A UK Supreme Court decision this week means that internet service providers (ISPs), like BT, will no longer have to pay the costs for trademark infringement blocking orders. Instead, rights-holders will have to reimburse the costs of blocking infringing material to the ISPs.
The decision was handed down by Supreme Court judge Lord Sumption. The case was filed by BT and co-appellant EE against block sites peddling knock-off luxury Cartier watches and Montblanc jewelers, but the win is much bigger for the whole ISP industry. In 2016, a Court of Appeal held that ISPs should pick up the costs, but this was overruled this week.
“There is no legal basis for requiring a party to shoulder the burden of remedying an injustice if he has no legal responsibility for the infringement and is not a volunteer but is acting under the compulsion of an order of the court,” ruled the judge, who sat as part of a five-strong panel at the highest court in the land.
“It follows that in principle the rights-holders should indemnify the ISPs against their compliance costs,” he continued
Lord Sumption ruled: “In English law, the starting point is the intermediary’s legal innocence. An ISP would not incur liability for trademark infringement under English law, even in the absence of the safe harbor provisions of the [EU] E-Commerce Directive… an ISP serving as a ‘mere conduit’ has no means of knowing what use is being made of his network by third parties to distribute illegal content.
“The protection of intellectual property rights is ordinarily and naturally a cost of the business which owns those rights and has the relevant interest in asserting them.”
Crucially, the decision rests on ISPs in similar cases being conduits for live content and not caches or webhosts. Lord Sumption ruled:
It is critical to these conclusions that the intermediary in question is legally innocent. The appellants, in this case, are legally innocent because they are “mere conduits”. Different considerations may apply to intermediaries engaging in caching or hosting governed by articles 13 and 14 of the E-Commerce Directive because these operations involve a greater degree of participation in the infringement, which is more likely to infringe national laws protecting intellectual property rights if the conditions of immunity are not satisfied.
The full judgment, relatively short at 39 numbered paragraphs, can be found on the Supreme Court website (PDF).