Son of NewzBin: another victory for the film-makers

STOP PRESS: the full judgment -- 67 pages and 204 paragraphs -- can be read here, till it's available on BAILII.  11.23am: it's now available on BAILII here.

In a week that has been absolutely heaving with copyright rulings from the British courts, the IPKat now brings you NewsBin 2, courtesy of Mr Justice Arnold of the Chancery Division, England and Wales. If you remember NewzBin I, just scroll down to the heading NewzBin 2 below.

Background and NewzBin 1

Usenet is a "worldwide distributed internet discussion system". In NewsBin 1 (Twentieth Century Fox Film Corporation and others v Newzbin Ltd [2010] EWHC 608 (Ch)) Fox, together with other film makers and distributors, sued NewzBin, "a British Usenet indexing website notable for its introduction of new technologies and search techniques that aid users by facilitating access to content on Usenet" (per Wikipedia), for copyright infringement.  According to the claimants, NewzBin was focused on piracy in that it located and categorised unlawful copies of films and then (i) displayed the titles of these copies in its indices, (ii) provided a facility for its users to search for particular unlawful copies, (iii) displayed their search results and (iv) provided a simple one-click mechanism for users to acquire the unlawful copies of their choice.

 The defendant company, which owned and ran NewzBin, said its website was simply a search engine like Google -- but that it was directed to Usenet rather than to the worldwide web. It also said it was "content agnostic", being designed to index the entire content of Usenet. Where possible, it provided hyperlinks so that any supply of unlawful material was an act occurring exclusively between the hyperlink user and the relevant Usenet server operators -- but that it played no part in any such activity.

Following a review of both the technology and the relevant law, Mr Justice Kitchin concluded on the evidence that NewzBin clearly knew that its facility was used mainly by its members for the unauthorised downloading of infringing copies of the claimants' films. He then turned to Fox's action, which was based on the following:

(i) authorising acts of infringement by NewzBin's members;
(ii) procuring, encouraging and entering into a common design with its members to infringe;
(iii) communicating the claimants' copyright works to the public, namely the defendant's members;
(iv) categorisation of NewzBin as a service provider with actual knowledge of other persons using its service to infringe copyright, in respect of which the claimants seek an injunction under section 97A of the Copyright, Designs and Patents Act 1988.

As to "authorisation", Kitchin J reviewed and analysed the law relating to that word as it affected copyright infringement, with particular regard to the narrow, literal interpretation placed upon it by the House of Lords in C.B.S. Songs Ltd and others v Amstrad Consumer Electronics Plc [1988] 1 A.C. 1013, when the sale of tape-to-tape recording machines was not regarded as "authorising" infringement of the music copied by them since the company that made and sold the machines had not acted as though it had an entitlement to permit infringing acts by those machines' users. At paragraph 90 he summarised the position:

"... "authorise" means the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement. The grant or purported grant to do the relevant act may be express or implied from all the relevant circumstances. In a case which involves an allegation of authorisation by supply, these circumstances may include the nature of the relationship between the alleged authoriser and the primary infringer, whether the equipment or other material supplied constitutes the means used to infringe, whether it is inevitable it will be used to infringe, the degree of control which the supplier retains and whether he has taken any steps to prevent infringement. These are matters to be taken into account and may or may not be determinative depending upon all the other circumstances".

Applying this to the facts, he held NewzBin liable:

" ... I am entirely satisfied that a reasonable member would deduce from the defendant's activities that it purports to possess the authority to grant any required permission to copy any film that a member may choose from the Movies category on Newzbin and that the defendant has sanctioned, approved and countenanced the copying of the claimants' films ...".

As for "procuring, encouraging and entering into a common design" to infringe, the judge drew again on C.B.S. v Amstrad and the stiff test which had to be satisfied if liability were to be found:

"... mere (or even knowing) assistance or facilitation of the primary infringement is not enough. The joint tortfeasor must have so involved himself in the tort as to make it his own. This will be the case if he has induced, incited or persuaded the primary infringer to engage in the infringing act or if there is a common design or concerted action or agreement on a common action to secure the doing of the infringing act" (para.108).

Even so, there was ample evidence from which to conclude that NewzBin had so involved itself.

As to whether NewzBin had communicated the claimants' films to the public, Kitchin J found guidance in a European Court of Justice ruling in rather a different context, Case C-306/05 Sociedad General de Autores v Editores de España (SGAE) v Rafael Hoteles SA. In that preliminary ruling on a reference from Spain, the Court had said:

"46 While the mere provision of physical facilities, usually involving, besides the hotel, companies specialising in the sale or hire of television sets, does not constitute, as such, a communication within the meaning of Directive 2001/29, the installation of such facilities may nevertheless make public access to broadcast works technically possible. Therefore, if, by means of television sets thus installed, the hotel distributes the signal to customers staying in its rooms, then communication to the public takes place, irrespective of the technique used to transmit the signal".

On this basis, since NewzBin's premium members indeed downloaded the claimants' films from a place and at a time individually chosen by them, and since its members considere NewzBin to be making the films available to them, liability was established. An enquiry into damages, including additional damages for flagrant infringement was ordered. Injunctive relief would however be less dramatic:

"In my judgment the scope of any injunction under section 97A(2) 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" (para. 135).

NewsBin 2

Following a two-day hearing late last month, the Motion Picture Association succeeded in an action which it brought against a major internet service provider, BT to invoke Section 97A of the Copyright, Designs and Patents Act 1988 so as to require BT to take direct action to block the website NewzBin2 (which, since June 2010, was in effect the resurrected version of NewzBin, using the same code and database as its  predecessor but this time being hosted offshore from the Seychelles).  A fairly joyous joint media release from what seems like a representative selection of the top faces in the rights-owners' camp, reports as follows:

"Arnold J. ... ruled that the Motion Picture Association (MPA), supported by the creative industries, has won an order requiring BT to block access to the pirate website Newzbin2. The site makes unlawful copies of films and television programmes, alongside other content from games, publishers and music available without permission in direct violation of a previous court order against it.

Around 700,000 members use the Newzbin service generating the operators in excess of £1 million per year. This verdict will prevent the site from using BT’s internet service to make money through copyright infringement. 

In his ruling, [Mr, unless there's another media statement on the way, announcing his elevation to the Supreme Court] Justice Arnold stated: 

“In my judgment [not yet circulated at the tine this blogpost was posted] it follows that BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes, it knows that the users of Newzbin2 include BT subscribers, and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2.”

This significant judgment reflects a clear recognition that, under the existing law, Courts can issue orders to prevent illegal activity online. It rejects BT arguments that they have no responsibility to act against copyright theft and states that the order is proportionate. 

This comprehensive and unequivocal judgment sets a clear legal precedent which will enable content creators and distributors to secure greater cooperation from ISPs to address content theft on the internet and in particular to deal with websites that are focused on wholesale copyright theft".

On proportionality of the remedy, a PDF attached to the media release adds this quote from Arnold J:

"…I am satisfied that the order sought by the Studios is a proportionate one. It is necessary and appropriate to protect the Article 1 First Protocol rights of the Studios and other copyright owners. Those interests clearly outweigh the Article 10 [presumably freedom of expression under the European Convention on Human Rights] rights of the users of Newzbin2, and even more clearly outweigh the Article 10 rights of the operators of Newzbin2. They also outweigh BT’s own Article 10 rights to the extent that they are engaged. The order is a narrow and targeted one, and it contains safeguards in the event of any change of circumstances. The cost of implementation to BT would be modest and proportionate.” [draft Judgment para 200]".

This was intended as a test case, as the court clearly stated, and other ISPs now have a clear idea what is expected of them:

"“The Studios have made it clear that this is a test case: if they are successful in obtaining an order against BT, then they intend to seek similar orders against all the other significant ISPs in the UK. The other ISPs were invited to intervene in the present application if they so wished, but have not done so [was this a strategic decision, wonders Merpel, to keep their powder dry and decide how to respond without being weighed down by the baggage of being parties in these proceedings?]".

The full text of the judgment is keenly awaited. Meanwhile, BT's defences and what happened to them are neatly summarised in the PDF mentioned above. Given the complexity of the issues, as well as the identity of the judge, the smart money is on the judgment being a long one ...