Blocking injunctions and their costs: some details of the forthcoming Supreme Court round of Cartier

The possibility to seek an injunction against an intermediary whose services are used by third parties to infringe an IP right has proved an important tool in the hands of rightholders, including in the online context. 

The reason why the role of intermediaries is central is because, as Recital 59 in the preamble to the InfoSoc Directive [but the same is true also for the Enforcement Directive] explains, 

“[i]n the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end.”

However, how should responsibility for the costs of injunctions be allocated? [here are some slides I prepared, and here's a more detailed discussion]

The UK approach to costs

In the UK, since the first copyright blocking injunction granted in Newzbin 2 the rule has been that, while rightholders/applicants bear the costs of application for an injunction, internet service providers (ISPs) have to pay the implementation costs. 

The reason given is that an ISP is a commercial enterprise that makes a profit from the provision of the services that the operators and users of target websites use to infringe the applicants’ IP rights. Accordingly [Newzbin 2, at 32], 

“the costs of implementing the order can be regarded as a cost of carrying on that business. It seems … to be implicit in recital (59) of the Information Society Directive that the European legislature has chosen to impose that cost on the intermediary. Furthermore, that interpretation appears to be supported by the Court of Justice’s statement in L'Oréal v. eBay at [at 139] that such measures ‘must not be excessively costly’.”

The issue whether this approach is correct, including from a domestic - rather than EU - law standpoint, is at the centre of the UK Supreme Court instalment of the Cartier litigation [also the French Supreme Court has recently weighed in on this issue, as Mathilde reported here].

The Cartier case

Readers will remember that both the High Court [here and here] and the Court of Appeal [here] confirmed the availability of blocking injunctions in cases other than copyright. 

Despite the lack of specific implementation into UK law of the third sentence of Article 11 of the Enforcement Directive, the provision contained in Section 37(1) of the Senior Courts Act 1981 could be in fact regarded as the appropriate legislative basis to grant jurisdiction also in this area.

In line with his earlier judgment in Newzbin 2, Arnold J also took the view that “the rightholders should pay the costs of an unopposed application … [and] the ISPs should generally bear the costs of implementation as part of the costs of carrying on business in this sector”. However the judge did “not rule out the possibility of ordering the rightholder to pay some or all of the implementation costs in an appropriate case.” [at 240]

The “entirely correct” decision of Arnold J was confirmed in appeal. 

How much, did you say?!

The Court of Appeal decision contains the dissent of Briggs LJ (as he then was) regarding the responsibility for the costs of an injunction. In particular, he held the view that what has become the traditional cost allocation for intermediary injunctions would not be correct under English law.

The Supreme Court round

The Court of Appeal decision has been subsequently appealed to the UK Supreme Court [as The IPKat reported here]. Thanks to a very good Katfriend, the IPKat has learned something more about this latest round.

In particular:

"The Cartier appeal is listed for a full day in the Supreme Court next Tuesday 30 January 2018. 

Presided by Lord Mance, the other four judges will be Lord Kerr, Lord Sumption, Lord Reed & Lord Hodge.

The two key questions concern:

1.    The threshold conditions for the imposition of an order requiring ISPs to block (or attempt to block) access to websites infringing registered trade marks.

2.    Whether ISPs should be required to bear the costs of trade mark driven website blocking.

The Internet Service Providers’ Association (ISPA) sought permission to intervene in the appeal, but such permission was refused.

However, the Supreme Court granted applications for permission to intervene to the following:

·       The mobile network operators;

·       BPI;

·       The Open Rights Group;

·       The Motion Picture Association."

More to come: stay tuned!  

[Originally published on The IPKat on 24 January 2018]