue on all three of the sub-sections 2(a), (b) and (c) – “(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.”

Therefore, Arnold held that Nintendo had good claims against the operators of the Target Websites under sections 296ZD and 296 CDPA88 as well as for infringement of the Trade Marks.

Granting the Injunction

There are four threshold conditions which need to be satisfied in order for a website-blocking injunction to be granted: 1) the defendants are intermediaries within the meaning of Art 11 of the Enforcement Directive, 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; and 4) the defendants have actual knowledge of this (which may be as a result of notification by the rights holder)

It was accepted that 1) the Defendants were intermediaries; 2) the operators of the target websites were infringing Nintendo’s rights in the UK; 3) the operators were using the Defendants’ services to do this; and 4) the Defendants had actual knowledge of this, because they had been notified by Nintendo.

In deciding whether to grant a website-blocking injunction the court must consider eight criteria over and above the threshold conditions. The injunction must be (1) necessary, (2) effective, (3) dissuasive, (4) not unduly costly or complicated, (5) avoid barriers to legitimate trade, (6) a fair balance between the fundamental rights engaged, (7) proportionate and (8) safeguarded against abuse. Of these factors, proportionality is the key one, since consideration of the other factors feeds into the proportionality analysis.

The court agreed with the counsel for Nintendo submitted that the same factors should be considered in a case based on other kinds of rights. Although the criteria are largely drawn from the Enforcement Directive, it can be seen from the jurisprudence of the CJEU that they largely reflect general principles of EU law, and to some extent principles of European human rights law. Moreover, there is no reason of principle why an application based on other kinds of rights should be subject to either more or less stringent criteria. Arnold accepted Nintendo’s submission that the criteria were satisfied because, in summary:

1. The injunction sought was necessary to prevent, or at least reduce, substantial damage to Nintendo. Nintendo has sustained significant loss due to substantial sales of the circumvention devices and pirated games. No alternative measures were realistically available since; the operators of the websites are not identified, cease and desist letters had been ignored, except that two of the websites changed their URLs, take-down requests to the relevant hosting providers had been ignored and take-down requests sent to platforms such as YouTube, Amazon and ebay were actioned, but the relevant listings were replaced with new ones.
2. As set out in Cartier, although quite easily circumvented, blocking injunctions are effective in reducing traffic to the target websites.
3. Similarly, blocking injunctions are dissuasive and the Defendants are required to display information about the block, which helps to dissuade users.
4. Blocking injunctions are not difficult for the Defendants to implement. They already have the necessary technology and, as a result of the Supreme Court decision in Cartier, Nintendo must bear the Defendants’ incremental costs of implementing the injunction.
5. The injunction has no impact on legitimate trade, because none of the target websites carry on any legitimate trade.
6. 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 detriment.
7. As such, the injunction is proportionate.
8. The order proposed by Nintendo contained the usual safeguards adopted in previous cases.

Therefore, Nintendo’s order was granted.