The Graduated Response is implemented by the Digital Economy Act 2010, which provides for a duty on ISPs to forward notifications of infringement to subscribers and on request by the right holder to provide an anonymised list of notifications received in respect of a given account. On application by the right holder under the Norwich Pharmacal jurisdiction, the court may order the ISP to disclose the identity of the subscriber, so that the right holder can bring proceedings. The implementation of the Act is under the control of the telecommunications regulator, OFCOM.
The 2010 Act provides for the future possibility of requiring the implementation of technical measures by ISPs, should the notification and disclosure system fail significantly to reduce peer-to-peer piracy.
While the framework is set by the Act, the practical implementation of the Graduated Response depends on codes of conduct. On 28 May 2010, OFCOM published a draft “initial obligations code” to govern the first stage of the UK Graduated Response, the sending of notifications and disclosure of subscriber notification histories.
On 30 March 2010, the Government had published a consultation paper addressing the issue of costs. It proposed that participating right holders should pay 75% of the costs of the system, with the balance being paid by ISPs. A draft Statutory Instrument was laid before Parliament to this effect, but was held to be partially unlawful in judicial review proceedings, as described below.
On 8 July 2010, ISPs BT and TalkTalk issued judicial review proceedings, seeking to strike down the Act. On 11 November 2010, a High Court judge gave permission for the application to proceed. The hearing took place over 4 days on the 23 – 28 March 2011 at the Royal Courts of Justice in London. Judgment was given on 20 April, dismissing the challenges to the Act. However, the judge, Mr Justice Kenneth Parker, held that, in so far as it required ISPs to contribute to the costs incurred by OFCOM or the proposed appeals body, the Costs Order was inconsistent with Art. 12 of the Authorisation Directive 2002/20/EC and hence invalid.
On 27 May 2011, BT and TalkTalk announced their intention to appeal to the Court of Appeal. The Court of Appeal handed down its judgment on 6 March 2012, dismissing all the ISPs’ challenges to the Act (see further details in the GR Blog). The Court accepted, however, that the Costs Order should not have required ISPs to pay any of the costs of the appeals body set up to handle subscriber appeals.
In August 2011, the Government had issued a statement on Next Steps for implementation of the Digital Economy Act, in the wake of the first instance decision in the judicial review proceedings. It confirmed the Government’s intention to proceed with implementation, and indicated that a refundable £20 fee would be required of those making appeals under the notification procedure, to discourage vexatious appeals. It also indicated that the Government would not bring into force the Act’s provision on site blocking, essentially on grounds of practicality. Paradoxically, the statement followed shortly after the decision of the High Court to order site blocking under the existing provisions of the Copyright, Designs and Patents Act 1988.
On 26 June 2012 OFCOM published its revised draft Code of Initial Obligations, together with a consultation paper. The consultation closes on 26 July 2012. Subject to review by the European Commission under the Technical Services Directive, the Code will be laid in Parliament around the end of 2012. OFCOM expects the first customer notification letters to be sent in early 2014. It will review the criteria for applying the code to ISPs once the obligations have been operating for six months. On the same date, OFCOM issued a consultationon a draft Statutory Instrument on the allocation of costs, which closes on 18 September 2012.
However, the process of implementation of the Act became much delayed. As a result, right holders and ISPs began to negotiate with a view to creating a voluntary scheme. In May 2014 the terms of a draft agreement for the sending of warning notices and the keeping of records was leaked to the BBC. This system would not result in the voluntary disclosure of subscriber names to right holders and no sanction is required to be imposed by ISPs as a result of the continued receipt of notices by their subscribers.
On 28 July 2011 in Twentieth Century Fox Film Corp & ors v British Telecommunications plc  EWHC 1981 (Ch), Mr Justice Arnold issued an injunction under section 97A of the 1988 Act, ordering ISP British Telecom to block access to the pirate Newzbin2 site. Newzbin was a commercial web site that facilitates access to pirated films, music, games and books on Usenet. British Telecom already uses its proprietary Cleanfeed technology to block other illegal sites and it is assumed that it will add Newzbin2 to the list of blocked sites. On 26 October 2011, the judge issued a supplementary judgement specifying the precise form of order. Since then, several similar actions have been brought by the film and record industries and injunctions granted.