Key facts of the case:
This is an appeal brought by UPC Communications Ireland Ltd. (UPC). UPC, is a non-infringing internet service provider (ISP). In the judgment under appeal Cregan J. made an order requiring UPC to implement what is sometimes known as a form of graduated response system (GRS) within its network for the benefit of Sony Music and the other respondents who are the relevant copyright holders. The GRS order in question which was made by the High Court requires UPC to send each relevant subscriber a “cease and desist” letter upon receipt of notification of the first and second copyright infringement notifications which it receives from the rightholders. On receipt of the third copyright infringement notice, UPC is then required to send the relevant rightsholders a notification that the particular subscriber has been the subject of three such notifications. The rightsholders are then entitled to apply to court for an order terminating the subscriber’s internet broadband service.The order further provides that the rightholders are required to pay 20% of any capital expenditure incurred by UPC with a cap of €940,000 on each such expenditure. The order provides that the matter is to be listed for review before the High Court in five years from the date of the perfection of the order, but the order is otherwise to last indefinitely. The appeal concerns the jurisdiction of the High Court to grant GRS injunctions of this nature directed at non-infringing ISPs.
The copyright holders (Sony) maintain that the effect of both Article 8(3) of Directive 2001/29/EC and s. 40(5A) of the Copyright and Related Rights Act 2000 is to grant such jurisdiction. UPC maintains that the court has no jurisdiction to make an order of this kind. It submits that the order actually made is more appropriate to that of a specialist regulator vested with appropriate expertise and which is best placed to make policy decisions of this kind and that the order is not one which a court required to make judgments based only on legal rights (including equitable rights) and wrongs could appropriately make.
Outcome of the case:
The appeal was dismissed. It was held that the GRS order which had been made by the High Court was one which the High Court had jurisdiction to make and that the order further satisfied the requirements of Article 8(3) of Directive 2001/29/EC, as transposed by s. 40(5A) of the 2000 Act.
43. As the Court put it (at para. 46 of the judgment):- “Accordingly, in circumstances such as those in the main proceedings, national authorities and courts must, in particular, strike a fair balance between the protection of the intellectual property right enjoyed by copyright holders and that of the freedom to conduct a business enjoyed by operators such as ISPs pursuant to Article 16 of the Charter”.
46. (Quoting from decision of the Court of Justice in Case C-360/10 Belgische Vereniging van Auteurs, Componistenen Uitgivers CVBA  E.C.R. I- (“SABAM”)): “The protection of the right to intellectual property is indeed enshrined in Article 17(2) of the Charter of Fundamental Rights of the European Union ('the Charter'). There is, however, nothing whatsoever in the wording of that provision or in the Court's case-law to suggest that that right is inviolable and must for that reason be absolutely protected.”
46. (Quoting from decision of the Court of Justice in Case C-360/10 Belgische Vereniging van Auteurs, Componistenen Uitgivers CVBA  E.C.R. I- (“SABAM”)): “Accordingly, in circumstances such as those in the main proceedings, national authorities and courts must, in particular, strike a fair balance between the protection of the intellectual property right enjoyed by copyright holders and that of the freedom to conduct a business enjoyed by operators such as hosting service providers pursuant to Article 16 of the Charter.”
46. (Quoting from decision of the Court of Justice in Case C-360/10 Belgische Vereniging van Auteurs, Componistenen Uitgivers CVBA  E.C.R. I- (“SABAM”)): “Moreover, the effects of that injunction would not be limited to the hosting service provider, as the contested filtering system may also infringe the fundamental rights of that hosting service provider's service users, namely their right to protection of their personal data and their freedom to receive or impart information, which are rights safeguarded by Articles 8 and 11 of the Charter respectively.”
48. The Court of Justice answered this question in the affirmative, saying (at paras. 63 and 64) that such an injunction was not incompatible with EU law provided that it was necessary and proportionate and it respected the rights of the internet users:
“…… even though the measures taken when implementing an injunction such as that at issue in the main proceedings are not capable of leading, in some circumstances, to a complete cessation of the infringements of the intellectual property right, they cannot however be considered to be incompatible with the requirement that a fair balance be found, in accordance with Article 52(1), in fine, of the Charter, between all applicable fundamental rights, provided that:-
(i) they do not unnecessarily deprive internet users of the possibility of lawfully accessing the information available and
(ii) that they have the effect of preventing unauthorised access to protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging internet users who are using the services of the addressee of that injunction from accessing the subject-matter that has been made available to them in breach of the intellectual property right.