Cartier International AG and others v British Telecommunications Plc and another

The Supreme Court decided that, as a matter of English law and subject to EU law limits, an innocent intermediary which is ordered by the court to implement a website‑blocking injunction is ordinarily entitled to be indemnified by the rights‑holder for its reasonable costs of implementing the order. The court grounded this on the established equitable jurisdiction to require assistance from an intermediary who has been "mixed up" in a wrong (Norwich Pharmacal and its progeny), the analogy with disclosure, freezing and delivery‑up orders, and the legal innocence of a "mere conduit" ISP which has no liability for the infringement absent court compulsion. The court held that the EU Directives (notably the E‑Commerce, Information Society and Enforcement Directives and their Articles 12–15, 8 and 11) do not require intermediaries to bear implementation costs: the incidence of such costs is a matter for national law subject to the principles of effectiveness, equivalence and proportionality.

Background and parties. The respondents (companies in the Richemont group) obtained website‑blocking injunctions in the High Court against the principal UK ISPs, including BT, to prevent access to websites selling counterfeit trade mark goods. The ISPs do not create or host the content and act as "mere conduits".

Procedural history. Arnold J granted injunctions and followed the then prevailing practice of leaving ISPs to bear implementation costs. The Court of Appeal ([2016] EWCA Civ 658) mostly upheld Arnold J, with a dissent on costs. The case came to the Supreme Court on the question of who should bear the costs of implementing such blocking orders.

Nature of the claim / relief sought. The respondents sought injunctive relief to block access to specified target websites (and related domains, IPs and URLs) used to infringe their trade marks. The ancillary issue before the Supreme Court was whether the rights‑holders should indemnify the ISPs for implementation costs of the orders (in particular: initial marginal implementation, ongoing update costs, and costs/liabilities from malfunction or over‑blocking).

Issues framed. The court identified (i) the legal basis for website‑blocking injunctions in domestic law (equitable jurisdiction including Norwich Pharmacal principles) and under EU Directives; (ii) whether the Directives require intermediaries to bear compliance costs as a quid pro quo for the safe harbours; and (iii) whether, on English law principles, an innocent intermediary should be indemnified in respect of reasonable costs of complying with such an order.

Court’s reasoning. The Court analysed the equitable origins of the Norwich Pharmacal jurisdiction and related authorities (disclosure, freezing and delivery‑up practice) and concluded that the ordinary domestic rule is that an innocent third party required by the court to assist claimants should be indemnified for compliance costs. The EU Directives were examined: the Court held that they leave the detailed modalities of injunctions to national law and do not themselves determine the incidence of compliance costs; moreover the safe harbours and monitoring prohibitions are not a sufficient basis for reading in a requirement that intermediaries pay compliance costs. The legal innocence of a "mere conduit" ISP was emphasised; by contrast intermediaries performing caching or hosting may engage different considerations under articles 13 and 14. Applying these principles, the Supreme Court varied the orders so that the respondents must indemnify the appellants in respect of reasonable costs in categories (iii), (iv) and (v) (processing/configuring the block, updating blocks and costs/liabilities from malfunction/over‑blocking). The Court confirmed that costs of the litigation itself remained a matter for the judge's discretion and that the ISPs were not to be deprived of litigation costs where they legitimately contested jurisdiction.

Wider context. The court noted this was the first trade mark case for website blocking and emphasised the parallels with established practice in Norwich Pharmacal and other equitable remedies; it also observed that national law remains the appropriate place to allocate compliance costs subject to EU legal limits.

Appeal allowed in part. The Supreme Court varied the High Court orders so that the respondents must indemnify the appellants (and other ISPs similarly placed) in respect of their reasonable costs of processing and implementing the blocking orders in the specified categories (marginal initial implementation, ongoing updates in response to notifications, and costs/liabilities from malfunction/over‑blocking). The court reasoned that, under English equitable principles (Norwich Pharmacal and analogous authorities), an innocent intermediary compelled to assist must ordinarily be indemnified; EU Directives do not oblige intermediaries to bear those costs and the incidence of compliance costs is a matter for national law within EU limits.

On appeal from the Court of Appeal ([2016] EWCA Civ 658). Arnold J had granted website‑blocking injunctions and left ISPs to bear implementation costs; the Court of Appeal (majority Jackson and Kitchin LJJ, Briggs LJ dissenting) upheld that approach. The Supreme Court allowed the appeal in part, varying the orders to require the rights‑holders to indemnify ISPs for specified reasonable implementation costs.