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Hollywood Studios Successfully Obtains Injunction Against UK Internet Service Provider Over Piracy Website

Thursday, August 4, 2011
Manyee Chow | Bloomberg LawTwentieth Century Fox Film Corporation and others v. British Communications PLC [2011] EWHC 1981 (Ch) (England and Wales High Court, July 28, 2011) In a case of first impression, several movie and television production studios successfully obtained an injunction against an Internet service provider ("ISP") to block or impede access by its users to a website that was found to have infringed the copyright of the studios. The success of the instant action could lead to more litigation against ISPs to block similar websites. Newzbin Liable for Copyright Infringement Twentieth Century Fox Film Corporation, Universal City Studios Productions LLLP, Warner Bros. Entertainment Inc., Paramount Pictures Corporation, Disney Enterprises Inc., Columbia Pictures Industries Inc. (collectively, "the Studios") own various copyrights and exclusive licenses in movies and television programs. The Studios sought an injunction under Section 97A of the Copyright, Designs and Patents Act 1988 (the "CDPA") against defendant British Telecommunications PLC ("BT"), the largest ISP in the UK, to block all access to a website located at www.newzbin.com. The instant action follows the Studio's previous litigation against Newzbin Ltd., which was found guilty of copyright infringement after the Studios sought an injunction against its website. See Twentieth Century Fox Film Corporation and others v. Newzbin Ltd. [2010] EWHC 608 (Ch) ("Newzbin I"). However, the injunction proved ineffective after Newzbin set up a second website, which is the subject of the instant action. Accordingly, the Studios directed its action against ISPs like BT in order to obtain relief. Before commencing the instant action, the Studios inquired whether BT would agree to block access to the new Newszbin website or agree not to oppose an application for a court order. BT replied that it would require a court order to block service, and that it could not comment or commit to a position without first reviewing the relevant evidence and papers. The Studios then commenced its action in December 2010, and BT responded that it would oppose the application. Newzbin I Newzbin operated an online bulletin board which allowed users to post text or binary messages to usergroups. Binary messages can contain texts or movie uploads, which require other users to download. The movie is usually split into a series of smaller parts called RAR archive files. Users must download all RAR archive files to assemble a movie. Newzbin users wishing to download movies or other programs had to join its premium membership and pay a membership fee. Premium members could also access Newzbin's indices which categorized the different types of downloads available. In Newzbin I, the court held that Newzbin was aware that its premium members were infringing on the copyrights of the Studios. Although there were no records kept of the movies downloaded by specific premium members, the court found that Newzbin had authorized its premium members to make infringing copies of the Studios' works by communicating the copyrighted works to the public and making them available on its website. Accordingly, the court granted injunctions restraining Newzbin from infringing the copyrights of the Studios and ordered Newzbin to pay damages. Following the decision, the website ceased operation, but, in May 2010, a new Newzbin website began operating with similar features, functions, and conditions to the old website. The court found it hard to identify the individuals operating the website because they used pseudonyms such as "Mr. Pink" and "Mr. White." Twentieth Century Fox at 57. The servers hosting the new website were not located in the United Kingdom. The Studios' Request to Block Access to Newzbin BT is currently the United Kingdom's largest ISP. Although it allows its subscribers to receive data from various website, it is not a host to copyright infringing websites such as Newzbin's website. BT has in place various deterrents to some URLs such as those listed on the Internet Watch Foundation, an organization that combats child sexual abuse content. To achieve this, BT uses a system called "Cleanfeed" that is aimed at disrupting access by its subscribers to certain URLs. The Studios argued that BT should apply the same measures with regard to Newzbin's new website. In support of their argument, the Studios proffered a series of cases in which similar applications had been considered in Europe. Twentieth Century Fox at 96. The court noted that it was "not surprising" that there appeared to be no uniform approach to the issue, "given that Member States have implemented Article 8(3) of Information Society Directive in different ways" and proceeded to examine the legal issues brought up by BT. Id. at 97. Although acknowledging its "service provider" status within the meaning of Section 97A, BT contended that the court had no jurisdiction to impose the order sought by the Studios because: (1) BT is a "mere conduit" and those BT subscribers who are also members of Newzbin were using Newzbin's services, and not BT's, to infringe copyrights. (2) BT had no actual knowledge of the infringement, as required by Section 97A of the CDPA. BT contended actual knowledge to mean knowledge that its service was being used to commit a particular infringement of a particular copyright work by an identifiable individual. (3) The court did not have jurisdiction to impose the order requested by the Studios because doing so would be in contravention of Article 12(1) of the E-Commerce Directive. (4) The order sought by the Studios is contrary to Article 15(1) of the E-Commerce Directive, which prohibits Member States from imposing "a general obligation on [ISPs] . . . to monitor the information which they transmit." Id. at 161. (5) The order sought by the Studios would be contrary to Article 10 of the European Convention on Human Rights ("ECHR"). The Court Rejected BT's Arguments The court disagreed with BT's contention in that it was a mere conduit, stating that although it was obvious that subscribers were using the Newzbin website to infringe, it did not necessarily mean that the subscribers were not using BT's service to infringe either. "Each of those digital copies is made by assembling thousands of packets received via BT's service. . . . [although no complete copy is made in one go,] transient copies of all the packets that in aggregate make up a complete copy will be made on BT network equipment." Twentieth Century Fox at 103. This, according to the court, suggested that Newzbin users did use BT's service to infringe the Studios' copyright. To determine BT's next point regarding actual knowledge, the court considered how an ISP may be given actual knowledge of something which it was not aware of previously, and if actual knowledge is proved, what the scope of the injunction would be. After reviewing previous case law, the court held that it was sufficient that an ISP had actual knowledge of one or more persons using its service to infringe copyright rather than requiring specific knowledge of a specific user infringing a specific copyright. The court also disagreed with BT in relation to BT's query regarding the court's jurisdiction, noting that there was nothing in Article 12(1) of the E-Commerce Direct that limited the type of injunction that may be granted to require an ISP to terminate an infringing act. With regard to BT's argument that the order sought was contrary to Article 15(1) of the E-Commerce Directive, the Studios argued that the obligation sought against BT was not general in nature, but a "specific and limited one" because there was no need to monitor the information transmitted and it was only aimed at Internet traffic to the Newzbin website. Id. at 161. This was supported by Recital (47) of the E-Commerce Directive, which notes that "Article 15(1) does not 'concern monitoring obligations in a specific case and, in particular, does not affect orders by national authorities in accordance with national legislation." Id. at 162. The court agreed with the Studios' submission, holding that using automated means to "block[] (or at least impede) access to" Newzbin's website amounted to specific rather than general monitoring. The court also disagreed with BT's contention that the order violated Article 10 of the ECHR. Citing the right of freedom of expression, BT argued that the order would violate BT users' rights to receive information from websites like Newzbin. The court found no grounds for BT's contention because the Studios were not seeking a general order to "introduce, for all its customers . . . exclusively at the cost of [BT] and for an unlimited period, a system for filtering all electronic communications, both incoming and outgoing." Id. at 177. Rather, the Studios sought a clear and concise order that only required BT to use existing technology (i.e. its Cleanfeed system) to prevent its users from accessing Newzbin's website. "In my view, the order falls well within the range of orders which was foreseeable by ISPs on the basis of section 97A. . . . I therefore conclude that the order is one 'prescribed by law' within Article 10(2) ECHR, and hence is not contrary to Article 10 ECHR." Id. BT Failed to Persuade Court to Act With Discretion BT argued that even if the court had jurisdiction to grant an injunction, it should refrain from doing so because not all of Newzbin's content infringed the Studios' copyrights. Recognizing that granting the injunction could mean preventing all BT users from using Newzbin's non-infringing functions, the court nonetheless found that granting the injunction was appropriate because the Studios had established their entitlement to the injunction under Section 97A, and the incidence of such non infringing usage was "de minimis." Twentieth Century Fox at 186. Flood of Similar Litigation in Future Unlikely BT urged the court to use its discretion and not grant the injunction because allowing the Studios its request would open the floodgates to other litigation against BT to restrict access to websites similar to Newzbin. The court reasoned that even if other copyright holders instigated similar litigation, they would still have to go through a costly trial process and provide sufficient evidence to prove their case. Accordingly, the court thought it clear that "rightholders will not undertake future applications lightly. On the contrary, I consider it probable that they will concentrate their resources on seeking relief in respect of the more egregious infringers. I therefore do not anticipate a flood of such applications." Twentieth Century Fox at 189. Further, potential future applications were not a sufficient reason to refuse the Studios' application. Satisfied that the injunction sought by the Studios was proportionate to the infringement in question, the court granted the injunction. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. 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