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Trade mark owners must reimburse internet service providers for the cost of implementing internet blocking orders

15 June 2018

The Supreme Court handed down judgment in the long-running Cartier dispute of 13 June 2018, overruling the Court of Appeal and clarifying that trade mark owners are generally responsible for reimbursing ISPs for any incidental costs which they incur when complying with an internet blocking order obtained by the trade mark owner. Internet service providers (ISPs) will now generally only be responsible for the fixed overheads of acquiring/upgrading the hardware and software required to block the target sites, and the costs of managing the blocking system (such as customer service, and network and systems management).

This judgment reverses the previously accepted position (which has been widely applied in the case of online copyright infringements) that the ISPs should bear the costs of implementing internet blocking injunctions granted against them.

Rights-holders should continue to consider which European jurisdiction is most appropriate in which to apply for an internet blocking injunction and, if the UK is chosen, they should factor into the cost of maintaining their portfolio the additional cost of reimbursing innocent ISPs for any incidental costs which they incur in complying with court orders to block access to infringing content.

Although the additional costs exposure for rights-holders could be significant for smaller brands, the ability for rights-holders to obtain immediate injunctive relief requiring the intermediary ISPs to block access to the infringing content is very valuable. ISPs are easily identifiable, where the actual infringer may not be, and are generally content not to oppose rights-holders seeking such orders.

An important point to note is that it was national law which was determinative here, not the surrounding framework of EU law. If the relevant national law starts from the position that the intermediary ISP should bear such incidental costs, EU law will not prevent the relevant national court from coming to a different decision on costs to that arrived at by the UK Supreme Court.

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