Sky’s the limit for ISP blocking orders

Posted: June 3, 2013

Introduction

In a case against Sky and other internet service providers, a consortium of record labels has been granted a blocking injunction in relation to three file-sharing websites
[1].

Until relatively recently, that would be surprising news.  ISPs are understandably reluctant to interfere with their subscribers’ access to websites.  Rights-holders would in theory prefer to pursue infringing sites than a middle man – if that actually worked.  In fact, it has not worked, by and large: a fly-by-night peer-to-peer site could just as easily close and set up a fresh site.  

It was only with the “Newzbin” cases in 2010 [2] and 2011 [3] that the courts’ jurisdiction to hear cases of this sort was first tested and confirmed. The first site, Newzbin 1, quickly vanished after a direct injunction against the site operator – only to morph into a successor site, Newzbin 2.  But Newzbin 2 was soon quashed, this time through an action to order ISPs to block customer access to the site.

The latest order in this line of cases was granted to EMI and others, as explored below.  The case underlines that a “Newzbin” injunction can increasingly provide a quick and effective remedy for copyright owners against online piracy in the UK.  The evolving principles considered in the decision are beginning to form a coherent pattern of practice, affecting rights-holders, ISPs and site operators alike.

Background

The claimants in this case were major record labels.  The defendants were the six main retail ISPs in the UK.  The sites in question were three P2P file-sharing sites: KAT, H33T and Fenopy. 

The claimants sought an injunction against the defendants under section 97A of the Copyright, Designs and Patents Act 1988 (CDPA).  This section empowers the High Court to grant an injunction against an ISP, where the ISP actually knows that another person is using its service to infringe copyright.  In determining whether an ISP has such actual knowledge, the court can take into account all relevant circumstances, including whether the ISP has received a notice of infringement from a rights-holder. 

Evolving case law

As this is a rapidly developing area of law, Mr Justice Arnold took the opportunity to review recent decisions and, in particular, the two “Newzbin” decisions. 

The Newzbin 1 website indexed and provided links to infringing films and music, and the major Hollywood studios took action.  In March 2010 [4] Mr Justice Kitchin ruled that Newzbin was liable for communicating copyright-protected works to the public, and for authorising copyright infringement.  Newzbin was found to be deliberately indexing copyright content and to have infringed the claimants’ copyrights on a large scale.  The court granted an injunction against Newzbin to restrain further infringements. 

Newzbin was temporarily shut down, but returned in the guise of “Newzbin 2”, which essentially operated in exactly the same way as the original Newzbin site.   In June 2011 [5], the Motion Picture Association applied successfully to Arnold J for an injunction to force BT to prevent its customers from accessing the Newzbin 2 site.  In making that order, Arnold J relied on Kitchin J’s previous ruling against the original Newzbin site.  He held that the court had jurisdiction to make such an order against an ISP, without any need for the rights-holder to seek an injunction against the infringing site operator first.

Next, in the Dramatico case [6], Arnold J held that both the users and operators of The Pirate Bay website infringed the copyrights of the claimants in the UK.  Following that judgment, five of the six defendant ISPs indicated that they did not oppose orders under section 97A of the CDPA.  So Arnold J acceded to the claimants’ application, finding that the court had jurisdiction and that it was appropriate and proportionate to make those orders [7].

Application

With the benefit of these rulings, the claimant labels in the present EMI case adopted a slightly different approach.  They issued Part 8 Claim Forms and application notices on 20 December 2012, which were listed for a directions-only hearing on 19 February 2013.  This allowed the claimants in the intervening period to propose the terms of the orders sought to the defendant ISPs, and to seek directions from the court on whether the applications should be served on the site operators.   Although the sixth defendant, Virgin Media Limited, questioned the use of this procedure, Arnold J considered that it was justified.

The defendants agreed to the terms of the orders sought, and none opposed the orders, as long as the court was satisfied that it had jurisdiction, and that it was appropriate to make the orders.

Jurisdiction

Arnold J found that, for the court to have jurisdiction to grant the orders sought, four matters had to be established, namely that:

(a) The defendants were service providers for the purposes of section 97A;

(b) The site users and/or operators infringed copyright;

(c) The site users and/or operators used the defendants’ services to do that; and

(d) The defendants had actual knowledge of this.

Decision

The court found the ISPs to be aware that customers were using the P2P services to download copyright-protected sound recordings without permission.  In the circumstances, a blocking order was proportionate and necessary.

(a) Were the defendants service providers?

Arnold J was satisfied that the defendants were service providers within the meaning of section 97A of the CDPA.  None of them had suggested otherwise.

(b) Did the site users infringe copyright?

The claimants contended that copyright had been infringed in two ways: first, by copying sound recordings (an act restricted by section 17 of the CDPA); and secondly, by communicating sound recordings to the public (an act falling within section 20 of the CDPA). 

Arnold J accepted the claimants’ expert evidence that users of the sites selected a bit torrent file to copy particular content from the infringing site and downloaded the content files onto their computer.   It followed that the content files contained a copyright work, and the user did not have a licence from the copyright owner to download it in this way, so the user was infringing copyright.  The judge therefore concluded that UK users of the sites, who had accounts with the defendants, had infringed (and continued to infringe) the claimants’ copyrights by copying the claimants’ sound recordings on a large scale.

Did the site operators infringe copyright?

The claimants contended that the site operators were liable for infringement of their copyrights by:
(i) communicating their sound recordings to the public;
(ii) committing the tort of authorising infringement by UK users;
(iii) being jointly liable for infringement by UK users. 
Each of these points was considered in detail.

Communication to the public

• In the Newzbin 1 case, Kitchin J had ruled that the Newzbin site operator had communicated the claimants’ copyright works to the public by electronic transmission, since the service provided by the defendants was not purely passive.  Arnold J noted that there was no material difference between the Newzbin 1 site and the current sites.  Accordingly, he concluded that the site operators had communicated the claimants’ recordings to the public.

• The judge also found that these communications were made to a “new” public, applying the criteria identified in Societá Consortile Fonografici v Del Corso [8], since the operators intervened, in full knowledge of the consequences of their actions, to give an indeterminate number of others access to the claimants’ copyright works.

• Arnold J found that this communication to the public occurred in the UK: although the sites and their operators were based overseas, it was reasonably clear that the sites were targeted at the public in the UK.  In reaching this decision, he applied the criteria in Football DataCo v Sportradar Gmbh [9] and considered the claimants’ further arguments that a substantial proportion of the visitors to each site was from the UK, recordings listed on the sites were by UK artists and/or in demand in the UK, and English was the main language of the sites.

Authorising infringement and joint liability

• When deciding whether or not the operators had committed the tort of authorising infringement by UK users, Arnold J considered the nature of the relationship between the sites and their users, the means used to infringe, the inevitability of infringement, the degree of control and the steps taken to prevent infringement.  He found that the entire purpose of each site was to attract users by providing them with the free means to copy and to make available content in which people were interested, and for which they would otherwise pay.  Also relevant to his decision was the fact that each site generated substantial advertising revenues. 

• Arnold J found that infringement was inevitable as the sites induced, incited or persuaded the infringements of copyright committed by users.  The operators were therefore liable for authorising copyright infringement, and also jointly liable for the infringements of their users.

(c) Did the site users and/or operators use the defendants’ services to infringe copyright?

Here, Arnold J applied the decisions in the Newzbin 2 and Dramatico cases, finding that both users and operators of the sites used the defendants’ internet services to infringe copyright. 

(d) Did the defendants have actual knowledge of the infringement?

The judge found the defendants to have actual knowledge of the infringement, as they had been given appropriate notification by the claimants. 

Arnold J also considered whether it was proportionate to grant a blocking order in the circumstances. He believed that it was appropriate, as he had thoroughly considered the facts of the case and balanced the rights of each of the parties.  The blocking orders were narrow and targeted, containing safeguards in the event of any change in circumstances, and the costs to the defendants of implementing them would be modest.  Arnold J concluded that the blocking orders were therefore necessary and appropriate to protect the claimants’ intellectual property rights.  

Comment

The case shows that the UK courts are adopting a flexible approach to keep pace with technological developments.  The claimants’ approach to the application (under CPR Part 8 and seeking to agree the scope of the order) truncated the process significantly.  Blocking orders against ISPs will never prevent file-sharing sites from re-appearing under a different guise.  But the courts are willing to grant an order against an ISP under section 97A without requiring the claimant to obtain an injunction against the infringing site operator first. 

Following this latest decision, it is likely that rights-holders will first notify ISPs of the infringing services available to their customers, and then seek the ISPs’ agreement to the scope of a blocking order.  This should speed up the process of seeking approval from the court for such orders, and Arnold J’s careful analysis of the legal issues and implications in this case provides a useful roadmap for all concerned, particularly in his conclusion that “Newzbin” injunctions can be proportionate and reasonable.

The availability of blocking orders is an attractive proposition for rights-holders, as it is a reasonably swift and cost-effective tool, particularly as the major ISPs have now in practice conceded that such orders can be appropriate for P2P and similar services.  Accordingly, we can expect to see more actions by rights-holders using this procedure against ISPs – with the courts, as always, acting as the impartial arbiter, but seeking guidance from this chain of authorities. 

The defendants in this case were not represented.  It is likely that ISPs will continue to take this pragmatic approach in the face of such applications, as they will rarely be in a position to make submissions on particular sites.  As previous cases demonstrate, however, the specific facts of infringement by UK users and site operators are still of critical importance.  That said, proportionality may well be assumed where the terms of the order are agreed between the parties beforehand.

Sky may be the limit in that sense.  Even if ISPs are now on the horizon of the rights-holders, they would do well to get the ISPs on side.

Paddy Gardiner, Partner, Michael Simkins LLP

Gillie Abbotts, Associate, Michael Simkins LLP

 

[1] EMI Records Ltd v. British Sky Broadcasting Ltd [2013] EWHC 379.
[2] Twentieth Century Fox Film Corp. v. Newzbin Ltd [2010] EWHC 608 (widely referred to as the “Newzbin 1” case).
[3] Twentieth Century Fox Film Corp. v. British Telecommunications plc [2011] EWHC 1981 (a.k.a. the “Newzbin 2” case).
[4] “Newzbin 1”, as above.
[5] “Newzbin 2”, as above.
[6] Dramatico Entertainment Ltd v British Sky Broadcasting Ltd [2012] EWHC 268.
[7] Dramatico Entertainment Ltd v. British Sky Broadcasting Ltd (No. 2) [2012] EWHC 1152.
[8] C-135/10 Societá Consortile Fonografici v. Del Corso [2012] ECR I-0000.
[9] Case C-173/11 Football DataCo Ltd v. Sportradar Gmbh [2012] ECR I-0000