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BT and ISPs Win UK Court Battle Over Website Blocking Costs

Wednesday, June 13th, 2018 (12:18 pm) - Score 7,970
censored access internet

BT and three other broadband and mobile operators have today won their battle in the Supreme Court with Cartier, which challenged whether it was right for them to suffer the costs of implementing blocks against websites that were found to be selling counterfeit goods (i.e. abuse of Trade Mark).

Until recently ISPs like BT, EE, Virgin Media, Sky Broadband and TalkTalk could only be forced, via a court order, to block websites if they were found to facilitate internet copyright infringement (piracy) under Section 97A of the Copyright, Designs and Patents Act. But in 2014 the High Court extended this to include sites that sell counterfeit goods (here) and thus abuse company trademarks (logos).

The providers initially appealed this decision, not least by stating that Cartier and Montblanc (they were responsible for the original case) had provided “no evidence” that their networks were being abused to infringe Trade Marks and that the UK Trade Mark Act did not include a provision for website blocking. Not to mention the unlikely risk that such a law could be applied in an overzealous way (e.g. eBay being blocked due to a dodgy seller).

On top of that the ISPs also noted that such sites weren’t heavily used, unlike the major piracy havens that have already been restricted, and thus they felt as if it would not be proportionate for them to suffer the costs. As we’ve previously reported, website blocking is anything but cheap and that often goes for both the ISPs and Rights Holders (here).

In April 2016 this case went to the Court of Appeal (London) and the ISPs lost (here). At the time the judge held that although the ISPs were not guilty of any wrongdoing, they were inevitable and essential actors in the infringing activities of the websites in question. The ISPs were also required to bear the costs of implementing the orders. The Court of Appeal dismissed the appeals of the ISPs in their entirety.

However the ISPs didn’t completely give up and in early 2018 the Supreme Court began hearing a new appeal from BT (EE), Three UK, O2 and Vodafone (Case ID: UKSC 2016/0159), which focused on both the threshold conditions for imposing blocks against websites that infringe registered trademarks and challenged whether ISPs, as innocent parties, should be required to bear the costs of such blocking orders.

Today the Supreme Court ruled that Rights Holders, not ISPs, should pay the costs for website blocking orders (full judgement).

Supreme Court Statement

It has sometimes been suggested that because ISPs benefit financially from the volume and appeal of the content available on the internet, including content which infringes intellectual property rights, it is fair to make them contribute to the cost of enforcement. That assumes a degree of responsibility on the part of the intermediary which does not correspond to any legal standard.

The law is not generally concerned with moral or commercial responsibilities except as an arguable basis for legal ones. Even if a moral or commercial responsibility were relevant, it would be hard to discern one in a case like this. Website-blocking injunctions are sought by rights-holders in their own commercial interest. There is no reason why the rights-holder should be entitled to look for a contribution to the cost of defending his rights from anyone other than the infringers

It follows that in principle the rights-holders should indemnify the ISPs for the compliance costs, subject to the limits on relief set by EU law. There is no reason to believe that such an indemnity, which must be limited to reasonable costs, would exceed those limits. The costs are not excessive, disproportionate or such as to impair the respondents’ ability to enforce their rights.

Critically, the intermediary in this case is legally innocent. Different considerations may apply to those engaging in caching or hosting, which involve greater participation in the infringement and which are more likely to infringe national intellectual property laws if “safe harbour” immunity is unavailable.

As to the costs of the litigation, the judge awarded them against the ISPs because, unusually, they had made the litigation a test case and had strenuously resisted the application. He was plainly entitled to do so.

The ruling caveats that the outcome may be different if the ISPs are “engaging in caching or hosting” of the content that is intended to be blocked, which raises a question about what happens when ISPs try to save bandwidth by caching websites via a Content Delivery Network (CDN) on their platform. But CDN’s could easily be tweaked to avoid caching such sites and the measure is thus more likely to hit website hosts etc.

Otherwise the outcome means that Rights Holders will now face even higher costs than they did before to get websites blocked, which may hinder their ability to impose mass restrictions in the future. The case also reinforced the long held position that internet access providers are only “mere conduits” of online data.

Jim Killock, Executive Director of Open Rights Group, said:

“This case is important because if ISPs paid the costs of blocking websites, the result would be an increasing number of blocks for relatively trivial reasons and the costs would be passed to customers. While rights holders may want websites blocked, it needs to be economically rational to ask for this.”

Meanwhile Cartier International AG and their supporters could still conceivably escalate their case to the Court of Justice of the European Union, although this might face complications from Brexit and they may still lose. We also expect that ISPs may in the future argue that the judgement should be extended to existing copyright based blocking orders, not only those related to trade mark abuse.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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8 Responses
  1. Avatar un4h731x0rp3r0m

    “Otherwise the outcome means that Rights Holders will now face even higher costs than they did before to get websites blocked, which may hinder their ability to impose mass restrictions in the future.”

    My heart bleeds for them, companies worth billions now having to actually pay with some of their billions to rid the internet of something they do not like. How or why in the first place they thought costs should be shared boggles the mind. Perhaps now ISPs will also start to challenge some of the court orders if the organisation concerned do not like the bill an ISP sends them for doing the blocking job. Or at the very least organisations with copyright troll lawyers will think twice.

    • Avatar lukehebb

      Its very easy to understand why they thought this should be the case. Because that way, they don’t have to pay. They’re looking out for their own interests as much as they can get away with. Unlucky for them, they lost out on this one.

      This is a good win for the ISP industry as this kind of action always affects the small ISPs far more than the big ones

    • The orders were never applied against smaller providers, only the largest players.

    • Avatar un4h731x0rp3r0m

      Yep it is nothing really to do with small fry in the ISP market and it costing them money. Hes right in the regard though that these industries want things their own way but do not want to pay for it. Personally I think Big or small providers should not be paying any part of the costs.

      Normally id say BT, Talk Talk and their ilk should be screwed over all they can be, but in this case i fully support them, i would even congratulate them. They should never of had to foot any of the bill, even if its just manpower hours to block things in the first place.

      I would not hire a builder to brick up an old doorway to somewhere and expect the builder to share the costs in doing the job. Yet the likes of record companies, the movie industry and fashion organisations seem to think that is exactly how it should work and ISPs should be paying in part to brick up electronic doorways they do not like.

  2. Avatar wirelesspacman

    “But CDN’s could easily be tweaked to avoid caching such sites…”

    Hmm… If I was the ISPs, I would be very careful about arguing this as it could so easily be turned against them – “if it is so easy (aka cheap) to tweak the CDN, then why is it so expensive to block?”

    • Avatar Spurple

      You control the CDN, you don’t control the host.

      If you block the host on one domain or IP today, with zero to 5 dollars they could be up and running at a different IP in a fee minutes. If you’re a CDN, you simply remove the caching configuration and in this case if the host changes IP without telling the CDN, they lose the CDN functionality.

  3. Avatar Optimist

    A good decision. ISPs are intermediaries carrying traffic between networks, it is absurd to suggest they should be responsible for what is uploaded to servers not under their control. What next – telcos being required to block certain callers from contacting their customers? Postal services being forbidden from delivering items from unapproved senders?

  4. Avatar dragoneast

    At last, a case law decision based on principle. Although it needed the most senior judges at the Supreme Court to understand basic legal principles.

    A lot of our problems seem to stem from the use of the law to make people good, i.e. play God and enforce morality. We think we can achieve what God (in whatever form we believe him, her or it as we choose, to be) hasn’t. We can’t. It never worked and it never will. Politics, or commerce, isn’t a religion, however hard they try to be.

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