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Retrospective: The Supreme Court of England: first injunction against service provider

The six well-know studios (Twentieth Century Fox Film Corporation, Universal City Studios Productions LLLP, Warner Bros. Entertainment INC., Paramount Pictures Corporation, Disney Enterprises, INC., Columbia Pictures Industries, INC.) sued Newzbin Limited for infringement of copyright arising from the operation of a website called Newzbin on a world wide internet discussion system called Usenet.

The studios said Newzbin is focused on piracy in that it locates and categorises unlawful copies of films and displays the titles of these copies in its indices; provides a facility for its users to search for particular unlawful copies and displays the results; and provides a simple one-click mechanism whereby users can acquire unlawful copies of their choice.

The defendant contended that its website is simply a search engine like Google but directed to Usenet rather than the world wide web. It also said it is “content agnostic” and designed to index the entire content of Usenet. Where possible, it provides hyperlinks with the result that any supply of unlawful material is an act occurring exclusively between the hyperlink user and the relevant Usenet server operators and that the defendant played no part in any such activity.

The defendant asserted it had no knowledge of infringing material being made available through the Newzbin website, that it would remove information relating to infringing material if it knew about it, and that it would remove any editor responsible for posting data relating to infringing material and any member using Newzbin for the purpose of accessing such material. The defendant has also been given notice by the claimants that Newzbin has been and is being used by members to infringe the claimants’ copyrights in their films and no action has been taken against the editors responsible for making the reports relating to them or against the members who have downloaded the infringing copies.

Justice decided that the defendant is and has been aware for very many years that the vast majority of films in the Movies category of Newzbin are commercial and so very likely to be protected by copyright, and that members of Newzbin who use its NZB facility to download those materials, including the claimants’ films, are infringing that copyright. The defendant is liable to the claimants for infringement of their copyrights because it has authorised the copying of the claimants’ films; has procured and engaged with its premium members in a common design to copy the claimants’ films; and has communicated the claimants’ films to the public.

The claimants contended that the defendant is a relevant service provider and that it has actual knowledge that its premium members are infringing the claimants’ copyrights and, indeed, the copyrights of other rights holders in the content made available on Newzbin. Accordingly they invited the justice to grant an injunction to restrain the defendant from including in its indices or databases entries identifying any material posted to or distributed through any Usenet group in infringement of copyright. The defendant accepted that it is a relevant service provider but disputed that it has actual knowledge of any person using its service to infringe because it has never been served with a notice of the kind referred to in section 97A(2).

The justice did not grant an injunction of the breadth sought by the claimants for a number of reasons. First, the claimants sought an injunction to restrain activities in relation to all binary and all text materials in respect of which they own no rights. Second, justice did not accept that the defendant has actual knowledge of other persons using its service to infringe all such rights. Third, the rights of all other rights holders were wholly undefined and consequently the scope of the injunction would be very uncertain.

The studios made application for injunction against British Telecommunications Plc, the largest internet service provider in the United Kingdom, pursuant to section 97A of the Copyright, Designs and Patents Act 1988 (“CDPA 1988” ). 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 informed of the present application in case they wished to intervene, but have not done so. Application was supported by the organisations representing other groups of rights holders: BPI (British Recorded Music Industry) Ltd, International Federation of the Phonographic Industry, the Association for UK Interactive Entertainment, the Publishers’ Association, which represents the interests of UK book publishers.

It was the first occasion on which an effective application for a section 97A order against an ISP has been made.

BT accepted that it is a “service provider” within the meaning of section 97A of the CDPA 1988, but contended that the court has no jurisdiction to make the order sought by the Studios.

BT has the largest number of internet subscribers in the UK of any ISP, over 5.3 million. Its retail market share of the digital subscriber line (DSL) and local loop unbundling (LLU) markets is around 35%. BT’s retail customers may use BT’s broadband service to access the internet and access particular websites. In so far as BT’s customers communicate with third party websites, they will send and receive data over the internet. BT facilitates this communication through its service. BT neither initiates that communication nor receives the actual content of the data packet in a permanent form. In so far as BT’s servers and routers receive a data packet and send it on, that equipment will hold transient copies of the data packet for a very short period of time. Those packets are neither stored nor cached by BT. It is the customer (or other user) who decides which internet websites to access and what data to send and receive over the internet. BT has no knowledge of the content of any particular communication. It does not monitor those communications.

Even when a BT subscriber accesses a copyright work using Newzbin, BT never holds in one place all of the data packets of any communications with Newzbin’s or third party websites which would amount to a media file that contains that material. The end user is only able to re-assemble all the relevant data on his or her personal computer, and it is at that point that the media file will be capable of being “played.” BT does not provide any services to the operators of the Newzbin website, and in particular it does not “host” the website.

The legal context for the application consists primarily of (a) domestic and European human rights legislation and (b) three European Union directives relevant to copyright enforcement and the domestic implementing legislation.

The justice decided that there is jurisdiction to grant an injunction against BT pursuant to section 97A and that the scope of that jurisdiction is sufficient to enable justice to make the order sought by the Studios.