In our January E-Bulletin we reported to you that the High Court had allowed BT and Talk Talk to apply for judicial review of certain parts of the Digital Economy Act 2010 (the Act) and the Copyright (Initial Obligations)(Sharing of Costs) Order 2011 which is currently before Parliament (the draft Order).  We can now inform you that on the 20 April 2011 the High Court rejected all of the grounds on which BT and Talk Talk sought judicial review.

The contested provisions included sections 3 to 18 of the Act which relate to online infringement of copyright and impose various obligations on Internet Service Providers (ISPs) including:

  • Notifying a subscriber if an Internet Protocol (IP) address associated with that subscriber is reported by a copyright owner as being used to infringe copyright; and
  • Providing copyright infringement lists to copyright owners.  Whilst these lists would initially be anonymous the copyright owner could apply to the courts for an order to obtain the names and addresses of those subscribers.

BT and Talk Talk, as well as arguing that the above provisions and the draft Order were incompatible with EU law, argued that the provisions of sections 3 to 18 represented a disproportionate response to concerns surrounding unlawful peer-to-peer file sharing.

Whilst the judgement covers a range of grounds, mostly based on EU law, the argument based on proportionality was perhaps the most significant. The High Court explored the risk that the provisions would impact upon and have a negative effect on innocent internet users whose internet service has been used for illicit purposes by third parties and the risk that the provisions would have a chilling effect on internet use.  It also examined the concerns which BT and Talk Talk had raised more generally about the way in which the proportionality assessment was conducted by the Government. The High Court was not prepared however to find the provisions of the Act to be disproportionate.  This was on the basis that the Act concerned an area in which the judge emphasised that substantial weight needed to be given by the court to the balance struck by Parliament, and in relation to which Parliament had to be given a wide margin of discretion.

BT and Talk Talk and other copyright owners were granted some relief as the High Court did accept that the draft Order which provided the costs of the ISPs and Ofcom in relation to the initial obligations to be split 75:25 between the copyright owners and the ISPs breached EU law on the basis that the costs incurred by Ofcom or the appeals body imposed on the ISPs amounted to 'administrative charges' which did not fall within charges allowed under EU law.

The Government will therefore have to re-draft the draft Order but they will be relieved, no doubt, at the decision in general.  That relief may be short-lived however because a spokesperson for Talk Talk has been quoted as saying that it is considering an appeal or a reference to the ECJ.

The full text of the decision can be found here.

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