In today’s judgment, the UK Supreme Court held that rights-holders should bear the costs of implementing website blocking injunctions to prevent IP infringement. The judgment overturns the practice adopted by the English courts since 2011 of requiring internet service providers, as innocent intermediaries, to bear these costs.
A website-blocking injunction requires an internet service provider (ISP) to block access to specified target websites which infringe intellectual property rights. The order is granted on the basis that, although the ISPs are innocent of any infringement, they are best placed to bring the infringing activities of others to an end.
In this case, Cartier and other rights-holders sought an injunction requiring various ISPs to block websites which were advertising and selling counterfeit copies of their branded luxury goods. This was the first case in which a website blocking injunction had been granted by a UK court to protect trade marks, as our previous Advisory explains. The Supreme Court refused the ISPs permission to appeal on the conditions for granting such injunctions, so the Court of Appeal’s judgment on that point stands, but the Supreme Court did agree to consider whether ISPs should be required to bear the implementation costs of compliance.
The Supreme Court unanimously allowed the appeal, disagreeing with the Court of Appeal’s finding that EU legislation and case law implicitly support an order for the intermediary to bear the implementation costs. The Supreme Court held that the incidence of compliance costs is a matter for English law, and that the ordinary principle of English law is that an innocent party should not be required to bear the costs of complying with an injunction granted to prevent another’s wrongdoing. Despite suggestions that ISPs benefit from the volume and appeal of infringing internet content, the Supreme Court’s view was that rights-holders should pay the implementation costs of website blocking injunctions which have been sought in their “own commercial interest“. The cost of protecting IP rights is a cost of the business which owns those rights, and “[t]here is therefore no reason why the rights-holder should be entitled to look for contribution to the cost of defending his rights to any one other than the infringers“.
The Supreme Court did however state that a different conclusion may be reached should an ISP engage in “caching [as per Article 13 of the E-Commerce Directive] or hosting [as per Article 14 of the E-Commerce Directive], because these operations involve greater participation in the infringement [of IP rights]”.