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Who picks up the bill for a web-blocking order?

Written by Mark Reed on 03 August 2018

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Cartier Intl AG & Ors v British Telecommunications Plc & Anor [2018] UKSC 28.

This case went up to the UK Supreme Court, and finally a decision was made regarding costs for executing a website blocking order. The issue arose when two internet service providers (ISP’s) fought back after being asked to pay the cost of a blocking order even though they are essentially the innocent party. This has always been done under section 37(1) of the Senior Courts Act 1981 and Article 11 of the Intellectual Property Rights Enforcement Directive (2004/48/EC).

The case in question regarded international giants Cartier, who wanted to block third party websites being allowed through the ISP to offer fake Cartier products. To do this Cartier had to file an application against the main ISP’s for a website blocking injunction on the grounds of infringement by the other websites, which incidentally was the first time someone has successfully used their trademark as grounds for their application. However, the Supreme Court held that the cost burden should in this case, not be on the ISP being the innocent party, and a huge case for future applications for web-blocking orders.

Specifically, the Supreme Court found that in the instant case, a rightsholder who seeks an order for their own commercial interest should pay the cost for it, as it is essentially ‘an ordinary and natural cost of business, so is where the costs should sit’, not with the ISP. This means that the rightsholder must compensate or indemnify the ISP when a blocking order is granted.

It was also highlighted that the legal innocence of the intermediary must be taken into consideration, which means that “because the internet service providers only acts as a ‘mere conduit’, they have no means of knowing what use is being made of its network by third parties to distribute illegal content”. They also said that it would not be the same decision if the ISP, or ‘intermediary’ had played a larger part in the activities such as caching or hosting, because it involves a greater degree of participation so could still result in cost burdens on the part of the ISP.

This means that although it changes the way in which blocking orders are paid for, the old rules can apply if it can be shown that the ISP has participated in some way, as previously mentioned. The Supreme Court outlined the specific cost that can be recovered by the ISP from the rightshodler, such as Initial implementation of the order, which involves processing and configuration of the ISP’s blocking systems; Updating the block over the lifetime of the order in response to notifications from rightsholders; and the costs and liabilities that may be incurred if the blocking malfunctions through no fault of the ISP, eg, overblocking due to errors in the notifications from the rightsholders.

It is arguable the best weapon for copyright and trade mark owners, but if they may now have to indemnify the ISP and pay the cost of a blocking order, this could restrict those without the funds in place, to protect their rights.

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