In Twentieth Century Fox Film Corporation & others v Newzbin Limited the High Court has found an online indexing service provider liable for copyright infringement.
The Claimants were all well known makers and distributors of films. Newzbin Limited operated the website Newzbin. Newzbin was a Usenet indexing site. Usenet is an online bulletin board on which users can post, view and download messages. Newzbin would locate and pull all of those messages together indexing them into various categories. This made it easier for users to find the types of messages they were looking for.
Newzbin located and categorized both text and binary messages. Binary messages comprised copies of films, TV programmes etc. Newzbin would locate these messages and pull them into the 'Movies' category or 'TV' category as the case may be. A user looking for a particular film would then only need to look in the 'Movies' category to find it rather than having to trawl through the many thousands of messages on Usenet.
The issue in this case was that some of the binary messages contained unlawful copies of the claimants' (C) films which users could download. The High Court was asked to decide whether the role played by Newzbin in making these films available to users amounted to copyright infringement by Newzbin.
The following features of the Newzbin service were relevant to the decision reached by the High Court:
- Newzbin provided a search facility which enabled users to locate copies of films easily;
- One film would be split between many hundreds of binary messages. Newzbin provided a one-click facility which located all of those messages for the user in one go allowing them to download an entire film. This saved many hours of user time locating all of the necessary messages. This was known as the 'NZB' facility;
- Newzbin used people as 'editors'. The editors would gather together binary material, badge it consistently and make it easier for users to download. They would also create reports which would, for example, include URL's to film review sites or similar. Some of these editors were paid. D gave instructions to editors on how to create these reports. The instructions included the following statements:
"While adding URLs is optional for non-new editors it's still good to include them and 'strongly encouraged' for movies. There is a list of helpful links elsewhere"; and
"You're benefiting the entire community a LOT more by making movie posts and decoding the cryptic filenames people come up with."
The judge found that these and other instructions "revealed an awareness by D [Newzbin] that users were primarily interested in films and constituted a positive encouragement and inducement to D's editors to focus on films in making their reports".
- The Newzbin site was primarily set up to categorise binary rather than text content. The judge found that it had "little utility in relation to text messages… and in this respect was a very rudimentary and crude system". Also, users could adjust their settings to view either text or binary content. The default setting was binary view. Further, a statement on the Newzbin site said:
"As mentioned in the brief description, Newzbin indexes the binary side of Usenet. We are a search engine – just like Google! …."; and
- Films could only be downloaded by 'premium members' of the Newzbin service. Premium members were required to pay a fee. Newzbin had 700,000 premium members.
The judge accepted the following evidence:
- That a significant proportion of the Newzbin database related to unlawful copies of commercially available films and other infringing material;
- That C's copyright had been infringed by Newzbin's premium members;
- That Newzbin was and had been aware for many years that the vast majority of films in the Movies category were commercial and so very likely protected by copyright and that members of Newzbin who used its NZB facility to download them were infringing that copyright;
- Expert evidence that Newzbin could have easily filtered binary content and so restricted access to unlawful copies of films and TV programmes;
- That Newzbin had been given written notice by C that Newzbin was being used by members to infringe C's copyright but had taken no action in response.
The terms and conditions on the Newzbin site provided:
"You may only use the Site for lawful purposes. In particular you may not use the Site to transmit defamatory, offensive or abusive material or material of an obscene or menacing character, or which promotes hatred, violence or illegal conduct, or in breach of copyright or any other intellectual property rights, or in breach of the Computer Misuse Act 1990 or other relevant legislation or the rights of another User."
The judge found that this warning was "entirely cosmetic" and was a "superficial attempt to conceal the purpose and intention of D to make available binary content of interest to its users, including infringing copies of films. As will be seen, the defendant has done nothing to enforce this restriction. To the contrary, it has encouraged its editors to report and has assisted its users to gain access to such infringing copies."
Newzbin provided a "delisting" facility. In order to get an item delisted, members had to follow a link which took them to a web page which instructed them that details of the item sought to be removed must be sent by registered post to a specified address. The judge was satisfied that this "cumbersome procedure" was "entirely cosmetic and designed to render it impractical for rights holders to secure the removal of entries relating to infringing material from the Newzbin indices".
At the end of 2009, Newzbin had a turnover of £1m and a profit of £360,000.
C commenced proceedings against Newzbin alleging that Newzbin had infringed its copyright directly or through its editors by:
- authorising acts of infringement by its members;
- procuring, encouraging and entering into a common design with its members to infringe;
- communicating C's works to the public, namely Newzbin's members.
C also argued that Newzbin was a service provider with actual knowledge of other persons using its service to infringe copyright and sought an injunction under section 97A of the Copyright, Designs and Patents Act 1988 ("the Act").
Section 97A provides:
(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 –
(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 2001/2013); 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."
C was unable to point to specific acts of infringement as Newzbin did not keep records of who used its NZB facility.
Newzbin argued that it was simply a search engine like Google and was "content agnostic".
Mr Justice Kitchin in the High Court held:
- Authorisation - section 16 of the Act confers upon the owner of copyright in a film the exclusive right to copy the film and provides that copyright in the film is infringed by a person who, without the consent of the copyright owner, authorises another to do this. It was clear from CBS v Amstrad that "authorise" in this context meant the grant or purported grant of the right to copy. It was something more than mere enablement, assistance or encouragement to do the copying. In light of the various features of the Newzbin service including the editor's reports, the search facility, the lack of a filter for binary content and the "window dressing" contractual restrictions on copying and the NZB facility (which provides the means for infringement), a premium member would deduce that Newzbin purported to possess the authority to grant any required permission to copy any film that the member may choose from the Movies category and that Newzbin had sanctioned and approved the copying of the films. Newzbin had, therefore, authorised the copying of C's films.
- Procurement and participation in a common design – In light of all of the features of the Newzbin service, Newzbin had so involved itself in the copyright infringement as to make the infringement its own. Newzbin had procured and engaged in a common design with its premium members to infringe C's copyright.
- Communication to the public - taking into account all of the features of the Newzbin service, the fact that the service was "not remotely passive" and that Newzbin had intervened in a "highly material way" to make C's films available to its premium members, Newzbin's members would consider that Newzbin was making available to them the films in the Newzbin index. Newzbin had communicated these films to the public.
- The judge agreed to grant an injunction under section 97A to restrain Newzbin from infringing C's copyright in relation to their repertoire of films.
ISPs, indexing services and other online service providers may take some comfort from this judgment. The decision is highly fact sensitive and suggests that they will only be on the hook for copyright infringement if they do not put in place some fairly basic safeguards (such as an effective notice and take down procedure) and set up their systems in such a way that they are, in effect, sanctioning the infringements.
Click here to read the judgment