In a test case, the movie industry has succeeded in persuading the English High Court to issue an injunction against BT to help stop unauthorised movie downloads from the Newzbin 2 website. The case shows what level of knowledge is needed by an ISP to be on the receiving end of this kind of injunction and the scope of the injunction which the court can order. This is thought to be the first time that an injunction of this kind has been granted against an ISP.

Facts

In 2010, various film studios, such as 20th Century Fox and Universal, successfully took action against the original Newzbin site (the Newzbin 1 case – Twentieth Century Fox v Newzbin [2010] EWHC 608 (Ch)). Newzbin allowed and indeed made it easy for users to download infringing copies of films. After the first case, the original site closed down, the company went into liquidation, its operations moved off-shore (it seems to the Seychelles) and those behind it hid their identities, adopting “Reservoir Dogs” style nicknames such as “Mr White” and “Mr Pink” and calling themselves “digital highwaymen”. Faced with this, the film studios brought a case against BT, one of the ISPs through which users gained access to the Newzbin 2 site. They made it clear that if they won against BT, they would seek similar injunctions against the other significant ISPs in the UK.

Legal background

The film studios relied on a specific section in UK copyright legislation – section 97A of the Copyright, Designs and Patents Act 1988. This section deals not with whether an ISP has to pay damages for copyright infringement, but rather with where the court can grant an injunction against the service provider.

According to section 97A, it can do so where that service provider has “actual knowledge of another person using the service to infringe copyright”. It goes on to say that, in determining whether a service provider has actual knowledge, the court should take into account everything that might be relevant, including whether the ISP has received a notice under the “notice and take-down” procedure under the E-Commerce Directive (a piece of EU legislation which harmonises the situations in which ISPs are or are not liable for infringements of IP rights by those using their services - Directive 2000/31/EC of 8 June 2000). The legal background is discussed in more detail below.

In Newzbin 1, the judge had granted an injunction against the operators of the site infringing copyright in films and TV programmes in a list drawn up by the film studios, which they could update later, and had ordered Newzbin 1 to ensure that its users could not use the site to infringe copyright in those films and programmes. He had not however granted an injunction specifically under section 97A.

The issues

The two key issues in this judgment are as follows.

  1. Did BT have “actual knowledge” as required by section 97A? It had been put on notice that Newzbin 2’s operators and users were infringing copyright in films on a massive scale, but it did not have knowledge that specific people had downloaded infringing copies of specific movies.
  2. Would the court grant an injunction not just against access to specific infringing film content on the Newzbin 2 site, but against access to the site as a whole (about 70% of which was made up of pirate film content) and even against future film repertoire?

Recent and pending cases

This case was heard amid a plethora of other cases against ISPs in different parts of the EU.

The court noted that there was no uniform approach between the different EU Member States. In similar cases, some courts had required ISPs to block access (for example, an Italian court had required access to Pirate Bay to be blocked), but others had not. For example, EMI and other record majors had sought a similar injunction in Ireland (EMI Records (Ireland) Limited and Others v. UPC Communications Ireland Limited [2010] IEHC 377, 11 October 2010). In that case, the Irish court had refused to grant an injunction.  

The outcome in Newzbin 2 had been held back to await the decision of the European Court of Justice (“ECJ”) in L’Oréal v. eBay (case C-324/09), in which the ECJ commented on the scope of the injunction which could properly be imposed on eBay to prevent its users selling counterfeit L’Oréal products.

A further case is still pending before the ECJ, relating to unauthorised music downloads. (Scarlet v. SABAM, case C-70/10.) In the Scarlet case, the Advocate General’s opinion was given in April 2011 and he considered that a general, unlimited obligation on an ISP such as Scarlet (formerly Tiscali) to block transmissions from any Scarlet subscriber to any other web user should not be granted. The ECJ’s decision in that case is still awaited, so we do not yet know whether it will agree with this stance. In Newzbin 2, the judge said that the Scarlet case was distinguishable, since the film studios were not asking for an unlimited filtering system for all customers, but rather for a clear and precise injunction requiring BT to implement an existing technical solution which BT itself had accepted would be technically feasible. So the scope of the injunction sought and the technical feasibility of achieving it will be relevant in each case.

Technical aspects

The judgment looks at three methods of attempting to block access to websites which BT and others can use. BT had launched a system called Cleanfeed in 2004 with the aim of disrupting access by subscribers to URLs named on a list held by the IWF – the Internet Watch Foundation, which operates a hotline specifically aimed at child pornography and other criminally obscene adult content. Cleanfeed uses a hybrid system of blocking internet protocol addresses and deep packet inspection URL blocking. Other ISPs had adopted similar systems.

EU legislation

The judge looked in particular at the E-Commerce Directive and at the Information Society Directive (2001/29/EC of 22 May 2001). Section 97A is based on a provision in the Information Society Directive.

The E-Commerce Directive provides that ISPs are not liable for information transmitted over their networks if they are “mere conduits” i.e. if they do not initiate the transmission, do not select who receives it and do not select or modify the information contained in it. However, this “safe harbour” from liability does not affect the ability of national courts to require service providers to terminate or prevent an infringement.

In addition, ISPs are not liable for caching information as long as they act “expeditiously to remove or disable access” to stored information “upon obtaining actual knowledge” of the fact that the information has been removed from the network or access to it has been disabled, or that a court has ordered such removal or disablement. Again, this does not affect a national court’s ability to require the service provider to terminate or prevent an infringement. A similar provision relates to hosting.

Finally, the E-Commerce Directive provides that EU Member States must not impose “a general obligation” on ISPs “to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity”.

The Information Society Directive harmonised aspects of copyright law within the EU. Its provisions stress the importance of protecting copyright and it notes that in a digital environment, “in many cases, [intermediaries] are best placed to bring infringing activities to an end” so that owners of IP rights should be able to apply for injunctions against an intermediary “who carries a third party’s infringement of a protected work or other subject-matter in a network”. As we shall see, the word “carries” was important in the Newzbin 2 case.

BT’s level of knowledge

BT disputed that it had “actual knowledge” as required by section 97A. It said that, for an injunction to be granted against it, the relevant level of knowledge was that its services were being used to commit a particular infringement of a particular copyright work, by a particular identified or identifiable individual. The film studios relied on the E-Commerce and Information Society Directives which require sanctions to be “effective, proportionate and dissuasive”. The judge considered that the requirement for “actual knowledge” was likely to have been “transplanted” from the E-Commerce Directive and noted that it was much more general and open-ended than the previous UK copyright legislation. Whilst some aspects of section 97A suggested that the rights-holder should have to provide details of a specific infringement, they did not make it mandatory to provide those details, but made the extent to which the ISP had received a notice containing those details one relevant factor amongst others.

In the end, it was the “context, purpose and wording” of section 97A which were considered to be decisive. The requirements of actual knowledge should not be interpreted too restrictively, since section 97A did not determine whether or not an ISP had protection against liability in damages for infringement, but merely whether it would have to be on the receiving end of an injunction. It was relevant that the Information Society Directive talked about an injunction against an intermediary who “carries” a third party’s infringement; this again suggested that actual knowledge should not be interpreted too restrictively. Looking at the wording of section 97A, the focus was on knowledge of “the use of the service” to infringe, rather than on knowledge of the infringements themselves. One can know that someone is infringing copyright without knowing who that person is or even being able to find out who that person is, the judge said.

So what must be shown “is that the service provider has actual knowledge of one or more persons using its service to infringe copyright”, and “the more information the service provider has about the infringing activity, the more likely it is that the service provider will have actual knowledge”. However, “it is not essential to prove actual knowledge to a specific infringement of a specific copyright work by a specific individual.” (Paragraph 148 of the judgment).

Here, BT did have “actual knowledge” that people were using its service to infringe copyright, and that was enough.

What is the scope of the injunction that may be granted?

In L’Oréal v. eBay, the ECJ held that courts can order injunctions in these circumstances not just to bring existing infringements to an end but also to prevent further infringements. In this way, they can be “effective and dissuasive” as required by the relevant directives. Whilst the E-Commerce Directive says that ISPs cannot be required to actively monitor all data going across their networks, they can be required by an injunction to suspend perpetrators of infringements, to prevent further infringements of the same kind. The judge in Newzbin 2 therefore found that section 97A gave the court a specific and broad power to grant injunctions against ISPs, which were not limited to injunctions prohibiting specific infringements of which the service provider had actual knowledge, following the guidance given in L’Oréal v. eBay.

The injunction which the film studios were seeking did not fall foul of the provision in the E-Commerce Directive which says that ISPs must not be required to take on a general obligation to monitor information which they transmit. Blocking access is not the same as general or active monitoring, the court held.

The fact that not all of the Newzbin 2 site was devoted to movie content did not prevent an injunction being granted against access to the site. Owners of rights in other content had supported the film studios’ application to court. Moreover, in other IP cases, it was common for rights-owners to have injunctions across the entirety of their repertoire even though they could only prove infringements of a small number of copyrights. The film studios had put forward evidence that third party rights were being infringed and, from a Human Rights Act point of view, the court was not just entitled but obliged to take account of this.

BT’s claim that ordering an injunction in this kind of case would open the floodgates to those demanding that it block access to websites alleged to contain all sorts of unlawful material was given short shrift. The difficulties in bring this particular case (all the time and effort that had gone into the Newzbin 1 case for example) would mean that rights-holders would in practice concentrate on seeking injunctions against the more blatant infringers, and BT had not proved that multiple orders would put undue strain on its network. The operators of Newzbin 2 were already trying to help their users get around blocking, but the court considered that injunction would at least have some effect – for example, in respect of users who did not have the technical expertise or want to spend the money on circumventing the blocking measures.

Comment

This is a significant step in the ongoing battle against digital piracy and shows a pragmatic approach by the English courts. Rights-owners will be breathing a sigh of relief, although this does not mean that injunctions will be granted against ISPs as a matter of course. BT’s possession of usable blocking technology, the fact that almost all use by the Newzbin site was infringing and the support provided by other rights-owners were all relevant. Different factors apply to defamation and privacy cases. Last but not least, the question of who picks up the legal costs will not be dealt with until a further hearing in October 2011.