03 August 2011

Copyright: Twentieth Century Fox Film Corp. v British Telecommunications Plc

In Twentieth Century Fox Film Corporation and Others v Newzbin Ltd. [2010] EWHC 608 (Ch), [2010] ECC 13, [2010] FSR 21, [2010] EMLR 17, [2010] ECDR 8, members of the Motion Picture Association of America Inc. ("the MPAA") sued an English company called Newzbin Ltd. ("Newzbin") in the Chancery Division for copyright infringement. Newzbin operated a website through which subscribers could search the Usenet for files that members of the public had posted download and view them. I explained how the Usenet worked in my article Reflections on Newzbin which I posted to my chambers website on 2 Sep 2010.

Much, though by no means all of the matter posted to the Usenet infringes copyright including the copyrights of some of the MPAA's member studios in their films and television shows. The way that was done was to digitize a film, TV programme, sound recording, book or other work - that is to say convert it into sequences of ones and noughts known as binaries. As can be imagined, the binary file for a film can be very large indeed so it has to be broken down into parcels that are laborious to locate, download, collate and reconstruct. As few members of the public have the skill, time, patience or technical skills to do that work the Usenet was not worth bothering about for most copyright owners. After all, the quality of much of the stuff on the internet was very low - films recorded in a cinema with a camcorder - and most people with a life preferred to visit the cinema on an Wednesday with a friend who had an Orange mobile phone, wait for the DVD to appear in Tesco or perhaps a little bit longer still for it to be shown on telly. The threat posed by Newzbin to the MPAA and other copyright owners was that its web based service could be used by people with few technical skills and it charged users very little. In other words, it made piracy a viable alternative to watching a film in the cinema or on telly or buying the DVD.

As I explained in "Copyright: Twentieth Century Fox v Newzbin" and "Reflections on Newzbin" I took over the defence of Newzbin at a very late stage after all the evidence was in. All I could do was make oral and written submissions on the company.'s behalf. Despite my best efforts Mr Justice Kitchin found on 29 March 2010 that Newzbin had infringed the MPAA's copyrights in some of their films by authorization, participating in a common design and communicating those works to the public. There was, however, further argument in April 2010 over the terms of the injunction as a result of which his lordship ordered:
"2. The Defendant shall be restrained (whether acting by its directors, officers, servants, agents or any of them or otherwise howsoever) from infringing copyright in or relating to the following motion pictures and television programmes:
(i) Those identified in the lists provided to the Defendant on 21 May 2008, 29 May 2009 and 8 April 2010;
(ii) Those identified in any other written list provided in electronic form to the Defendant or its solicitors hereafter;
(iii) Those identified in any list that is made available on-line at any URL of which the Defendant or its solicitors are notified in writing hereafter.

3. The Defendant shall ensure that users of its Newzbin Website or any other service its provides cannot, by use of the said website or service, infringe copyright in or relating to the following motion pictures and television programmes, episodes and series:
(i) Those identified in the lists provided to the Defendant on 21 May 2008, 29 May 2009 and 8 April 2010;
(ii) Those identified in any other written list provided in electronic form to the Defendant or its solicitors hereafter;
(iii) Those identified in any list that is made available on-line at any URL of which the Defendant or its solicitors are notified in writing hereafter."
The MPAA had sought a broader order under s.97A of the Copyright, Designs and Patents Act 1988 restraining Newzbin Ltd "from including in its indices or databases entries identifying any material posted to or distributed through any Usenet group in infringement of copyright". That section provides as follows:
"(1) The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.
(2) In determining whether a service provider has actual knowledge for the purpose of this section, a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, amongst other things, shall have regard to B
(a) whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c) of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013); and
(b) the extent to which any notice includes -
(i) the full name and address of the sender of the notice;
(ii) details of the
infringement in question.
(3) In this section "service provider" has the meaning given to it by regulation 2 of the Electronic Commerce (EC Directive) Regulations 2002."
Mr. Justice Kitchin refused to make that order for the following reasons:
"First, it is apparent from the terms of Directive 2001/29/EC that it is contemplating the grant of an injunction upon the application of rights holders, yet the claimants are seeking an injunction to restrain activities in relation to all binary and all text materials in respect of which they own no rights and about which I have heard little or no evidence. Second, I do not accept that the defendant has actual knowledge of other persons using its service to infringe all such rights. Therefore I am not persuaded I have the jurisdiction to grant such an injunction in any event. Third, the rights of all other rights holders are wholly undefined and consequently the scope of the injunction would be very uncertain. In my judgment the scope of any injunction under section 97A(2) [sic] should extend no further than that to which I have already concluded the claimants are entitled, namely an injunction to restrain the defendant from infringing the claimants' copyrights in relation to their repertoire of films."
After the action Newzbin went into creditors' voluntary liquidation. Its website continued until 17 May 2010 and then disappeared.

Shortly afterwards a new Newzbin service ("Newzbin II") appeared hosted on Swedish servers at the previous URL the domain name of which is registered in the Seychelles. On 23 Sept 2010 the MPAA asked BT to block access to the new Newzbin service or at least not oppose an application under s.97A of the Act. BT refused to block access to the site on the ground that it would face legal liability on a number a fronts without an order and that it could not decide whether or not to oppose the order without seeing the papers. On being served with the claim form and application notice BT decided to oppose the application. It has to be said that it did so with considerable vigour making every point that could reasonably be made in that regard.

This action has raised considerable interest not just among intellectual property lawyers or even the entertainment industry but among the public at large. It was one of the few IP cases to make the news headlines when Mr. Justice Arnold gave judgment on 28 July 2011 (Twentieth Century Fox Film Corp. and Others v British Telecommunications Plc [2011] EWHC 1981). There are two reasons for such interest. The first is that the Digital Economy Act 2010 ("DEA") was passed in the dying days of the last government after considerable lobbying from the media industry. The second is that Professor Hargreaves has delivered his report "Digital Economy: A Review of Intellectual Property and Growth" which I discussed on 24 June 2011 in "IP Policy: Does Hargreaves sayanything new?"

The DEA and Hargreaves represent different approaches to the problem of on-line piracy which Mr. Justice Arnold summarized at paragraph [23] of his judgment:
"A number of solutions to the problem of online copyright infringement have been proposed. In EMI v UPC at [34]-[49] Charleton J described and assessed three different potential technical solutions, including the CopySense system produced by Audible Magic referred to below. The Digital Economy Act 2010, and similar laws in other countries such as France's HADOPI (Haute Autorité pour la diffusion des œuvres et la protection des droits sur internet) law, represent another approach. In Digital Britain Professor Hargreaves listed at paragraph 8.24 eight different categories of measures for tackling digital piracy which rightholders had advocated to his Review, one of which was "working with ISPs as gatekeepers to the internet to ensure legitimate businesses do not suffer at the hands of illegal services". At paragraph 8.45 he concluded that "we need a combination of enforcement, education and a big push to expand the legitimate market for digital content."
Coincidentally, Dr. Vince Cable, the Secretary of State for Business Innovation and Skills is due to speak on HM government's policy on the implementation of the DEA and the Hargreaves report at the British Library today upon the publication of the government's response to Hargreaves. That will be the subject of yet another post from me in the next few days.

Mr. Justice Arnold acceded to the MPAA's request.

First, unlike Mr. Justice Kitchin in the passage from his judgment in the April hearing that I have quoted above, Mr. Justice Arnold believed that he had jurisdiction to make an order under s.97A. In response to the argument that there was no use of BT's service to infringe copyright, he said at paragraph [100]:
"The question here is whether, when a BT subscriber who is a member of Newzbin2 visits the Newzbin2 website, downloads an NZB file and then downloads an infringing copy of a film or a television programme, that subscriber is using BT's service to infringe copyright. BT contends that the subscriber is not using its service, but the service provided by Newzbin2. In my view this is a false dichotomy. It is common ground that the subscriber uses the Newzbin2 website to infringe, but it does not necessarily follow that the subscriber is not using BT's service to infringe. The subscriber may be using both services to infringe."
After considering BT's arguments he reviewed the case law from the Court of Justice of the European Union and the courts of other member states on the European legislation that s.97A of the CDPA is intended to implement. Relying particularly Case C324-09 L'Oreal SA and others v eBay International AG [2011] EUECJ C-324/09 which he referred to Luxembourg the judge concluded at paragraph [156]:
"Section 97A must be interpreted and applied consistently with the Court of Justice's guidance in L'Oréal v eBay. In my judgment the Court's reasoning demonstrates that the jurisdiction is not confined to the prevention of the continuation, or even repetition, of infringements of which the service provider has actual knowledge. On the contrary, an injunction may be granted requiring the service provider "to take measures which contribute to … preventing further infringements of that kind". Although such measures may consist of an order suspending the subscriber's account or an order for disclosure of the subscriber's identity, the Court of Justice makes it clear at [143] that these examples are not exhaustive, and that other kinds of measures may also be ordered."
The other ground upon which Mr. Justice Kitchin refused to make an order under s.97A was that the MPAA did not own the copyrights in all the matter that could be accessed through the Newzbin website. Without trying too hard I was able to find at least a few last year such as Eisenstein's Battleship Potemkin which are out of copyright. "Why should honest cinema buffs be denied the pleasure of those?" I argued. His lordship answered the point this way at paragraph [185]:
"In my judgment, subject to the points that remain to be considered, the Studios have established their entitlement to an injunction under section 97A. It appears from the evidence that the Studios form the biggest single group of rightholders interested in obtaining such relief. In any event, it is clear that the Studios' rights are being infringed on a massive scale. In those circumstances, I consider that they have a sufficient interest to justify the making of the order sought. It is true that the order sought will also benefit other rightholders, but I do not regard this as a reason for refusing the order. On the contrary, I consider that it supports the making of the order. So far as the groups of rightholders referred to in paragraph 4 above are concerned, they all support the application. It is immaterial that they have not formally joined in the application. So far as other rightholders are concerned, their rights under Article 1 of the First Protocol are also engaged and there is no reason to believe that they would not be equally supportive of the application."
The judge recognized at paragraph [186] that the order sought would potentially prevent BT subscribers from making use of Newzbin2 for non-infringing uses. On the evidence, however, the incidence of such uses is de minimis.

The Protocol to which the judge referred in the above extract was to the Convention on Human Rights. It was in answer to the argument that the order would sought would infringe the right to freedom of expression guaranteed under art 10. I derive a certain amount of personal satisfaction from that last sentence of paragraph [185] as I once argued unsuccessfully that the right to enjoyment of intellectual property was protected by Art 1 of the Protocol and had to be balanced against other Convention rights in the Manchester applications court before His Hon. Judge Haworth shortly after the Human Rights Act 1998 came into force.

The judge dealt very quickly with the remaining points on BT's liability to multiple claims, efficacy, proportionality and whether there should be a justice to the Court of Justice.

Ofcom has today published a redacted report on site blocking. The technology that BT will be required to operate to implement this order is known as "Cleanfeed". It is currently used to block pornography, terrorist and other criminal sites. Mr. Justice Arnold described it at paragraph [70] of his judgment. No doubt other ISPs across the land will be receiving letters from the MPAA's solicitors asking for the use of this or similar technology. Ofom has also reported on the costs of the various options.

Should any of those ISPs, their professional advisers or anyone else require amplification or clarification of this long and difficult judgment they should not hesitate to call me on 0800 862 0055 or use my contact form.

1 comment:

Anonymous said...

The position between s16(2) and s97A is difficult to reconcile. Does it mean that s16(2)(and presumably Amstrad) has fallen by the wayside due to the likely use of s97A against online intermediaries (particularly ISPs) in the future?