BT and EE have appealed to the Supreme Court of the UK against an earlier ruling that made ISPs liable for the costs of blocking copyright infringement websites.
The appeal was heard by five judges sitting in the highest court in the land – though half the legal arguments were based on EU regulations and directives.
Telco giants BT and EE were appealing against a Court of Appeal ruling from 2016 which held internet service providers liable for the cost of blocking websites used for copyright infringement. The original case was brought by posh watchmaker Cartier, which was aggrieved that internet miscreants were flogging knock-off goods online and wanted their sites blocked.
Since that judgment was handed down the case has evolved quite a bit, with the ISPs arguing that while they don't mind being ordered to block copyright-infringing content, someone else should be bearing the costs of doing so.
Charlotte May QC, counsel for BT and EE, told the Supreme Court that under the EU's E-Commerce Directive, immunities exist for ISPs: "These immunities can exempt a service provider, like the ISPs, for liability arising out of the transmission of information between third parties."
She also asserted: "ISPs cannot block [infringing sites] voluntarily because of the restrictions imposed on them under the Net Neutrality regulation," referring to the snappily titled EU regulation 2015/2120, which is where the bloc's net neutrality law can be found. Her argument was largely technical and relied upon drawing analogies with Norwich Pharmacal orders (NPOs), which are English court orders that can be used to force someone to disclose documents. The person (or company) applying for an NPO normally stumps up to cover the respondent's reasonable costs for complying with the order.
May said: "There's no logical reason to treat ISPs differently in this case as there is in Norwich Pharmacal or other situations where the other party is subjected to a compulsion order with a duty to assist... it is the applicant and not the innocent party who should have to bear the costs."
The chief judge for the sitting, Lord Mance, who is also the deputy president of the Supreme Court, observed: "Your clients would have considerable difficulty passing costs onto the wrongdoers," to which May replied: "It's a matter of choice for the trademark proprietor whether they do or not. They certainly have the opportunity to seek those costs against the wrongdoer."
Appearing for Cartier and its co-appellants, Montblanc-Simplo GmbH and Richemont International SA, was Adrian Speck QC, who drew an analogy between ISPs' blocking of "pornography, gambling, even social media" sites, which he inferred was done regardless of whether others were paying for it. If, he reasoned, ISPs could do that voluntarily, why not do it for copyright-infringing content?
"I don't see what you extract from fact that ISPs have accepted certain responsibilities, perhaps under public or governmental pressure," commented Lord Mance. "It's a rather different kettle of fish."
Speck added that copyright holders already do the job of monitoring the internet for infringement: "The costs we are talking about are not actually costs of doing anything more than monitoring our monitoring."
Lord Mance did not appear to be impressed by the full costs argument, in which Speck claimed that ISPs are "profiting" from copyright-infringing content from the point at which they are served a legal injunction notifying them that it exists. He also tried to convince the Supreme Court that the ISPs' position amounts to "I'm not going to do it [block infringing content] unless you pay me".
"Well, if what you mean is the cost is passed on by the ISP to their customers, one could also say consumers bear the cost," mused the judge, later adding: "I'm still puzzled by the relevance of the profits [ISPs] might make on the question of 'who should bear the costs of the injunction'. If they made the profits, maybe they should devote some of them to the injunction, but by definition the injunction would stop the profits."
His fellow judge, Lord Hodge, weighed in, observing that ISPs can't block sites "before they get notice. When they get notice they're going to be subject to an injunction. What they can't say is 'I'm not going to comply with an injunction unless you pay me.'"
Lord Sumption, another of the bench, summed it up: "All we're concerned with is what regime courts should impose as terms of that order [to block infringing content]. I'm not sure it's really fair to say there are certain terms on which an injunction would be available which would be unacceptable to the rights holders. It follows it's a free for all as far as the defendants are concerned. Even without Articles 12-14 of the EU E-Commerce directive.
"Are you submitting that by refusing to do it, the defendant would be acting unlawfully, or are you simply saying in a wider sense it would be an immoral law?"
Speck conceded: "They wouldn't be acting unlawfully."
The Supreme Court will hand down its judgment on the case in the near future. ®