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United Kingdom Supreme Court |
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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Cartier International AG & Ors v British Telecommunications Plc & Anor [2018] UKSC 28 (13 June 2018) URL: http://www.bailii.org/uk/cases/UKSC/2018/28.html Cite as: [2018] RPC 11, [2018] ECDR 16, [2018] 1 WLR 3259, [2018] WLR(D) 354, [2018] EMLR 22, [2018] ETMR 32, [2018] 2 All ER (Comm) 1057, [2018] ECC 29, [2018] WLR 3259, [2018] Bus LR 1417, [2018] UKSC 28, [2018] 4 All ER 373 |
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On appeal from: [2016] EWCA Civ 658
JUDGMENT
Cartier International AG and others (Respondents) v British Telecommunications Plc and another (Appellants)
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before
Lord Mance Lord Kerr Lord Sumption Lord Reed Lord Hodge
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JUDGMENT GIVEN ON |
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13 June 2018 |
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Heard on 30 January 2018 |
Appellants |
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Respondents |
Charlotte May QC |
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Adrian Speck QC |
Jaani Riordan |
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Benet Brandreth QC |
(Instructed by Reed Smith LLP) |
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(Instructed by Wiggin LLP) |
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Interveners (in-house submissions) |
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(1) Telefónica UK Ltd |
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(2) Vodafone Ltd |
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(3) Hutchison 3G UK Ltd |
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Intervener (The Open Rights Group) (written submissions only) |
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Greg Callus |
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(Instructed by Preiskel & Co LLP) |
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Intervener (The Motion Picture Association) (written submissions only) |
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Richard Spearman QC |
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Intervener (BPI (British Recorded Music Industry) Ltd) (written submissions only) |
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Edmund Cullen QC |
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Kiaron Whitehead |
LORD SUMPTION: (with whom Lord Mance, Lord Kerr, Lord Reed and Lord Hodge agree)
Introduction
4. On 17 October and 26 November 2014 the respondents obtained injunctions from Arnold J requiring the appellant ISPs to block or attempt to block access to specified “target websites”, their domains and sub-domains and any other IP address or URL notified to them whose purpose is to enable access to a target website. Website blocking injunctions have become a familiar weapon in the continuing battle between the holders of intellectual property rights and infringers. There is an express statutory power to make such orders to protect copyrights under section 97A of the Copyright, Designs and Patents Act 1988. In Twentieth Century Fox Film Corpn v British Telecommunications plc [2012] 1 All ER 806 and Twentieth Century Fox Film Corpn v British Telecommunications plc (No 2) [2012] 1 All ER 869, Arnold J dealt with a number of issues concerning website blocking injunctions in copyright cases. Since then similar injunctions have been granted on 17 occasions against the appellant ISPs on the application of copyright-owners, and they have achieved a high degree of standardisation. Their use seems likely to increase.
6. The practice since Twentieth Century Fox Film Corpn v British Telecommunications plc (No 2) [2012] 1 All ER 869 has been to order the rights-holders to bear their costs of the unopposed proceedings to obtain website-blocking orders but to leave the ISPs to bear the costs of implementing the orders. In his judgment in that case, at para 32, Arnold J justified leaving the ISPs to pay the costs of implementation on two grounds. The first was essentially a consideration of commercial equity:
“The studios are enforcing their legal and proprietary rights as copyright owners and exclusive licensees … BT is a commercial enterprise which makes a profit from the provision of the services which the operators and users of [the target website] use to infringe the studios’ copyright. As such, the costs of implementing the order can be regarded as a cost of carrying on that business.”
Arnold J’s second ground was that it was implicit in the EU Directives which require member states to make website-blocking injunctions available. I shall return to this point when I come to deal with the Directives. At any rate, the practice proposed by Arnold J in 2011 has been followed ever since, and it was followed by Arnold J himself in this case. The majority of the Court of Appeal (Jackson and Kitchin LJJ, Briggs LJ dissenting) upheld him on this point also: [2017] Bus LR 1.
Domestic law
9. A century later, Lord Romilly’s judgment was the main basis in authority for the seminal decision of the House of Lords in Norwich Pharmacal Co v Customs and Excise Comrs [1974] AC 133. Norwich Pharmacal was an action against the Customs and Excise for an order that they disclose the identity of those who, by importing drugs the subject of the plaintiff’s patent, had infringed it. The Customs and Excise, although they were not themselves infringers or in any other way culpable, had control over the goods at the point of importation. They were therefore unwittingly involved in the infringement although not party to it. The House of Lords held that disclosure should be ordered. The mere fact that the Commissioners possessed the relevant information was not enough to justify this result. The decisive factor was that they had themselves facilitated the tort, albeit innocently. Lord Reid stated the principle as follows at p 175B-C:
“… if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.”
10. The Norwich Pharmacal jurisdiction is commonly exercised for the purpose of assisting the claimant to bring or maintain proceedings against the wrongdoers, generally by providing information. But it is not limited to cases where proceedings against the wrongdoers are anticipated, or indeed to the provision of information. As Lord Fraser observed in British Steel Corpn v Granada Television Ltd [1981] AC 1096, 1200C-G, the injunction “is sought for the vindication of BSC’s rights, and I do not think it matters whether separate proceedings are required for that purpose or not.” This was confirmed by the House of Lords in Ashworth Hospital Authority v MGN Ltd [2002] 1 WLR 2033, para 3, and by the Supreme Court in Rugby Football Union v Consolidated Information Services Ltd (formerly Viagogo Ltd) [2012] 1 WLR 3333, para 15. The true basis of the court’s intervention is that once the intermediary has been given notice of the infringement of the plaintiff’s rights, his duty is to stop placing his facilities at the disposal of the wrongdoer. This is why it is critical that the intermediary should have been “mixed up in the tortious acts of others”. As it happened, the Commissioners of Customs and Excise were “mixed up” in the importation pursuant to a statutory duty. They could not therefore be required to do more than provide information so as to allow direct proceedings against the infringers to stop the importation. But an intermediary who was free to terminate his involvement in the infringing trade, like the freight forwarder in Upmann v Elkan, could have been required to do so.
11. I suggested in Singularis Holdings Ltd v PricewaterhouseCoopers [2015] AC 1675, para 22, that the duty to assist identified by Lord Reid was not a legal duty in the ordinary sense of the term. As Lord Reid himself put it in Norwich Pharmacal, the intermediary came under the duty without incurring personal liability. This is really only another way of saying that the court had an equitable jurisdiction to intervene. Lord Kilbrandon put the point very clearly in his own speech. Citing the South African decision in Colonial Government v Tatham (1902) 23 Natal LR 153, 158, he said that “the duty is said to lie rather on the court to make an order necessary to the administration of justice than on the respondent to satisfy some right existing in the plaintiff” (p 205D-E).
12. It is not clear how the costs of compliance were dealt with in Norwich Pharmacal itself. The only member of the Appellate Committee to express a firm view in his speech was Lord Cross. “The full costs of the respondent of the application and any expense incurred in providing the information,” he observed at p 199G, “would have to be borne by the applicant.” Lord Reid, in the passage which I have quoted, tended to that view but more equivocally. The other members of the Appellate Committee agreed with the order proposed by Lord Reid, but without saying anything about compliance costs. Subsequent practice has, however, been consistent. The ordinary rule, absent exceptional circumstances, is that the intermediary is entitled to the costs of compliance. The reason was explained by Aldous LJ, delivering the judgment of the Court of Appeal in Totalise Plc v The Motley Fool Ltd [2002] 1 WLR 1233, para 29. The defendant operated an internet bulletin board for investors, on which account holders could post opinions and information. Totalise complained that one account-holder was posting defamatory messages under a pseudonym, and obtained a Norwich Pharmacal injunction requiring disclosure of his name. The Court of Appeal, overruling the judge, held that the defendant should have both the costs of the proceedings and the costs of implementation. Aldous LJ said:
“Norwich Pharmacal applications are not ordinary adversarial proceedings, where the general rule is that the unsuccessful party pays the costs of the successful party. They are akin to proceedings for pre-action disclosure where costs are governed by CPR r 48.3. That rule, we believe, reflects the just outcome and is consistent with the views of Lord Reid and Lord Cross in the Norwich Pharmacal case [1974] AC 133, 176, 199. In general, the costs incurred should be recovered from the wrongdoer rather than from an innocent party … Each case will depend on its facts … In a normal case the applicant should be ordered to pay the costs of the party making the disclosure including the costs of making the disclosure.”
“The logic behind that general rule is that, where an innocent third party has reasonably incurred legal costs to enable a claimant to obtain relief, then, as between the innocent third party and the innocent claimant, it is more unjust if the innocent third party has to bear his own legal cost than it is for the innocent claimant to pay them. After all, it is the claimant who is invoking the legal process to obtain a benefit, and the fact that the benefit is one to which he is legally entitled is not enough to justify an innocent third party having to be out of pocket.”
The Directives
“(40) Both existing and emerging disparities in member states’ legislation and case law concerning liability of service providers acting as intermediaries prevent the smooth functioning of the internal market, in particular by impairing the development of cross-border services and producing distortions of competition; service providers have a duty to act, under certain circumstances, with a view to preventing or stopping illegal activities; this Directive should constitute the appropriate basis for the development of rapid and reliable procedures for removing and disabling access to illegal information; such mechanisms could be developed on the basis of voluntary agreements between all parties concerned and should be encouraged by member states; it is in the interest of all parties involved in the provision of information society services to adopt and implement such procedures …
…
(42) The exemptions from liability established in this Directive cover only cases where the activity of the information society service provider is limited to the technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient; this activity is of a mere technical, automatic and passive nature, which implies that the information society service provider has neither knowledge of nor control over the information which is transmitted or stored.
(43) A service provider can benefit from the exemptions for ‘mere conduit’ and for ‘caching’ when he is in no way involved with the information transmitted; this requires among other things that he does not modify the information that he transmits; this requirement does not cover manipulations of a technical nature which take place in the course of the transmission as they do not alter the integrity of the information contained in the transmission.
(44) A service provider who deliberately collaborates with one of the recipients of his service in order to undertake illegal acts goes beyond the activities of ‘mere conduit’ or ‘caching’ and as a result cannot benefit from the liability exemptions established for these activities.
(45) The limitations of the liability of intermediary service providers established in this Directive do not affect the possibility of injunctions of different kinds; such injunctions can in particular consist of orders by courts or administrative authorities requiring the termination or prevention of any infringement, including the removal of illegal information or the disabling of access to it.
(46) In order to benefit from a limitation of liability, the provider of an information society service, consisting of the storage of information, upon obtaining actual knowledge or awareness of illegal activities has to act expeditiously to remove or to disable access to the information concerned; the removal or disabling of access has to be undertaken in the observance of the principle of freedom of expression and of procedures established for this purpose at national level; this Directive does not affect member states’ possibility of establishing specific requirements which must be fulfilled expeditiously prior to the removal or disabling of information.
(47) Member states are prevented from imposing a monitoring obligation on service providers only with respect to obligations of a general nature; this does not concern monitoring obligations in a specific case and, in particular, does not affect orders by national authorities in accordance with national legislation.”
“Article 12
‘Mere Conduit’
1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, member states shall ensure that the service provider is not liable for the information transmitted, on condition that the provider:
(a) does not initiate the transmission;
(b) does not select the receiver of the transmission; and
(c) does not select or modify the information contained in the transmission.
2. The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission.
3. This article shall not affect the possibility for a court or administrative authority, in accordance with member states’ legal systems, of requiring the service provider to terminate or prevent an infringement.
Article 13
‘Caching’
1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, member states shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information’s onward transmission to other recipients of the service upon their request, on condition that:
(a) the provider does not modify the information;
(b) the provider complies with conditions on access to the information;
(c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry;
(d) the provider does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and
(e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement.
2. This article shall not affect the possibility for a court or administrative authority, in accordance with member states’ legal systems, of requiring the service provider to terminate or prevent an infringement.
Article 14
Hosting
1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, member states shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.
2. Paragraph 1 shall not apply when the recipient of the service is acting under the authority or the control of the provider.
3. This article shall not affect the possibility for a court or administrative authority, in accordance with member states’ legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for member states of establishing procedures governing the removal or disabling of access to information.”
Article 15(1) seeks to close an alternative route by which liability for content might be imposed on information society services. It provides:
“1. Member states shall not impose a general obligation on providers, when providing the services covered by articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.”
“Article 18
Court actions
1. Member states shall ensure that court actions available under national law concerning information society services’ activities allow for the rapid adoption of measures, including interim measures, designed to terminate any alleged infringement and to prevent any further impairment of the interests involved.”
21. Articles 12 to 14 require member states to confer on information society services immunity from liability under their national laws for certain designated operations. Articles 12(1), 13(1) and 14(1) require that immunity to be conditional. The differences between the conditions in the three provisions reflect the different degrees of responsibility on the part of the information society service for the content of what is transmitted. The mere provision of a communications network (article 12) and caching (article 13) are to be immune for the reasons explained in recitals (42) and (43). They are passive, technical services involving no editorial function. The restriction on monitoring in article 15 means that they are unlikely to know and have no duty to discover the content of what is transmitted. By comparison, the corresponding immunity for hosting in article 14 is more strictly conditional because there is an editorial function, however minimal. The provider of the service holds selected content for distribution and has a direct relationship with the content provider. It is not a mere passive actor. It should be noted that the duty to stop illegal activities which is referred to in recital (40) applies only to caching and hosting. The immunity for caching is conditional on the service provider expeditiously removing or disabling access to information temporarily stored in the course of transmission once it knows that the information has been removed from the network or that access to it there has been disabled or that a relevant authority has required these measures: article 13(1)(e). The immunity for hosting requires the service provider to take the same steps as soon as it becomes aware of any illegality or of facts from which it is apparent: article 14(1)(b). The assistance to rights-holders which is required of information society services engaging in caching or hosting under articles 13(1)(e) and 14(1)(b) respectively are not free-standing obligations. They are conditions of the relevant immunity. The consequence of breach of those requirements is that the immunity is lost, but whether that results in liability will depend on the provisions of national law: see Google France SARL v Centre national de recherche en relations humaines (CNRRH) SARL (Joined Cases C-236/08 to C-238/08) [2011] Bus LR 1, para 107, and L’Oréal SA v eBay International AG (Case C-324/09) [2012] Bus LR 1369, para 107. For present purposes, the important point is that there is no corresponding condition attached to acting as a “mere conduit”, which is the operation characteristic of an ISP. The immunity attached to that operation is not conditional on any active steps being taken other than compliance with court orders.
“(4) A harmonised legal framework on copyright and related rights, through increased legal certainty and while providing for a high level of protection of intellectual property, will foster substantial investment in creativity and innovation, including network infrastructure, and lead in turn to growth and increased competitiveness of European industry, both in the area of content provision and information technology and more generally across a wide range of industrial and cultural sectors. This will safeguard employment and encourage new job creation.
…
(58) Member states should provide for effective sanctions and remedies for infringements of rights and obligations as set out in this Directive. They should take all the measures necessary to ensure that those sanctions and remedies are applied. The sanctions thus provided for should be effective, proportionate and dissuasive and should include the possibility of seeking damages and/or injunctive relief and, where appropriate, of applying for seizure of infringing material.
(59) In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, right-holders should have the possibility of applying for an injunction against an intermediary who carries a third party’s infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under article 5. The conditions and modalities relating to such injunctions should be left to the national law of the member states.”
“Member states shall ensure that right-holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”
This provision depends on the third party being an infringer. It is immaterial whether the intermediary against whom an injunction is sought is also an infringer. He may or may not be, depending on the nature of the right infringed and the character of the intermediary’s operations.
“(23) Without prejudice to any other measures, procedures and remedies available, right-holders should have the possibility of applying for an injunction against an intermediary whose services are being used by a third party to infringe the right-holder’s industrial property right. The conditions and procedures relating to such injunctions should be left to the national law of the member states. As far as infringements of copyright and related rights are concerned, a comprehensive level of harmonisation is already provided for in [the Information Society] Directive 2001/29/EC. Article 8(3) of Directive 2001/29/EC should therefore not be affected by this Directive.
(24) Depending on the particular case, and if justified by the circumstances, the measures, procedures and remedies to be provided for should include prohibitory measures aimed at preventing further infringements of intellectual property rights. Moreover there should be corrective measures, where appropriate at the expense of the infringer, such as the recall and definitive removal from the channels of commerce, or destruction, of the infringing goods and, in appropriate cases, of the materials and implements principally used in the creation or manufacture of these goods. These corrective measures should take account of the interests of third parties including, in particular, consumers and private parties acting in good faith.”
25. The relevant substantive provisions are articles 3, 8 and 11. They provide:
“Article 3
General Obligation
1. Member states shall provide for the measures, procedures and remedies necessary to ensure the enforcement of the intellectual property rights covered by this Directive. Those measures, procedures and remedies shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
2. Those measures, procedures and remedies shall also be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.
Article 8
Right of Information
1. Member states shall ensure that, in the context of proceedings concerning an infringement of an intellectual property right and in response to a justified and proportionate request of the claimant, the competent judicial authorities may order that information on the origin and distribution networks of the goods or services which infringe an intellectual property right be provided by the infringer and/or any other person who:
(a) was found in possession of the infringing goods on a commercial scale;
(b) was found to be using the infringing services on a commercial scale;
(c) was found to be providing on a commercial scale services used in infringing activities;
or
(d) was indicated by the person referred to in point (a), (b) or (c) as being involved in the production, manufacture or distribution of the goods or the provision of the services.
Article 11
Injunctions
Member states shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. Where provided for by national law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. Member states shall also ensure that right-holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to article 8(3) of Directive 2001/29/EC.”
Compliance costs
28. style='font:7.0pt "Times New Roman"'> The starting point for any analysis of that question is that the incidence of costs, whether of compliance or of the litigation, is a matter for national law. The general principle of EU law is that national courts apply EU law to issues before them in accordance with their own procedural rules. EU law may require particular remedies to be made available in national law, as the three Directives do. Otherwise it prescribes minimum standards which the available national law remedies must satisfy. These are embodied in the principle of effectiveness, which requires that remedies must be sufficient to ensure that a Directive and any directly applicable rules of EU law are fully effective; and the principle of equivalence, which requires that remedies for infringements of EU law are at least equivalent to those which would be available for infringements of corresponding rules of national law. In addition, and partly overlapping with the principle of effectiveness, article 3 of the Enforcement Directive requires that remedies shall be “fair and equitable and shall not be unnecessarily complicated or costly”, and that they must be “effective” and “proportionate”. Within these broad limits, the terms on which an injunction is available in the High Court against an intermediary are a matter for English law and procedural practice. This is reflected in recital (59) of the Information Society Directive that the “conditions and modalities” of injunctions against intermediaries “should be left to the national law of the member states”, and the corresponding statement in recital (23) of the Enforcement Directive about the “conditions and procedures” relating to such injunctions. As the Court of Justice observed in L’Oréal SA v eBay International AG (Case C-324/09) [2012] Bus LR 1369, paras 135-138, subject to the overriding requirement that the remedies ordered in the national court must be effective to achieve the objects of the Directive and consistent with its specific provisions,
“the rules for the operation of the injunctions for which the member states must provide under the third sentence of article 11 of the Directive, such as those relating to the conditions to be met and to the procedure to be followed, are a matter for national law.”
Cf Scarlet Extended SA v Société belge des auteurs, compositeurs et editeurs SCRL (SABAM) (Case C-70/10) (2011) ECR I-11959, paras 32-33; Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV (Case C-360/10) [2012] 2 CMLR 18, paras 30-31; Tommy Hilfiger Licensing LLC v Delta Center as (Case C-494/15) [2016] Bus LR 1008, para 32.
29. In the Court of Appeal, Kitchin LJ considered that it was implicit in Recital (59) of the Information Society Directive and Recital (23) of the Enforcement Directive that it would be “entirely appropriate for a national court to order that the costs of implementation of any such injunction should be borne by the intermediary” (para 144). He suggested that the scheme of the Directives was that liability to bear the costs of compliance was the quid pro quo for the immunities in the safe harbour provisions and the exclusion of a general monitoring obligation in articles 12 to 15 of the E-Commerce Directive. As Jackson LJ put it in his short concurring judgment, the compliance costs are “part of the price which the ISPs must pay for the immunities which they enjoy under the … directives” (para 214). Finally, Kitchen LJ found support for this analysis in the reasoning of the Court of Justice in L’Oréal and in UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH (Case C-314/12) [2014] Bus LR 541.
30. With respect, I cannot agree with any of this. My reasons are as follows:
(1) The two recitals refer the terms of an injunction against an intermediary to national law without any indication one way or the other of what it would be “appropriate” for national law to say about them. The mere fact of referring them to national law indicates that a diversity of national solutions may be equally consistent with EU law.
(2) The main problem about the quid pro quo argument is that it assumes what it seeks to prove. If the Directives required intermediaries to bear the costs of complying with injunctions against them, that might at least arguably be regarded as the quid pro quo for the immunities in articles 12 to 15. But since the Directives do not deal at all with the incidence of compliance costs when an injunction is obtained against an intermediary, there is nothing from which such an inference could be drawn.
(3) The true rationale of the immunities is explained in the recitals. It is that disparities between national laws on liability are apt to distort the functioning of the single market, and that the intermediaries have little or no control over content. It has nothing to do with the incidence of compliance costs when an injunction is granted. Even without the immunities, a “mere conduit” such as an ISP, whose operations are limited to the provision of a communications network, would not have been liable for infringing a trade mark, although without the immunities caching might give rise to liability for breach of copyright. The only context in which it might make sense to speak of a quid pro quo is the condition relating to removing or disabling access to illegal content in the case of caching and hosting under articles 13 and 14. But the quid pro quo in those cases is the removal of the offending content, not the bearing of the associated cost.
(4) The judgment in L’Oréal has nothing to do with this issue. The trade mark proprietor was claiming (among other things) that an injunction should issue against eBay under article 11 of the Enforcement Directive requiring it to stop people selling infringing goods on its website. All that the Court of Justice said about costs (at para 139) was that to impose a general monitoring obligation on an on-line market place like eBay would be inconsistent with article 15(1) of the E-Commerce Directive (which forbids member states to impose such an obligation) and with article 3(1) of the Enforcement Directive (which requires that national measures “shall not be unnecessarily complicated or costly”). This means that any injunction granted under article 11 could not impose such an obligation. But I am unable to deduce from this, as Kitchin LJ seems to have done, that costs of compliance are in principle for the intermediary to bear. The Court said nothing about the incidence of compliance costs but only that so far as they are to be borne by the intermediary they must not be excessive.
(5) The same point may be made about UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH (Case C-314/12) [2014] Bus LR 541. The issue in that case was whether a website-blocking injunction should have been granted against the intermediary to block the streaming of films which infringed the claimants’ copyrights. There was no issue about the costs of compliance. The Court of Justice observed (para 50) that in deciding whether to grant an injunction, the national court must bear in mind that it “constrains its addressee in a manner which restricts the free use of the resources at his disposal because it obliges him to take measures which may represent a significant cost for him.” This certainly assumed that the compliance costs would be for the intermediary’s account. In the case of Austria, from which the reference had come, that assumption was correct. It appears from the material placed before us that the Austrian statute empowering the courts to grant website-blocking injunctions is interpreted as requiring the intermediary to bear the costs of compliance: see Allegro Filmverwertungsgesellschaft mbH v A1 Telekom Austria AG (Austrian Supreme Court, 19 May 2015), para 3.2. The Court of Justice was not suggesting that the same incidence of compliance costs would necessarily be the appropriate rule in other national jurisdictions. It could hardly have done so consistently with the assignment of such questions to national law. The effect of the decision as far as compliance costs are concerned is not that they must be borne by the intermediaries, but that if they are, then they must not be excessive.
34. It has sometimes been suggested that because ISPs benefit financially from the volume and appeal of the content available on the internet, including content which infringes intellectual property rights, it is fair to make them contribute to the cost of enforcement. This appears to have been the view of Arnold J in Twentieth Century Fox Film Corpn v British Telecommunications plc (No 2) [2012] 1 All ER 869, para 32. It was certainly a significant part of the reasoning of the Irish Court of Appeal (endorsing the judgment of Cregan J [2015] IEHC 317) in Sony Music Entertainment (Ireland) Ltd v Universal Music Ireland [2016] IECA 231, paras 77-80. The difficulty that I have with it as a matter of English law is that it assumes a degree of responsibility on the part of the intermediary which does not correspond to any legal standard. The suggestion appears to be that there is a moral or commercial responsibility in the absence of a legal one. But the law is not generally concerned with moral or commercial responsibilities except as an arguable basis for legal ones.
Costs of the litigation
Disposal