On 13 June 2018, the Supreme Court handed down its judgment on the issue of the costs of implementing a blocking order made against the UK’s major internet services providers (“ISPs”) in Cartier International and others v BT plc and another  UKSC 28. In doing so, the Supreme Court has overturned the historic position, where such costs were borne by the ISPs on the basis that such costs were simply to be “regarded as a cost of carrying on that business”.
The Supreme Court ruled that the issue of costs is a matter of national law and, under English law, “the ordinary principle is that unless there are good reasons for a different order an innocent intermediary is entitled to be indemnified by the rights-holder against the costs of complying with a website blocking order”. The Court held that “[website blocking injunctions] are wholly directed to the protection of the claimant’s legal rights, and the entire benefit of compliance with the order inures to the rights-holder”. As a consequence, the costs of implementing the order, updating the block over its lifetime and the costs and liabilities arising if the block malfunctions should all be for the right-holder to bear.
The judgment, given by Lord Sumption, likens a blocking order in this way to a Norwich Pharmacal order or a freezing injunction. He concludes that the historic approach to costs assumed a degree of responsibility on the part of the intermediary. While the commercial or moral responsibility is arguably relevant, it is only the issue of legal responsibility which has any bearing on who bears the burden of costs.
Since the first blocking order was made in 2011, the law in this area has developed rapidly with no less than 17 similar injunctions being granted since then. The extent of the court’s discretion has also been broadened, in the current case, to include blocking orders to protect trade mark rights (where historic cases related to copyright). While the present judgment applies to blocking orders relating trade mark infringement, ISPs will argue that this also extends to orders made in respect of copyright.
Blocking orders represent a useful tool in the armoury of copyright and trade mark owners dealing with large scale infringements which are neither practicable nor, in some cases, possible to tackle in any other way. However, this decision, while reasonable, potentially serves to reduce the attraction of such an approach for smaller companies. In contrast, this represents a very successful outcome for ISPs.
The full judgment can be found here.