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Update on Copyright Case Law

Dawn Osborne – Partner, Palmer Biggs Legal & Chair of FLAG

UK copyright case law has finally come into the twenty first century with the decision of Mr Justice Kitchin in Twentieth Century Fox Film Corporation & others v Newzbin Limited. We finally have a significant decision subsequent to Amstrad on authorisation and joint infringement of copyright infringement in the context of information services.

Newzbin provide indexing services for messages posted on UseNet services (which provide the equivalent of electronic bulletin boards). The messages can carry text but also other types of files including films, software and music. Indexing services are necessary particularly for large files which are split up to enable distribution, UseNet only being designed to distribute files of small size. The indexing, categorisation and file checking and sourcing services of Newzbin allowed users to locate, reconstitute and download files containing such large content which would be practically impossible otherwise.  Newzbin claimed that they were content neutral and did not know about the content indexed, saying the majority of the content was legitimate. The judge found that as a matter of fact this was not the case. The Judge had no hesitation in finding Newzbin liable for copyright infringement.

As a matter of fact the Judge found that distribution of large files such as films was far more developed in Newzbin’s system than distribution of text and most of the content was likely to be unauthorised. Certain subcategories in Newzbin’s indexing systems divided material by reference to the source of the pirated material, e.g. CAM meant filmed in a cinema. Several newsgroups were set up to cover “warez” a slang term for pirated copies. Newzbin’s editors were encouraged to focus on films and no action had been taken against editors indexing and reporting unauthorised copies. Whilst Newzbin had appropriate terms and conditions prohibiting use of its systems for locating unauthorised films and its staff guidance prohibited the reporting of unauthorised material the Judge found that this was cosmetic and that, in fact, Newzbin encouraged such activities. With regard to knowledge the Judge found that the directors had assisted users in forums with advice on how to use their system even when it was obvious that the user intended to use the system for copyright infringement and that the directors knew that the vast majority of content involved infringement of commercial content. It was found that Newzbin could have implemented a filtering service to exclude infringing content but had not done so.

The Judge found that Newzbin had committed copyright infringement by authorising infringement, that it was jointly liable being involved in a common design with its users to infringe and it was an infringer by the direct means of making available by communication to the public.

Authorisation   

On authorisation, the Judge found that the facility which collected all the messages containing a copyright work and allowed the work to be reconstituted and downloaded providing the means of infringement, was created by Newzbin and was in its control. Newzbin did not introduce filtering when it could have done so. Despite its terms and conditions prohibiting infringement its editors and members were, in practice, encouraged to infringe. As a result the judge was satisfied that Newzbin purported to grant permission to copy and sanctioned, approved and countenanced copying, including specifically the films alleged to be infringed in these proceedings.

Jointly liable by means of a common design

On common design, although specific acts of infringement which Newzbin had procured could not be identified the Judge held that this was only because Newzbin had not kept any records. In view of the knowledge of what was being made available and the operating of a site designed to make available infringing copies of films, the promotion of such infringement, the provision of means to infringe, the encouragement of editors to report on infringing copies, the giving of advice and assistance to infringe and the profiting from the infringement, the Judge found that Defendant had procured infringement and engaged in a common design to infringe and was jointly liable.

Communication to the public

The Judge disagreed with Newzbin that it was merely an intermediary providing links to material and so was merely passive, Newzbin had intervened in a highly material way to make the films available providing a sophisticated system to allow users to access films of their choice at the touch of a button. Knowing exactly what it was doing it had communicated the films to the public.

Damages

The Judge left the decision on whether there should be additional damages due to flagrancy of the infringement to the damages enquiry.

Injunction

An injunction was granted to prevent the Defendant infringing the Claimants’ copyright works in the usual way. The Claimants also requested an injunction under s97A against the Defendant as a service provider. The Defendant admitted it was a service provider but said that the section did not apply as it had not been served with any notices. The judge said such a notice was not necessary, but was just one factor to take into account in whether to grant an injunction under this section, but he refused to make a general injunction under the section as requested by the Claimants prohibiting the distribution of all or any copyright material no matter by whom it was owned. The Judge held that any injunction under s97A would not be any wider than the injunction he had already concluded he should award, i.e. no wider than one preventing the Defendant infringing the Claimants’ works.      

Comments

This is a huge step for UK law in this area. Parallels can be drawn with the Grokster judgement in the US. The UK is now an attractive jurisdiction for cases of this kind. Claimants can now be reassured that Amstrad is not a complete umbrella for intermediaries claiming that their facilities can also be used legitimately. Where infringement is being encouraged liability can now be attached.   Interestingly one of the films involved was “Atonement”. Dictionary definition of Atonement being “satisfaction or reparation for a wrong or injury; Amends”, Finally a step towards the interests of copyright owners against those making a profit from distribution of unauthorised copies. How appropriate.