This is a Supreme Court decision concerning the allocation of compliance costs tied to website blocking injunctions, granted against trademark-infringing websites. In the course of the proceedings, five types of corresponding costs (thus far borne, in similar cases, by the appelant Internet Service Providers) were identified:
- “i) the cost of acquiring and upgrading the hardware and software required to block the target sites;
- (ii) the cost of managing the blocking system, including customer service, and network and systems management;
- (iii) the marginal cost of the initial implementation of the order, which involves processing the application and configuring the ISP’s blocking systems;
- (iv) the cost of updating the block over the lifetime of the orders in response to notifications from the rights holders, which involves reconfiguring the blocking system to accommodate the migration of websites from blocked internet locations; and
- (v) the costs and liabilities that may be incurred if blocking malfunctions through no fault of the ISP, for example as a result of overblocking because of errors in notifications or malicious attacks provoked by the blocking” (at para [5])
The ISPs accepted the costs described in (i) and (ii) - however, they claimed that the rightholders should indemnify them with regards to the costs laid out in (iii), (iv) and (v). The Supreme Court agreed with the ISPs, considering the principles emerging from the English legal tradition (eg. the Norwich Pharmacal decision) and the EU framework. It was found that there is no basis for suggesting that the discussed compliance costs are "excessive, disproportionate or such as to impair the respondents’ practical ability to enforce their trade marks" (at para [36]). The argument (earlier accepted by the Court of Appeal) that such costs should be borne by the ISPs as general operational costs, tied to benefitting from online traffic, was dismissed by Lord Sumpton, who found that this stance would assume "a degree of responsibility on the part of the intermediary which does not correspond to any legal standard" in English law (at para [34]).