In today’s Irish Times, Mark Paul reports that “three global music labels are limbering up to seek a High Court order against Sky Ireland to force it to implement a ‘three strikes and you’re out’ policy against its broadband customers who download music from pirate sites”. In Sony Music Entertainment Ireland Ltd v UPC Communications Ireland Ltd [2016] IECA 231 (28 July 2016) [hereafter: Sony v UPC] the Court of Appeal held that the courts could indeed make just such an order, and that the costs of implementing it were to be borne 80% by the internet service provider, and 20% by the copyright rights-owner (subject to a cap). No doubt, the three labels involved in the action reported in the Irish Times – Sony Music Entertainment, Warner Music and Universal Music – will rely on this case in their action. However, since it was decided, the UK Supreme Court has handed down its decision in Cartier International AG v British Telecommunications plc [2018] 1 WLR 3259, [2018] UKSC 28 (13 June 2018) [hereafter: Cartier v BT], and it stands in stark contrast with Sony v UPC. The structure of both cases is exactly the same: a holder of intellectual property rights seeks an injunction against an online intermediary to prevent infringement of the rights-holder’s rights on the intermediary’s platform, and the intermediary seeks an order that the rights-holder should bear (some at least of the) costs of implementing the injunction. However, the resolution of the issues in both cases differs quite substantially: the UK Supreme Court in Cartier v BT granted the injunction on a basis rejected by the Irish courts, and it imposed the costs of its implementation entirely on the rights-holder seeking it. The application reported today provides an appropriate context in which to consider these issues. The basis of the injunctions in Sony v UPC and Cartier v BT will be discussed in this post, and the differing costs orders will be discussed in a subsequent one.

In Sony v UPC, the Court of Appeal upheld an order made by Cregan J in the High Court [Sony v UPC (No 1) [2015] IEHC 317 (27 March 2015)] requiring an internet service provider to implement a graduated response system against customers who infringe copyright. The system is graduated, because the responses range from initial warning letters to applications for to court for disconnection of the infringing customers. And the order was made on foot of section 40(5A) of the Copyright and Related Rights Act 2000 (also here) [hereafter: CRRA]. The case is the most recent reported stage of litigation between copyright rights-owners (such as music and movie companies) and internet service providers that has been ongoing since 2005. In EMI Records (Ireland) Ltd v Eircom plc [2009] IEHC 411 (24 July 2009) [hereafter: EMI v Eircom (No 1)], in an unopposed ex tempore judgment, Charleton J held that section 40(4) CRRA (also here) provided a basis on which to make an order requiring an ISP to block access by its customers to a website providing access to copyright-infringing material (The Pirate Bay). Section 40(3) CRRA provides that copyright is not infringed merely by providing facilities which enable the publication or distribution of a copyright work. This effectively ensures that intermediaries, such as internet service providers and social media platforms, do not infringe copyright simply by providing facilities which their customers use to infringe copyright. However, in a classic give-with-one-hand, take-with-the-other move, section 40(4) CRRA goes on to provide

Without prejudice to subsection (3), where a person who provides facilities referred to in that subsection is notified by the owner of the copyright in the work concerned that those facilities are being used to infringe the copyright in that work and that person fails to remove that infringing material as soon as practicable thereafter that person shall also be liable for the infringement.

In EMI v Eircom (No 1), Charleton J held that it was “clear” that section 40(4) CRRA

… gives an entitlement in the right circumstances to the plaintiffs to seek an order against a party who is essentially innocent in relation to copyright infringement … the pipe or channel (ie, the electronic pipe or channel in this case) down which the copyright infringing material is going can be the subject of injunctive relief under s 40(4).

The following year, in EMI Records v Eircom Ltd [2010] 4 IR 349, [2010] IEHC 108 (16 April 2010) [hereafter: EMI v Eircom (No 2)] the same judge held that data protection concerns did not preclude a settlement by which the same ISP undertook to implement a graduated-response system leading to disconnections of copyright-infringing customers.

However, in EMI Records (Ireland) Ltd v UPC Communications Ireland Ltd [2010] IEHC 377 (11 October 2010), the legal issues surrounding section 40(4) CRRA were fully ventilated, and Charleton J accepted that he had fallen into error in his ex tempore judgment in EMI v Eircom (No 1). In particular, he held that, since section 40(4) authorises a remedy only where a facility such as an ISP “fails to remove that infringing material” (emphasis supplied), it does not support injunctions either blocking customer access to third party sites, or disconnecting customers, because while they prevented the transit of infringing material, they did not remove it. Hence, he held that section 40(4) CRAA was an insufficient basis for the blocking injunction he had awarded in EMI v Eircom (No 1), and that the power to block access to internet sites, to disable access, to interrupt a transmission, to divert a transmission, and to cut off internet access in controlled circumstances, were not available on foot of that section.

The government moved to fill that gap. In 2012, after a controversial consultation process, a new section 40(5A) was added to the 2000 Act by the European Union (Copyright and Related Rights) Regulations 2012 (SI No 59 of 2012) (also here), providing simply that the “owner of the copyright in a work may, in respect of that work, apply to the High Court for an injunction against an intermediary …”, and that the court “shall have due regard to the rights of any person likely to be affected by virtue of the grant of any such injunction”.

The following year, in EMI Records Ireland Ltd v UPC Communications Ireland Ltd [2013] IEHC 274 (12 June 2013), McGovern J made an order pursuant to section 40(5A) CRRA requiring an ISP to block access by its customers to Pirate Bay, thereby effectively achieving the position envisaged by Charleton J in his ex tempore judgment in EMI v Eircom (No 1) in 2009. The next obvious stage in the litigation was to seek to rely on section 40(5A) to obtain the kind of graduated response order which Charleton J had approved EMI v Eircom (No 2). And in Sony v UPC, the Court of Appeal held that section 40(5A) provided the necessary jurisdiction to make such an order. It has since provided the basis of similar subsequent applications to the High Court. And it is, no doubt, the basis of the application reported today.

In Case C–106/89 Marleasing SA v La Comercial Internacionale de Aliementacion SA [1990] ECR I–4135 (ECLI:EU:C:1990:395; ECJ, 13 November 1990) [8], the ECJ held that a national court must interpret provisions of national law, as far as possible, in the light of the wording and the purpose of applicable EU law. Hence, in EMI v Eircom (No 1), Charleton J held that section 40(4) was derived from, and therefore had to interpreted in conformity with, Article 8(3) of the InfoSoc Directive (Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ L 167, 22.6.2001, p. 10–19)), which requires Member States to “ensure that rightholders 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”. However, in EMI v UPC, Charleton J held that the terms of section 40(4) were unambiguous, and could not be interpreted to give effect to section 8(3) of the InfoSoc Directive.

Similarly, in Smith v Meade [2016] IECA 389 (16 December 2016), which is the leading case on the application of the Marleasing principle in Ireland, Hogan J (Irvine and Hedigan JJ concurring) held the unambiguous words of the relevant Irish legislation could not be interpreted to give effect to the provision of the relevant Directive, because to do so “would do violence to the actual wording” of the Irish legislation. Hogan J considered that the Directive might be given effect by disapplying some of the relevant legislation, and referred some questions to the CJEU on the consequences of such disapplication. However, there is nothing that can be excised from section 40(4) CRRA to permit it to reach blocking or disconnection injunctions, so this solution would not have been available to Charleton J in the EMI cases.

[The relevant Irish legislation in Smith v Meade was section 65(1)(a) of the Road Traffic Act 1961 (also here) (as substituted by Regulation 7(1) of the European Communities (Road Traffic) (Compulsory Insurance) (Amendment) Regulations (SI No 347 of 1992) (also here)) and of Regulation 6 of the of the Road Traffic (Compulsory Insurance) Regulations 1962 (SI No 14 of 1962) (also here) (as substituted by Regulation 6 of SI No 347 of 1992). The provision of the relevant Directive was Article 3(1) of the Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (OJ L129, 19.05.1990, p. 33 -35). The questions referred to the CJEU are here; the Opinion of Bot AG is here; the decision of the CJEU is awaited update was handed down on 7 August 2018].

The third sentence of Article 11 of the Enforcement Directive (Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004, p. 45–86; corrigendum OJ L 195, 2.6.2004, p. 16–25) provides that Member States shall “ensure that rightholders 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”. This is in exactly similar terms to Article 8(3) of the InfoSoc Directive, and it is expressed to be “without prejudice to” that Article. Hence, it restates for all intellectual property rights the same remedy that already applies in the context of copyright. In that context, these Articles complement one another (see Sony v UPC [2016] IECA 231 [29] (Hogan J)). Referring to Article 11 of the Enforcement Directive, in addition to, or in substitution for, Article 8 of the InfoSoc Directive would not have changed Charleton J’s analysis one jot in EMI v UPC. An attempt to provide an interpretation of section 40(4) CRRA in conformity with Article 11 of the Enforcement Directive would have run into the same problems with the literal interpretation of that section, and if the terms of Article 8 of the InfoSoc Directive could not force a conforming interpretation upon section 40(4) CRRA, then the exactly similar terms of Article 11 of the Enforcement Directive would also not be able to force a conforming interpretation upon that section.

Although it is not at issue in Sony v UPC, the third sentence of Article 11 of the Enforcement Directive is at the heart of the jurisdiction issue in Cartier v BT. The claimants sought an injunction requiring ISPs to block access to certain websites selling goods which infringed Cartier’s trademarks. Section 37(1) of the Senior Courts Act 1981 provides that the High Court may “grant an injunction … in all cases in which it appears to be just and convenient to do so”. At first instance (sub nom Cartier International AG v British Sky Broadcasting Ltd [2015] 1 All ER 949, [2014] EWHC 3354 (Ch) (17 October 2014) [127], [132]) Arnold J held that

… section 37(1) can and should be interpreted in compliance with the third sentence of Article 11 by virtue of the Marleasing principle. If it were otherwise, the UK would be in breach of its obligations under the Directive.

This was affirmed by the Court of Appeal ([2017] 1 All ER 700, [2016] EWCA Civ 658 (06 July 2016) [67]-[74] (Kitchin LJ, Jackson LJ concurring). But Kitchin LJ went further, and held that, to give full effect to Article 11,

… this court must now recognise pursuant to general equitable principles that this is one of those new categories of case in which the court may grant an injunction when it is satisfied that it is just and convenient to do so.

Briggs LJ dissented on the costs point (which I will considered in a future post), but agreed “with both the analysis and conclusions of Kitchin LJ” (ibid, [197]) on every other issue, including the jurisdiction point. Moreover, even as Kitchen LJ was prepared to go further than Arnold J, so Briggs LJ was prepared to go further again, and hold that blocking injunctions are a natural development of the court’s enforcement of equitable duties, and that “the courts could and probably would have developed this jurisdiction regardless of the requirement in the two Directives that it be made available as specified” (ibid, [205]). The Supreme Court did not grant leave to appeal (pdf) on this jurisdiction question. Nevertheless, Lord Sumption [perhaps with an eye to Brexit-proofing the jurisdiction] went out of his way to agree “with the view expressed by Briggs LJ in his dissenting judgment in the Court of Appeal that the website blocking order made in this case could have been made quite apart from the power derived from European law, on ordinary principles of equity” ([2018] UKSC 28 [15]).

Hence, Cartier v BT provides four separate considerations by which Charleton J’s assumptions in EMI v Eircom (No 1) might have been supported. First, the strong form of the Marleasing interpretative obligation adopted by Arnold J might have forced a conforming interpretation upon section 40(4) CRRA, though the subsequent Smith v Meade suggests not.

Second, the Irish equivalents of section 37(1) of the Senior Courts Act 1981 are to be found in Order 50 Rule 6(1) of the Rules of the Superior Courts (RSC) (which is in similar terms to s37(1) SCA and shares the same antecedents) and section 28(8) of the Supreme Court of Judicature (Ireland) Act 1877, as applied to the High Court by section 48 of the Courts (Supplemental Provisions) Act 1961 (also here). Section 27(7) of the 1877 Act is in even more general terms, and it too is applied to the High Court by section 48 of the 1961 Act. As Hogan J observed in Albion Properties Ltd v Moonblast Ltd [2011] 3 IR 563, [2011] IEHC 107 (16 March 2011) [24] the effect of these sections is that the High Court “enjoys a general jurisdiction to grant an injunction whenever it is just and convenient to do so”, and this jurisdiction might have been pressed into service by Charleton J in the EMI cases just as it was by Arnold J in Cartier v BT [it may be that Hogan J’s reference in Albion to section 27(7) is a typographical error for section 28(8), but that does not change the essence of the point in this paragraph].

Third, the principles of equity might have been reformulated in the light of the third sentence of Article 11 of the Enforcement Directive or of the exactly similar terms of Article 8(3) of the InfoSoc Directive, along the lines suggested by Kitchin LJ. Indeed, Hogan J comes close to saying as much in Sony v UPC ([2016] IECA 231 [49]):

Article 8(3) of the 2000 Directive does not simply seek to fill a jurisdictional lacuna in the systems of civil procedure of the Member States by allowing rightholders to apply for an injunction against non-infringing ISPs. This provision is not simply procedural, but it potentially changes the substantive law by requiring Member States to provide their judicial systems with the authority to grant injunctions of this kind, … .

Or, fourth, the ordinary principles of equity might have provided such an injunction independently of the influence of EU law, as suggested by Briggs LJ and Lord Sumption. Indeed, there are hints of such possibilities in Hogan J’s discussion of the position under national law in the Court of Appeal in Sony v UPC (see, especially, [2016] IECA 231 [21] (“the Constitution certainly imposes an obligation on the courts to fashion adequate and effective remedies”); [32] (the “proper role of the courts is to play their appropriate part in the evolution of the common law in its application to new conditions and circumstances” (citing MR & DR v An tArd Chláraitheoir [2014] IESC 60 (07 November 2014) [2.5] (Clarke J)).

However, these routes were not explored before or by Charleton J in the EMI cases, so he concluded that blocking injunctions, and similar orders, were not available as a matter of Irish Law. The gap was filled by section 40(5A) CRRA; but, if it were to prove limited in the future, then any such limitation might be ameliorated by the successive application of the four Cartier v BT considerations. In Sony v UPC ([2016] IECA 231 [51]-[52]; see also [63]-[64]), Hogan J regarded section 40(5A) CRRA as the transposition of Article 8(3) of the InfoSoc Directive. For him, it followed that “it gave the High Court the power for the first time to grant injunctions” against ISPs (ibid, [53], emphasis added), with the result that “many of the substantive rules governing the granting of injunctions are no longer necessarily applicable to the grant of s. 40(5A) injunctions” (ibid, [54]). This points up the difference in Cartier v BT between the approach of Arnold J and Kitchin LJ on the one hand, and that of Briggs LJ and Lord Sumption on the other. As Hogan J points out, on the former approach, where EU law influences the jurisdiction for the injunction, it can also influence the substantive rules on which the injunction is granted. On the other hand, on the latter approach, the matter is simply a matter of the application of equity’s “existing [and] well-recognised conditions or modalities” ([2016] EWCA Civ 658 [205] (Briggs LJ) (emphasis added)). Of course, as Hogan J also points out, the results may not be all that dissimilar. In the application of EU law ([2016] IECA 231 [55]):

[m]any of the governing principles – such as requirements of necessity, proportionality and general cost effectiveness – are also reflected in the traditional principles found in our law governing the grant of injunctions, even if the terminology is different and even if the application of these principles will also call for a slightly different approach given that the order will be directed against an entity which, it must be recalled, has committed no legal wrong.

In Sony v UPC and Cartier v BT, the Courts differed on how the costs of the implementation of the blocking injunction were to be borne. Whether that difference flowed from the EU inflexion of the jurisdiction recognised by the Irish Court of Appeal in Sony v UPC, or from the purely equitable nature of the jurisdiction recognised by the Supreme Court of the UK in Cartier v BT is a matter for a susbequent post. Meanwhile, that EU inflexion had a significant impact on the interpretation of section 40(5A) CRRA. It is in extremely wide terms. It simply provides that a rights-owner may apply to the High Court for an injunction against an ISP, and that the court must have due regard to the rights of anyone likely to be affected by the injunction. There is no equivalent of the detailed list of matters to be taken into account by the court in deciding whether to grant an injunction which is provided in Australia in section 115A of the Copyright Act 1968 (Cth) (as inserted by the Copyright Amendment (Online Infringement) Act 2015; see David Lindsay “Website Blocking Injunctions to Prevent Copyright Infringements: Proportionality and Effectiveness” (2017) 40(4) University of New South Wales Law Journal 1507 (pdf via here)). Nor does the section require the court to consider the kinds of questions considered by Arnold J and the Court too Appeal in Cartier v BT case, including an express assessment of what threshold conditions have to be satisfied and what principles should be applied in deciding whether or not to make such an order. However, in Sony v UPC, Hogan J in the Court of Appeal held the power to award an injunction provided by section 40(5A) CRRA had to be read in the light of relevant EU law, and in particular in the light of the jurisprudence of the CJEU requiring that the protection of the fundamental right to intellectual property by means of Article 8(3) of the InfoSoc Directive (as transposed by section 40(5A) CRRA) must be balanced against the protection of other fundamental rights (see, eg, Case C-275/06 Productores de Música de España (Promusicae) v Telefónica de España SAU [2008] ECR I-271 (ECLI:EU:C:2008:54; Grand Chamber, ECJ; 29 January 2008); Case C-324/09 L’Oréal SA v eBay International AG [2011] ECR I-6011 (ECLI:EU:C:2011:474; Grand Chamber, CJEU; 12 July 2011); Case C-70/10 Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) [2011] ECR I-11959 (ECLI:EU:C:2011:771; Third Chamber, CJEU; 24 November 2011); Case C-360/10 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV (ECLI:EU:C:2012:85; Third Chamber, CJEU; 16 February 2012); Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH (ECLI:EU:C:2014:192; Fourth Chamber, CJEU; 27 March 2014)). For Hogan J, that balance raised five central questions; Sony was obliged to establish ([2016] IECA 231 [65]):

(i) [that the injunction that they sought was] necessary;
(ii) that the costs involved were not excessive or disproportionate and that the order itself should not be unduly complicated;
(iii) that the cost sharing proposals were fair and reasonable;
(iv) that the order respected the fundamental rights of the parties affected, including internet users and
(v) that the duration of the proposed injunction and the provisions for review were reasonable.

When these five questions were answered, Hogan J held that the injunction granted by Cregan J was properly made. The second and third requirements relate to costs, and will considered in a subsequent post. The first requirement identified by Hogan J was that the order must be necessary, and he held that the was little doubt that this was so. Since EU law prohibits the general monitoring of customers by ISPs (eg, Scarlet Extended [51]; Netlog [44]-[45]), Hogan J held that the three-strikes order was the most “obvious” ([2016] IECA 231 [67]) practical solution. Cregan J in the High Court accepted the plaintiffs’ evidence that a such an order would be likely to deter future infringing activity, and Hogan J in the Court of Appeal held that this was sufficient to satisfy the necessity test (ibid, [67]).

On the other hand, strong doubts have been expressed about the efficacy of graduated response regimes (see, eg, Rebecca Giblin “Evaluating Graduated Response” 37 Columbia Journal of Law & the Arts 147 (2014)). Moreover, the caselaw of the CJEU referred to by Hogan J (as well as that of the European Court of Human Rights) establishes that, in any analysis of the necessity of an infringement of rights, the effects upon the rights must be proportional to the legitimate objective being pursued by the infringement (eg, Promusicae [68]; UPC Telekabel Wien [46]). In neither the High Court nor the Court of Appeal was there any such analysis of the proportionality of the order made by Cregan J. It is true that the fourth requirement identified by Hogan J was that the order respected the fundamental rights of the parties affected, including internet users. Nevertheless, his consideration of this issue was very cursory. Approving Cregan J in the High Court, he held that the order respected the ISPs’ customers’ rights ([2016] IECA 231 [83]-[87]). However, he did not consider substantive rights such as the rights of ISPs to conduct a business (in Article 16 of the Charter of Fundamental Rights of the EU), their freedom to provide services (in Article 56 of the Treaty on the Functioning of the EU), and their right to communicate (an unenumerated right found in Art 40.3.1 of the Irish Constitution). Nor did he consider the rights of the ISPs’ customers to expression (in Article 10 of the European Convention on Human Rights, Article 11 CFR EU, and Article 40.6.1(i) of the Irish Constitution), communication (in Art 40.3.1 of the Irish Constitution, again), privacy (in Article 8 ECHR; Articles 7&8 CFR EU; and Article 40.3.1 of the Irish Constitution) and access to information (Article 11 CFR EU). Admittedly, UK authority considered and approved by Arnold J and the Court of Appeal in Cartier v BT concludes that blocking injunctions are proportionate infringements upon such rights; and it would not have been a surprise if a similar consideration of authority led to the conclusion that the three-strikes order at issue in Sony v UPC was likewise a proportionate infringement upon such rights. But it would have been better to have had an express holding to this effect.

Finally, the fifth requirement identified by Hogan J was that the duration of the proposed injunction and the provisions for review must be reasonable. Cregan J’s order in the High Court provided for a review after five years, so as not to constrain the parties to a regime which might well be rendered obsolete by changing technology. Hogan J held that this understandable anxiety was sufficiently addressed by the provision for liberty to apply already contained in the order.

The Court of Appeal in Sony v UPC therefore substantially upheld the order of the High Court and dismissed the appeal. This is an important decision, which will be welcomed by rights-owners even as ISPs cavil at the costs of compliance. Notwithstanding that the Irish courts have reached the same conclusion as the UK courts that there is a jurisdiction to grant injunctions against ISPs, they have done so on very different grounds. The approach of Arnold J in Cartier v BT was one which Charleton J held was not open to him in EMI v UPC, so the Irish jurisdiction is instead now founded upon section 40(5A) CRRA. As Hogan J emphasised in Sony v UPC, this section must be interpreted in the light of Article 8(3) of the InfoSoc Directive and other applicable principles of EU law. Moreover, as the Cartier v BT case proceeded up through the UK courts, Arnold J’s approach was refined and expanded, in ways that have not yet been considered in the Irish courts. Given the breadth of section 40(5A), they are unlikely to do so in the copyright context, whether in the case reported today, or otherwise. However, the lesson of Cartier v BT is that they may yet be invited to do so in the context of another intellectual property right. The differing approaches of the two jurisdictions as to the costs of implementing the injunction may be the stimulus to such a case, and that issue will be considered in a subsequent post. For present purposes, on the jurisdiction issue, although the proportionality aspects of Hogan J’s reasoning in Sony v UPC are thin, his judgment is sufficiently clear that the legal issues must now be regarded as settled as a matter of Irish law, and will therefore no doubt provide the basis for the application and order in the case reported today.