Facts

The applicants, six well-known producers and distributors of films (Twentieth Century Fox Film Corporation, Universal City Studios Productions LLP, Warner Bros. Entertainment Inc., Paramount Pictures Corporation, Disney Enterprises, Inc. and Columbia Pictures Industries, Inc.), sought an order against British Telecommunications plc (BT) requiring it to block access to the Newzbin 2 website.

The Newzbin 2 case follows the Newzbin case2 in March of this year. This involved a claim by the same applicants against Newzbin Ltd. The Newzbin website allowed subscribers to search for and download illegal copies of films and television programmes from links posted on the Usenet bulletin boards. The judge upheld the applicants’ claims for infringement and granted an injunction against Newzbin Ltd restraining infringement of the copyrights in the applicants’ repertoire now and in the future. The application for an injunction pursuant to section 97A of the Copyright, Designs and Patents Act 1988 (the CDPA) was rejected.

Newzbin Ltd subsequently went into liquidation and the Newzbin website ceased to operate. Shortly afterwards, an almost identical website appeared named Newzbin 2. The Newzbin 2 website was operated by unknown individuals, unlike the first incarnation, and the servers used to host the website were located in Sweden. This made it very difficult for the applicants to start proceedings against the operators of the website. The applicants therefore sought an order against BT, the largest internet service provider in the UK.

Decision

In resisting the application, BT put forward five reasons why the court had no jurisdiction to make such an order. These reasons are summarised below:

  1. There was no use of BT’s service to infringe copyright

While it was accepted by BT that it is a service provider for the purposes of the legislation, BT contended that when one of its customers downloaded an infringing copy of a film or television programme, the user was not using BT’s service but that provided by Newzbin 2. Similarly, the operator of the Newzbin 2 website did not use BT’s service to infringe copyright. The judge was of the opinion that this was a “false dichotomy”. He dismissed BT’s submission on the basis that when a subscriber uses the Newzbin 2 website to infringe, both services are being used to infringe.

  1. BT has no actual knowledge that its service is being used for infringement.

One of the key pieces of legislation referred to in the judgment is Article 8(3) of the Information Society Directive. This provides that copyright holders are in a position to apply for an injunction against intermediaries whose services are used by third parties to infringe a copyright. One of the ways the UK has implemented Article 8(3) is through the inclusion of Section 97A in the CDPA. Section 97A provides that a court can grant an injunction against a service provider if that provider had “actual knowledge” of another person using their service to infringe.

BT submitted that Section 97A required actual knowledge of a particular infringement by a user. The judge dismissed this narrow interpretation of Section 97A. He pointed out that BT knew the users of Newzbin 2 (i) were infringing copyrights on a large scale; (ii) included BT subscribers; and (iii) used its service to acquire unlawful copies of films from Newzbin 2. He concluded that it naturally followed that BT had actual knowledge, as it knew that one or more persons were using its service to infringe a copyright.

Importantly, it was common ground between the parties that a detailed and specific notice from an aggrieved party complaining of copyright infringement would be sufficient to establish actual knowledge of that infringement.

  1. An order would be contrary to Article 12(1) of the E-Commerce Directive.

Article 12(1) of the E-Commerce Directive exempts the liability of service providers where they act as a “mere conduit” in copyright infringements. Article 12(3) of the E-Commerce Directive provides that the protection afforded by Article 12(1) does not prevent a court from making an order requiring service providers to “terminate or prevent an infringement”. BT argued that the order sought by the applicants was designed to disable access to information, which was a measure that was outside the ambit of Article 12(3). The judge rejected this argument saying that Article 12(3) placed no limit on the type of injunctions that can be granted and can extend to orders requiring service providers to disable access to illegal information.

  1. An order would be contrary to Article 15(1) of the E-Commerce Directive.

Article 15(1) prevents member states from imposing a general obligation on service providers to monitor the information that they transmit. BT argued that the order sought by the applicants would impose an obligation to actively monitor. The judge dismissed this on the basis that the order would not require BT to engage in active monitoring, but would require it to simply block access to the Newzbin 2 website by automated means that do not involve a detailed inspection of the data transmitted. This was sufficiently specific to fall outside the protection offered by Article 15(1).

  1. An order would be contrary to Article 10 of the European Convention on Human Rights in that it was not “prescribed by law”.

The judge found that the order he was asked to grant was within the range he was entitled to grant under section 97A of the CDPA and Article 8(3) of the Information Society Directive. It was therefore “prescribed by law” within Article 10(2) of the Convention. In support for this conclusion, the judge considered the order sought to be clear and precise. Also, BT merely had to implement an existing technical solution that it already employs in its operations, the cost of which is not excessive. The measures to be taken by BT were therefore not onerous.

In addition to the arguments as to jurisdiction, BT asked the court to decline to make the order in the exercise of its discretion on three main grounds:

Firstly, the applicants did not have an interest in all of the material on the Newzbin 2 website. The judge was of the opinion that it was inconsequential that the applicants only had an interest in about 70 percent of the material on the Newzbin 2 website. He reasoned that the applicants formed the biggest single group of rights holders whose rights were being infringed on a massive scale. This amounted to sufficient interest to justify the grant of the order.

Secondly, BT argued that the order should not be made because it would open the floodgates to more applications. The judge said that other rights holders would not take the decision to make an application lightly, given the costs and effort involved, and would do so only in respect of the worst infringers.

Thirdly, the order provided that BT was to use the software it had developed to block access to websites containing images of child abuse to block access to the Newzbin 2 website. BT submitted, relying on expert evidence, that users of Newzbin 2 would be able to circumvent the software. The order was therefore likely to be ineffective. The judge rejected this argument primarily on the basis that the need to circumvent the software was likely to discourage most users from accessing the Newzbin 2 website.

The judge having rejected BT’s submissions granted the order in substantially the form requested by the applicants. The order is to take effect this month.

Significance of Outcome

The Newzbin 2 case is very important as it provides an alternative means for rights holders to protect their content where they have little or no ability to take action against the infringing culprits. It is understood that this is the first time such an order has been made by the English courts, so it sets a very useful precedent for rights holders to stop large-scale infringers.

However, it is possible that it will be necessary to start proceedings in order to block infringing websites. BT indicated in correspondence prior to the application being made to the High Court that it would only block access to the Newzbin 2 website upon receipt of an order from the court requiring it to do so. It may be that following this decision it will be sufficient to simply write to BT to request that an offending website be blocked. However, it is likely that BT would only be prepared to take such action where the facts are similar to those in the Newzbin 2 case.

It also remains to be seen in practice how effective BT’s measures are in stopping the operators of the Newzbin 2 website, especially given BT’s submission that it would be possible to circumvent its software and that the people behind Newzbin 2 have already indicated that they will try everything possible to keep going.

The judgment is particularly significant given the Government announced, in part because of the Newzbin 2 case, to drop the proposed power to block websites from the Digital Economy Act. This would have let rights holders force internet service providers to block access to online services that facilitate copyright infringement.