Sony Music Entertainment (uk) Ltd and Others v Easyinternetcafe Ltd

Hearing date: Wednesday 15 January 2003

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this

judgment and that copies of this version as handed down may be treated as authentic.

INTRODUCTION

This is an application by the claimants (the first, third and fifth claimants suing on behalf of themselves and other members of the British Phonographic Industry Limited ("BPI")) for summary judgment for a declaration that the CD Burning Service as set out in the particulars of claim, is unlawful if provided in circumstances where the owner of the copyright in the relevant sound recording has not licensed the defendant to make a CD-R copy of its work. In addition, the usual inquiries are sought as to damages both in their own right and in a representative capacity (including additional damages) and/or an account of profits in respect of the defendant's acts of infringement.

The Part 24 application was issued on 4 October 2002, the claim form with the particulars of claim having been issued on 2 July 2002.

The defendant is a company, which owns and operates internet cafés at eight sites within the United Kingdom as identified in paragraph 6 of the particulars of claim.

The claim is in respect of five sound recordings identified in paragraph 10.3 of the particulars of claim.

There is no dispute as to the title to sue in respect of these five works.

THE DEFENDANT'S OPERATION

There is no dispute as to the operation of the defendant's internet cafés in relation to its CD burning service. Upon payment of a fee, a customer is provided with access to the internet via a PC. Those PCs are connected into a central server, and there are no copying or other facilities that can be utilised by the customer at the screen. Upon payment of the fee the customer is given a user ID. Files downloaded by a customer can be stored by the customer on a private directory on the café's server identified by reference to the personal ID.

After the termination of a session a customer can ask the staff to download on to a CD-R the material in his private file area. That area can include sound recordings downloaded from the internet. If the option is taken up, the customer presents his user ID to the staff member, who has access to the relevant customer's allocated area, and downloads the relevant files on to the CD-R using the CD writer programme. A fee of £5.00 (five pounds) is paid for this being £2.50 (two pounds fifty pence) for the CD-R and £2.50 (two pounds fifty pence) for the service.

The defendant's evidence (which I accept for the purpose of this application) is that the members of staff are prohibited from looking at the contents of any files, unless the customer agrees. It is quite clear also that in the logon process a significant number of warnings are given to customers in respect of copyright infringement.

The claimants contend that the downloading of sound recordings from the internet without the consent of the owners of the copyright infringes the copyright in the sound recordings contrary to section 17(1) and 18(1) of the Copyright, Designs and Patents Act 1988 (" CDPA 1988").

The defendant does not dispute that if there has been a downloading by a customer in that way and a copying that the customer would infringe any relevant copyright in the sound recordings, subject to a statutory defence under section 70 CDPA 1988 to which I shall refer later in this judgment. What the defendant denies is that it infringes the copyright by virtue of that process.

The claimants' case is based entirely on the premise that the relevant recordings were downloaded from the internet and then burnt on to the CD-R.

In the light of evidence introduced in the case by the defendant there is a suggestion that the recordings could have been created from a CD provided by the customer for copying. It is clear that the defendant's process enables copying by burning on to a CD both as regards downloaded material and material uploaded from (for example) another CD or a floppy disk. I do not see that there is any evidence to suggest that a floppy disk has been used in this case because I take notice of the fact that the memory size of the floppy disk would not be sufficiently large to accommodate the recordings.

The claimant's contentions are based solely in the particulars of claim on downloading from the internet. In his skeleton argument on behalf of the claimants, Mr Spearman QC, who appears with Mr Saini, and in his oral submissions submitted that even if there was an uploading from material provided by a customer, the inference to be drawn was that the uploaded material nevertheless resulted in the production of an infringing copy CD. Mr Arnold QC, who appears for the defendant, objected to the case being put that way without an application to amend.

Mr Spearman QC applied to amend and I indicated that I would give him permission to amend but that would be on terms that the defendant would have an adjournment because Mr Arnold QC said he was unable to deal with that at this stage (quite properly), and therefore it would be at the claimants' expense. In the event, Mr Spearman QC decided that that was an offer which was not worth taking up, and he did not proceed with his application to amend. So the claimants' case can only succeed if it establishes that the songs in question were downloaded from the internet and burned onto the CD that way.

DOWNLOADING OR UPLOADING

The claimants served a detailed report by a Mr Sanderson. That report indicates that in his opinion the material was downloaded from the internet. It is fair to say that the upload issue was not present at the time of his report and I do not think that it can be said on behalf of the claimants that that report has any weight as regards downloading as opposed to uploading.

The issue of downloading or uploading was referred to somewhat obliquely in the defence. In paragraph 5(3) it is said:

"The defendant is unable to admit or deny that the sound recordings were downloaded from the internet as opposed to being uploaded by customers from their own CD ROMs or floppy disks and requires the claimants to prove the same."

It is impossible at this stage for any further evidence to be adduced as to whether the material was downloaded or uploaded. The defendant does not adduce any evidence nor can it; it does not even know the identity of the customer.

The only evidence adduced by the defendant is extremely sparse. In paragraph 10 of Mr Bett's witness statement, he says it is possible to upload files, that in theory it should take the same amount of time to upload as to download, and it is therefore technically possible.

A Mr Henderson, an employee of Hewlett-Packard Limited, a technical architect, also admits to that as a theoretical possibility.

It would have been open to the defendants to adduce some evidence as to the percentage of customers who provided them with material to upload as opposed to material to download. They have chosen not to adduce any such evidence. The only evidence is that in paragraph 13 of the witness statement of Mr da Silva where he says:

"It was possible to upload music on to the eIC terminals, so that a customer could listen to the music whilst they were working. However, it could take a long time. I once tried to assist a customer to upload music and it took one hour forty minutes and even then, the upload was not complete."

I read that paragraph as showing that uploading only occurred once in his experience and that it took an inordinately long time.

Mr Spearman QC submits that, on the balance of probabilities, I can determine that the material was downloaded and not uploaded. First, he says that what the operations of the defendant here are orientated to, is being an internet café. I do not find any great assistance from that. Secondly, he submits that there was no copying facility at the terminals. That is right but that does not advance the matter further as the copy facility is done by the operator at the desk. Nevertheless, Mr da Silva's evidence is that the desk is very busy and if this uploading operation would take as long as he suggests it is unlikely to my mind that it would occur. Thirdly, Mr Spearman QC submits there would be no possibility of uploading from floppy disk. I agree with that, but that does not exclude the possibility of uploading form a CD. Finally, he says that there is no evidence to show that anybody did it, it is merely described as a technical possibility.

There has been no evidence produced to show that there is an authorised compilation of the five recordings in question. If the compilation was already on an infringing copy, there is no sense to my mind in a customer going to the expense of having a copy produced for £5.00 (five pounds) (or £2.50 (two pounds fifty pence)) at the defendant's premises when he clearly has access to copied material which would only cost him the cost of the CD ROM which is about £0.25 (twenty-five pence).

If there was any credible evidence, the defendant would have had ample opportunity to produce it. This uploading issue from their point of view has been raised for many months....