This article was first published in the June 2010 edition of the World Intellectual Property Report.
In a judgment that will be read with interest by ISPs, Kitchin J has clarified the extent to which intermediaries can be held liable for copyright infringement under UK law.
Kitchin J held that Newzbin Limited (“NL”) was liable for copyright infringement in relation to the activities of its members on its website, which indexes and collates files, including those containing films.
The Newzbin website
The Newzbin website facilitates the use of and access to content on Usenet, a worldwide distributed internet discussion forum. The claimants in the action were six well-known makers and distributors of films.
Internet users can upload content onto Usenet in the form of either text or binary (non text) messages. The messages are posted to a “newsgroup” and can then be shared by means of Usenet servers. When a user uploads a film onto Usenet it is split into a number of smaller parts (typically up to 100) which are in turn split into 50 or more messages. Each of these messages is posted into the newsgroup separately. As a result a film may be distributed across hundreds or even thousands of messages.
Newzbin provides various “indices” which collate the messages and categorise their content in order to assist its members. The “Newzbin Index”, which is the highest level index offered, contains entries which are reviewed by Newzbin “editors”. In the case of entries relating to films an editor might provide a link to a website such as the IMDb (a comprehensive motion picture database). In addition, premium members of Newzbin can create “NZB” files. These allow the user to create a set of files which are suitable for burning to a DVD.
Copyright infringement claims
The Claimants claimed that NL infringed their copyrights, either 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 the claimants’ copyright works to the public, namely NL’s members.
The claimants also sought an injunction under section 97A of the Copyright Designs and Patents Act 1988 (“the Act”), since they claimed that NL is a service provider with actual knowledge of other persons using its service to infringe.
(i) Authorising acts of infringement by its members
After careful consideration of the case law in this area, with particular regard to the English case C.B.S Songs Ltd and ors v Amstrad Consumer Electronics Plc  1 A.C. 1013, and subsequent Australian case law, Kitchin J found that NL authorised acts of infringement by its members.
Kitchin J first had to determine whether the claimants’ copyright had been infringed by NL’s premium members. This was found to be the case since the number of premium members is substantial and these members are primarily interested in films. Therefore, it was considered very likely that the premium members had made use of the facilities to which they had subscribed and in doing so a number had downloaded copies of the claimants’ copyright films.
Kitchin J referred to several aspects of the Newzbin service which he considered to be significant. This included the fact that Newzbin identifies all of the perhaps several thousand messages which make up a particular binary work and saves the user the substantial task of manually locating and identifying each of the files separately. As such, premium members receive more than just a facility which indexes and categorises the content The NZB facility was also considered to be of note. This provides the means to retrieve all of the Usenet messages and reassemble the original binary work from its component parts. Kitchin J stated that once a work is entered onto NL’s Newzbin index, use of the NZB facility is bound to result in that work being copied. The NZB facility provides the means for infringement, was created by NL and is entirely within NL’s control. In addition, Kitchin J found it significant that a very large proportion of the content of the Movies category on the Newzbin site is commercial and so very likely to be protected by copyright. Further, NL has not installed a filtering system to prevent infringement, which was shown by the claimants to be a relatively straightforward process. Instead, NL actively encouraged its editors to make reports on films and has rewarded them for doing so.
Kitchin J described the warnings on its website to its editors and to its members regarding infringing copyright as “cosmetic” and “window dressing”. As such he concluded that a reasonable member would deduce from NL’s activities that it purports to possess the authority to grant any required permission to copy any film that a member may choose from the Movies category on Newzbin.
In considering whether NL had procured an infringement of copyright or participated in a common design to infringe, Kitchin J considered the case law on this matter and concluded that mere (or even knowing) assistance or facilitation of the primary infringement is not enough. The joint tortfeasor must have been so involved as to make the tort his own. Kitchin J found that, the site was structured in such a way as to promote infringement by guiding members to infringing copies of films and providing them with the means to download infringing copies at the click of a button (via the NZB facility) and so concluded that the defendant had procured and engaged in a common design with its premium members to infringe the claimants’ copyrights.
Infringement by communication to the public
The claimants claimed under s 20 (2)(b) of the Act that is, that NL had infringed “by making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them”. S 20(2)(b) of the Act implements Article 3 of Directive 2001/29/EC. The scope of Article 3 was considered by the ECJ in Case C-306/05 Sociedad General de Autores y Editores de Espana (SGAE) v Rafael Hoteles SA  ECR 1-11519. This case involved the SGAE (the body responsible for managing IP rights in Spain), who complained that the installation and use of television sets in the Rafael hotel involved the communication to the public of works falling within its repertoire. The ECJ interpreted the term “communication to the public” broadly and noted that it should be interpreted with a view to the overarching purpose of the Copyright Directive to reward authors.
In applying the guidance from the ECJ, Kitchin J held that NL provides a service which is not even “remotely passive” and it has intervened in a highly material way to make the claimants’ films available to a new audience, that is, its premium members.
Additional award of damages
The claimants submitted that they were entitled to an additional award of damages under s 97 of the Act. Kitchin J commented that the court hearing the enquiry as to damages should note that NL had engaged in a deliberate course of conduct, with knowledge that the vast majority of the materials provided in the Movies category of its website are commercial and so likely to be protected by copyright.
Injunction for infringement
Kitchin J considered it appropriate to grant an injunction to protect the claimants’ repertoire and provide them with effective relief.
Injunction under s 97 A of the Act
An injunction under s 97A of the Act was not granted. It was considered that the scope of the injunction applied for was too wide, since the claimants were seeking an injunction to restrain activities in relation to all binary and text materials in respect of which they owned no rights and about which little or no evidence had been submitted. In addition, Kitchin J found that NL did not have actual knowledge of other persons using its service to infringe all such rights. As such he considered it unnecessary since the scope of the injunction would not extend any further than the injunction already granted for infringement.
This case provides much-needed clarification as to the extent to which under UK law intermediaries can be held liable for copyright infringement. Whilst the case is notable since NL was found liable even though it did not itself host the content in question, it turns to a large extent on its particular facts. Accordingly, it should not cause too much alarm for ISPs. In many ways, it confirms the advice already being given to ISPs, that is, that they should set their systems up in such a way that they are not perceived to be sanctioning infringements. In the case of NL, it organised its system in such a way as to encourage and facilitate the downloading of films that were protected by copyright. The Digital Economy Act 2010, which became law on 8 April 2010, provides a statutory basis for providing a mechanism to require ISPs to block certain websites.