Twentieth Century Fox Film Corporation Universal City Studios Productions Lllp and Others v British Telecommunications Plc
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD |
| Judgment Date | 26 October 2011 |
| Neutral Citation | [2011] EWHC 1981 (Ch),[2011] EWHC 2714 (Ch) |
| Docket Number | Case No: HC10C04385 |
| Court | Chancery Division |
| Date | 26 October 2011 |
[2011] EWHC 1981 (Ch)
The Hon Mr Justice Arnold
Case No: HC10C04385
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Richard Spearman QC and Adrian Speck (instructed by Wiggin LLP) for the Applicants
Antony White QC and Roger Wyand QC (instructed by BT Legal) for the Respondent
Hearing dates: 28–29 June 2011
Further written submissions: 15, 19 July 2011
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.
MR JUSTICE ARNOLD
Contents
| Topic | Paragraphs |
| Introduction | 1–4 |
| Procedure | 5–10 |
| The order sought | 11–13 |
| The expert evidence | 14–17 |
| Factual background | 18–74 |
| The problem of online copyright infringement | 19–22 |
| Solutions to the problem | 23–24 |
| Newzbin1 | 25–44 |
| Events following the judgment | 45–47 |
| Newzbin2 | 48–58 |
| BT's services | 59–63 |
| Other NZB sites | 64 |
| The IWF's blocking system | 65–69 |
| Cleanfeed | 70–74 |
| The legal context | 75–91 |
| 76 | |
| The Convention rights | 77–78 |
| 79–82 | |
| Domestic implementation of the E-Commerce Directive | 83 |
| 84–85 | |
| Domestic Implementation of the Information Society Directive | 86 |
| The Enforcement Directive | 87–90 |
| Domestic implantation of the Enforcement Directive | 91 |
| Relevant principles of interpretation | 92–95 |
| Interpretation of domestic legislation in the context of European directives | 93 |
| Interpretation of European directives | 94–95 |
| Other European cases | 96–97 |
| Jurisdiction | 98–177 |
| 1. No use of BT's service to infringe copyright | 99–113 |
| Users | 100–108 |
| Operators | 109–113 |
| 2. No actual knowledge | 114–158 |
| What must the service provider have "actual knowledge" of? | 116–148 |
| In what manner may a service provider be given "actual knowledge"? | 149 |
| What is the scope of the injunction that may be granted? | 150–156 |
| The present case | 157–158 |
| 3. Contrary to Article 12(1) of the E-Commerce Directive | 159–160 |
| 4. Contrary to Article 15(1) of the E-Commerce Directive | 161–162 |
| 5. Contrary to Article 10 ECHR | 163–177 |
| Discretion | 178–201 |
| 1. The Studios are not interested in the whole of the Newzbin2 website | 179–186 |
| 2. Exposure to multiple claims | 187–191 |
| 3. Efficacy | 192–198 |
| 4. Proportionality | 199–201 |
| A reference to the Court of Justice? | 202–203 |
| Conclusion | 204 |
Introduction
This case is about the legal remedies that can be obtained to combat online copyright infringement. The Applicants ("the Studios") are six well-known film production companies or studios that carry on business in the production and distribution of films and television programmes. The Studios are members of the Motion Picture Association of America Inc, and they bring this application in a representative capacity on behalf of all group companies of the Studios that are owners or exclusive licensees of copyrights in films and television programmes. The Respondent ("BT") is the largest internet service provider ("ISP") in the United Kingdom. By this application the Studios seek an injunction against BT pursuant to section 97A of the Copyright, Designs and Patents Act 1988 (" CDPA 1988"). I will set out the precise terms of the order sought below, but in essence it is intended to block or at least impede access by BT's subscribers to a website currently located at www.newzbin.com ("the Newzbin2 website" or just "Newzbin2"). 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.
The application is a sequel to a successful claim for copyright infringement brought by the Studios against Newzbin Ltd, which formerly operated an almost identical website located at the same uniform resource locator or URL ("the Newzbin1 website" or just "Newzbin1"). As explained in more detail below, Newzbin Ltd was found by Kitchin J to have infringed the Studios' copyrights on a large scale: Twentieth Century Fox Film Corp v Newzbin Ltd [2010] EWHC 608 (Ch), [2010] FSR 21 (" 20C Fox v Newzbin"). He granted an injunction against Newzbin Ltd to restrain further infringements of the Studios' copyrights. Subsequently the Newzbin1 website ceased operation. Shortly afterwards, however, the Newzbin2 website commenced operation at the same location. It operates in essentially the same manner as the previous website, and thus provides the means for continued large-scale infringement of the Studios' copyrights. As described in more detail below, the operators of the Newzbin2 website are unknown, but the operation appears to have moved offshore. It is thus effectively beyond the reach of this court.
In these circumstances, the Studios contend that the only way in which they can obtain effective relief to prevent, or at least reduce the scale of, these infringements of their copyrights is by means of an order against BT (and thereafter the other ISPs) of the kind now sought.
Although the Studios are formally the only applicants, the application is supported by the following organisations representing other groups of rightholders, a representative of each of which has made a witness statement in support of the application:
i) BPI (British Recorded Music Industry) Ltd, which represents the interests of record companies in the UK. It currently has about 400 members who produce about 90% of the sound recordings sold legally in the UK.
ii) International Federation of the Phonographic Industry, which represents the interests of the recording industry worldwide. It has 1,400 members in 66 countries and affiliated associations in 45 countries.
iii) The Association for UK Interactive Entertainment, which represents the interests of almost all major companies involved in the development and publication of video games in the UK.
iv) The Publishers' Association, which represents the interests of UK book publishers.
Procedure
I was informed by counsel that, so far as they and their professional and lay clients are aware, this is the first occasion on which an effective application for a section 97A order against an ISP has been made. For that reason, it is worth describing the procedure adopted in a little more detail than I otherwise would.
The Motion Picture Association wrote to BT on 23 September 2010 asking whether BT would agree to block access to the Newzbin2 website or alternatively would agree not to oppose an application for a court order to that effect. The letter summarised the conclusions of Kitchin J in 20C Fox v Newzbin and provided evidence about the operation of the Newzbin2 website. On 7 October 2010 BT replied as follows:
"BT does not support or condone copyright infringement. We have a strong commercial interest in seeing legitimate content services flourish online.…
With respect to your requests, BT requires a Court order to block a service otherwise it would face business exposures, including potential legal liabilities, on a number of fronts.
Further, BT cannot commit to take a particular position in court ahead of reviewing the relevant papers and evidence and understanding the full implications for our business."
The Studios commenced the application on 15 December 2010 by issuing and serving a claim form and an application notice, both seeking an order under section 97A, together with evidence in support. BT wrote the following day to say that it would oppose the application.
At BT's suggestion, both parties served statements of case: the Studios served Particulars of Claim on 9 February 2011, and BT served a Defence on 8 March 2011. I am not sure that this was essential, but it was a sensible step to take in the circumstances of the present case.
BT served its evidence in answer to the application on 11 April 2011. The Studios served evidence in reply on 20 May 2011. BT served evidence in rebuttal on 6 June 2011. The Studios served a further witness statement on 16 June 2011. The parties' counsel then prepared sequential skeleton arguments. I found that a helpful course.
The evidence filed by the parties reveals a great deal that is either common ground or at least not seriously disputed. There are, however, certain limited conflicts of evidence. It was agreed between counsel at the outset of the hearing that it was not necessary to direct cross-examination in order to resolve those conflicts. Rather, the court would be entitled to prefer the evidence of one witness to another if there were rational grounds for doing so. If the court was unable to decide whose evidence was to be preferred on a particular point without the benefit of cross-examination, then the Studios as the party bearing the burden of proof would fail on that point. Again, I regard this as a sensible approach.
The order sought
The Studios' application notice sought an order in the following form:
"The Defendant shall prevent its services being used by users and operators of the website known as NEWZBIN and NEWZBIN2 to infringe copyright."
Some of the objections raised by BT to the application arose out of this form of order, although it is fair to say that the Studios' solicitors' covering...
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