In a decision which will interest Internet Service Providers (ISPs) and owners of trade marks, the Supreme Court has recently handed down its judgement in the case of Cartier International AG and others v British Telecommunications Plc and another (2018).
As previously reported by Stevens & Bolton’s Elaine O’Hare and Kate Maguire, whilst the court re-affirmed the availability of website blocking orders in cases of trade mark infringement, it has reversed the position on who should bear the costs of implementing such orders as set out by the High Court and Court of Appeal, finding that the owner of the trade mark should indemnify the ISPs for the reasonable costs of the ISP implementing the order.
Originally the applicants in this case had sought a website blocking order against various ISPs in the UK on the basis that the websites in question infringed their trade mark rights through the sale of counterfeit watches and other luxury items.
In 2014 the High Court granted the orders, which was in itself a landmark ruling as it was the first time the court had granted such an order against an intermediary on the basis of infringement of trade mark rights. The Court of Appeal dismissed an appeal against the granting of the order in 2016 and held that the costs of implementation were a cost of conducting the business of an ISP.
The ISPs in question appealed to the Supreme Court in relation to the costs involved in implementing the website blocking orders.
The Supreme Court held that an innocent intermediary such as an ISP should be indemnified by a rights holder in respect of the costs of implementation of a website blocking order. The court was heavily influenced by the fact that the ISPs had not done anything wrong (as they were a mere conduit for the infringement) and, in the court’s view, the protection of intellectual property rights was an ordinary and natural cost for a rights holder to bear. It is also clear from the Court of Appeal’s judgement that brand owners should only be obliged to pay the ISP for the reasonable costs of implementing the website blocking order.
Whilst the fact that ISPs can be obliged to block access to websites which infringe trade mark rights was welcomed by brand owners, and whilst they would no doubt have preferred not to have to meet the costs of implementation, they will no doubt see this as a price worth paying.