Antoniou, A

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IRIS 2018-8/25GB-United Kingdom:Supreme Court rules on ISPs’ liability for website blocking feesOn 13 June 2018, the UK Supreme Court held in Cartier International AG & Ors v British TelecommunicationsPlc & Anor that Internet service providers (ISPs) should not bear the costs incurred in implementing counterfeitsite-blocking injunctions issued against them under section 37(1) of the Senior Courts Act 1981.The appellants in this case are the five largest providers of networks through which subscribers can access contentonline but who do not provide, store or monitor content themselves. The respondents are well-known companiesbelonging to the Richemont Group. They design, manufacture and sell luxury-branded goods, infringing copies ofwhich had been offered, according to the evidence, on some 46 000 websites. In 2014, the respondent companiesobtained injunctions in the High Court against the appellants, requiring them to block access to specified “targetwebsites” selling counterfeit goods in breach of their trademarks. Whilst such orders are available to copyrightholders under section 97A of the Copyright, Designs and Patents Act 1988, there is no corresponding statutoryprovision relating to trademarks. Hence, the respondents had relied upon the general injunctive power availableto the High Court under the Senior Courts Act.In 2016, the Court of Appeal decided that the High Court had jurisdiction to make an order of the kind sought byRichemont. Moreover, both the court of first instance and a majority of the Court of Appeal took the view that itwas implicit in the Information Society Directive (2001/29/EC) and the Enforcement Directive (2004/48/EC) that itwas entirely appropriate for a national court to order that the costs of any such injunction should be borne by theintermediary. As Jackson LJ observed, the compliance costs are “part of the price which the ISPs must pay for theimmunities which they enjoy under the two Directives”.The appeal to the Supreme Court centred on the issue of cost allocation, specifically in relation to the implemen-tation of website-blocking orders. The pivotal question with which it was concerned was: “When an injunctionis obtained against an innocent intermediary to prevent the use of his/her facilities by wrongdoers for unlawfulpurposes, who should pay the cost of complying with the order?” Overturning the decisions of the lower courts,the Supreme Court held that neither the relevant EU Directives nor the Court of Justice of the European Union hadset any rules on the incidence of compliance costs. Lord Sumption stated - and the remaining four justices agreed- that this was a matter for individual member states to decide “within the broad limits set by the relevant EUprinciples of effectiveness and equivalence, and the requirement that any remedy should be fair, proportionateand not unnecessarily costly.”Applying the ordinary principles of English law, the Supreme Court endorsed the neutral role played by ISPsas “mere conduits” of Internet traffic and unanimously ruled that innocent intermediaries were entitled to beindemnified by rightsholders against the costs of complying with a website-blocking order, unless there were goodreasons for a different order. In the Court’s judgment, “there is no legal basis for requiring a party to shoulderthe burden of remedying an injustice, if he has no legal responsibility for the infringement and is not a volunteerbut is acting under the compulsion of an order of the court.” Lord Sumption emphasised that website-blockinginjunctions are directed to the rightsholders’ protection in the pursuit of their “own commercial interest” andcompliance with the order inures to their benefit. He added: “It is not ordinarily or naturally a cost of the businessof an ISP which has nothing to do with the rights in question but is merely providing a network which has beenabused by others”.Finally, as far as litigation costs are concerned, applicants are, in general, responsible for their own costs ofapplying for a website-blocking order. In this case, however, Lord Sumption agreed that the first instance judgehad properly exercised his discretion in awarding costs against the ISPs because they had made the litigation a“test case” and had, uncommonly, “strenuously resisted” the application.• Cartier International AG & Ors v British Telecommunications Plc & Anor [2018] UKSC 28http://merlin.obs.coe.int/redirect.php?id=19208EN• Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2016] EWCA Civ 658http://merlin.obs.coe.int/redirect.php?id=19209ENIRIS 1Alexandros K. AntoniouUniversity of EssexThe objective of IRIS is to publish information on legal and law-related policy developments that are relevant to theEuropean audiovisual sector. Despite our efforts to ensure the accuracy of the content, the ultimate responsibilityfor the truthfulness of the facts on which we report is with the authors of the articles. Any opinions expressedin the articles are personal and should in no way be interpreted as representing the views of any organisationsrepresented in its editorial board.© European Audiovisual Observatory, Strasbourg (France)IRIS 2

Supreme Court rules on ISPs’ liability for website blocking fees

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Supreme Court rules on ISPs’ liability for website blocking fees

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