The UK Supreme Court has ruled that internet service providers (ISPs) do not have to pay the implementation costs when ordered to block websites offering goods that infringe trade mark rights (Cartier International AG and others v British Telecommunications Plc and another, [2018] UKSC 28). Instead, rights holders who benefit from a “blocking injunction” must bear the costs.
Background
Cartier and its fellow claimants are the owners of a large number of UK trade mark registrations for Cartier, Montblanc and other luxury brands. The defendants are some of the major retail ISPs in the UK. The claimants successfully obtained a blocking injunction which required the ISPs to block access to a websites selling counterfeit Cartier, Montblanc and other products.
Both the High Court and the Court of Appeal had ruled that the ISPs were responsible for the costs of implementing the blocking injunction on the basis that they were “inevitable and essential actors in the infringing activities via the websites”. The ISPs appealed this point to the Supreme Court.
The Decision
The Supreme Court allowed the appeal, ruling that the costs of implementing the blocking injunction should be borne by the right holders. The ISPs, who under EU law are not able to monitor the content of websites who use their service, were held to be mere conduits and innocent third parties. As such, it was appropriate that they be indemnified for reasonable implementation costs. The Court took care to draw a potential distinction between conduits and other possible types of intermediaries. Different considerations might apply to those engaged in caching or hosting, or automated fulfilment or print-on-demand platforms, e.g. Printful, DesignbyHumans and CafePress.
The Court found that any question concerning the costs of enforcing a blocking injunction was a matter for national law, following the principle that national courts should apply EU law in accordance with domestic procedural rules. Therefore, it was appropriate to consider the issue in the context of other types of orders made by the English courts against innocent third parties, e.g. document disclosure orders against third parties innocently mixed up in wrongdoing. It is a principle of such orders that it is the party seeking the order, not the innocent third party, who bears the “reasonable costs” of compliance. It remains to be seen what “reasonable” means in practice.
The Court rejected the argument that ISPs should bear the costs of implementing the blocking injunction as a quid pro quo for enjoyment of the “safe harbour provisions” (without which they would be liable for infringement). An argument that ISPs ought to bear the costs as a matter of commercial equity – because they benefit from hosting infringing websites, which their subscription fee-paying customers access – was also rejected.
Practical Implications
Blocking injunctions remain a useful weapon for brand owners against online infringement. Unlike other mechanisms, e.g. take-down notices or domain name complaints, where infringers often quickly repost or move content to another domain, these blocks can track the infringing website to a number of different internet locations. Most orders are not defended by the ISPs, so they are relatively easy to obtain. However, in practical terms, we must wait and see how much ISPs ask brand owners to pay to implement one of these blocking injunctions before we know whether they will remain within the reach of smaller brand owners than the likes of Cartier.
