In a move which was met with relief from copyright owners but anger by ISPs, the High Court rejected all of the grounds on which BT and TalkTalk sought review of the provisions of the Digital Economy Act 2010 which imposed various obligations on internet service providers (ISPs) aimed at reducing online copyright infringement.

The Digital Economy Act obligations included requiring ISPs to notify their subscribers if their internet protocol addresses were reported in copyright infringement reports by copyright owners as being used to infringe copyright and to provide copyright owners with copyright infringement lists for subscribers about whom the number of copyright infringement reports has exceeded a certain threshold.

The court rejected the arguments put forward that the measures were incompatible with data protection legislation, incompatible with exemptions for ISPs who were "mere conduits" of information under the E-Commerce Directive or disproportionate.

In particular, in July 2010, British Telecommunications plc and TalkTalk Telecom Group plc, the claimants, applied for judicial review of the provisions of the Digital Economy Act mainly on the grounds that:

·   The provisions of the Digital Economy Act constituted a technical regulation within the Technical Standards Directive and should therefore have been notified to the European Commission before enactment; as they had not been, the provisions were unenforceable.

·  The provisions of the Digital Economy Act were incompatible with the E-Commerce Directive.

·  The provisions of the Digital Economy Act were incompatible with the E-Privacy Directive.

·   The provisions of the Digital Economy Act were disproportionate in their effect. The claimants also argued that the contested provisions were incompatible with the Authorisation Directive.

The claimants also sought to challenge the draft Costs Order on the same grounds as those on which it challenged the Digital Economy Act.

Whereas the application for judicial review was allowed, finding that each of the four grounds of challenge was arguable, at the hearing before the High Court, the High Court rejected all of the grounds on which the claimants challenged the Digital Economy Act, but accepted one ground of challenge to the draft Costs Order, specifically that the draft Costs Order breached Article 12 of the Authorisation Directive insofar as the "qualifying costs" it imposed amounted to "administrative charges" not relating to any of the matters specified in Article 12, so that those charges were unlawful.

The judgment of the High Court covered a wide range of grounds including the scope of immunity for ISPs as "mere conduits" under Article 12 of the E-Commerce Directive, and what amounts to "monitoring" under Article 15 of the E-Commerce Directive. The argument based on proportionality was wide-ranging including concerns that the provisions will have a chilling effect on internet users, particularly since a person may be sent a CIR if the IP address associated with them is identified in relation to an infringement, even if they are not themselves the infringer but have allowed others to use their internet connection. However, the judge was not prepared to find the provisions to be disproportionate, given that the Digital Economy Act concerned an area in which the judge emphasised that substantial weight had to be given by the court to the balance struck by the primary decision maker, Parliament, and in relation to which Parliament had to be given a wide margin of discretion.

A spokesperson for Talk Talk has been quoted as saying that it is considering appealing the decision or seeking a reference to the ECJ. The case will also mean that the draft Costs Order will have to be re-drafted to address the court's finding that the "qualifying costs" it imposed were inconsistent with Article 12 of the Authorisation Directive.

In the second part of the article, I will be analysing the claims and the law discussed in this case.

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