Content on the Internet - When might ISPs be liable? – Part 2 – the NewzBin Cases

Background

For an overview of ISPs’ liability please see our briefing - Content on the Internet - When might ISPs be liable?

Two cases, both involving NewzBin, provide some interesting insights into the circumstances in which an ISP will be liable for copyright infringement or, although not liable for the infringement, obliged to block a site which infringes third party copyrights.

The second case, commonly known as NewzBin 2, demonstrates how rights owners may still be able to protect their copyrights when the ISP moves offshore and is outside the jurisdiction of the English courts.

Twentieth Century Fox Film Corporation (and others) –v- NewzBin

NewzBin’s website on Usenet discussion forums aggregated a large amount of the material found on those forums, including locating and categorising copies of films, displaying the titles of those films, providing a facility for users to search for a copy of a particular film, displaying the results, and providing an easily used mechanism which allowed users to create ‘NZB files’ which the user could then save or open with a third party application, resulting in the user acquiring a set of files which reconstituted the original film and which were suitable for burning to a DVD which in turn could be played on a DVD player.

NewzBin had been aware for a long time that most of the films available through its site were very likely to be protected by copyright, and that users who downloaded those films were infringing copyright. It could have installed a filtering system, searched against databases provided by film companies and restricted access to films protected by copyright, but it chose not to do so and actively encouraged its editors to focus on films rather than materials such as e-books.

Twentieth Century Fox and other film companies sued NewzBin for copyright infringement on the grounds that NewzBin was:

• authorising acts of infringement by its users;
• procuring, encouraging and entering into a common design with its users to infringe; and
• communicating the film companies’ copyright works to the public.

NewzBin argued that it was merely a search engine (like Google); its website was designed to index the entire content of Usenet and that, where possible, it provided hyperlinks so that any supply of infringing films was between the user and the relevant Usenet server operator, and NewzBin played no part in that supply. The judge rejected those arguments.

Authorisation.  Section 16 of the Copyright, Designs and Patents Act 1988 gives the owner of the copyright in a film the exclusive right to copy that film. Copyright in a film is infringed by a person who, without the licence of the copyright owner, copies, or authorises another to copy, that film. 

 ‘Authorise’ in this context means granting or purporting to grant the right to do the act complained of. That grant or purported grant may be express or it may be implied from the circumstances.  ‘Authorise’ does not mean mere enablement, assistance or encouragement.

The judge said: ‘In a case which involves an allegation of authorisation by supply, these circumstances may include the nature of the relationship between the alleged authoriser and the primary infringer, whether the equipment or other material supplied constitutes the means used to infringe, whether it is inevitable it will be used to infringe, the degree of control which the supplier retains and whether he has taken any steps to prevent infringement. These are matters to be taken into account and may or may not be determinative depending upon all the other circumstances’.

He considered it important that the NewzBin system reassembled the original film and, in the case of a film protected by copyright, inevitably made an infringing copy of that film - once a film was entered in the NewzBin index, use of the NZB facility was bound to result in that film being copied. The NZB facility provided the means of infringement was created by NewzBin and was entirely within NewzBin’s control.

The judge was satisfied that a reasonable user would think that NewzBin purported to have the authority to grant permission to copy any film chosen from the Movies category on its website and that NewzBin had ‘sanctioned, approved and countenanced’ the copying of the films.

Procuring, encouraging and entering into a common design.  The judge stated that mere, or even knowing, assistance or facilitation of infringement was not enough; NewzBin had to have involved itself in the infringement so as to make it his own, and that it would have done so if NewzBin had ‘induced, incited or persuaded the primary infringer to infringe or if there had been a common design or concerted action or agreement on a common action to secure the doing of the infringing act’. 

He decided that because:

• NewzBin operated a site which was designed and intended to make infringing copies of films available to users;
• NewzBin had structured the site so as to promote  infringement by guiding users to infringing copies and then providing them with the means of download the infringing copies;
• use of the NZB facility inevitably resulted in the production of an infringing copy;
• - NewzBin had encouraged and induced its editors to make reports of films protected by copyright;
• NewzBin had assisted users to engage in infringement by giving advice through the sharing forums;  and
• NewzBin had profited from the infringement

there was ample evidence to conclude that NewzBin had involved itself in the infringement so as to make it his own.

Communication to the public. Section 20 of the Copyright, Designs and Patents Act gives the owner of the copyright in a film the exclusive right to communicate that film to the public, including making the film available to the public 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.

NewzBin’s defence was that its service was ‘a passive one’; it merely acted as an intermediary in providing a link to sites from which the films could be downloaded.

The judge disagreed. He decided that NewzBin's users downloaded the films from a place and at a time individually chosen by them and that the service was not passive and did not simply provide a link to a film made available by a third party. NewzBin had made the films available and it had done so by providing a sophisticated technical and editorial system and it had provided the service in full knowledge of the consequences of its actions. NewzBin had therefore made the films available to its users and in doing so communicated them to the public.

Film Corporation (and others) –v- British Telecommunications plc (NewzBin 2)

Section 97A of the Copyright, Designs and Patents Act 1988 gives the court the power to grant an injunction against a service provider who has actual knowledge of another person using its service to infringe copyright.

The Motion Picture Association wrote to BT asking it to block access to or not oppose an application for an order requiring it to block access to the website NewzBin2. NewzBin2 is the phoenix from the ashes of NewzBin. It uses the same code and database as the original NewzBin site, but it is hosted offshore and outside the jurisdiction of the English courts.

BT replied that it needed a court order to block access to any service and that it could not commit to taking a position in court without having reviewed all the papers. When the film studios made the application, BT decided that it would oppose it.

The court rejected the following arguments put forward by BT and ordered BT to block the NewzBin2 site.

BT’s service was not used to infringe copyright. Users were using NewzBin2’s service to infringe.  The judge took the view that BT’s subscribers who used NewzBin2 were not passive recipients of infringing material; they actively downloaded material and used BT’s service to infringe copyright. The operators of the NewzBin2 website made the films available in such a way that users could access them over BT’s network and that was sufficient to constitute use of BT’s service to infringe.

BT had no actual knowledge of infringement. BT claimed that it did not have actual knowledge of a particular identified or identifiable individual using its service to commit a particular infringement of a particular copyright work. The judge took the view that because service providers are best place to bring infringing activity to an end, the requirement for actual knowledge should not be interpreted too restrictively. BT knew that:

• the users and operators of NewzBin2 infringed copyright on a large scale;
• the users and operators of Newbin2 infringed the copyrights of film studios;
• the users of NewzBin2 included BT subscribers; and
• those users used BT’s service to receive infringing copies of copyright works made available to them by Newzbin2.

Therefore, the judge concluded, BT had actual knowledge.

Ordering BT to block NewzBin2 would be contrary to Article 12(1) of the E-Commerce Directive. That article states that an ISP who is a mere conduit is not liable for the information transmitted. But Articles 12(3) makes it clear that Articles 12 does not prevent a court ordering the ISP to terminate or prevent the infringement. 

Ordering BT to block NewzBin2 amounted to a general obligation to monitor which could not be ordered by the court. (Under Article 15 of the e-Commerce Directive, Member States of the EU may not impose a general obligation to monitor.) Instead the judge took the view that an order to impede access to the NewzBin2 website by automated means would not require BT to carry out a detailed inspection of its subscribers’ data.

Ordering BT to block NewzBin2 would be contrary to Article 10 of the European Convention on Human Rights. Article 10 concerns the right to freedom of expression, in this context the rights of BT’s subscribers to receive information. The judge rejected this argument.

The order should be refused because the studios did not own all the copyrights being infringed by use of NewzBin2. The judge thought that the fact that an order would protect other rights owners was a good reason for granting the order.

The order should not be made because it would lead to other applications. The judge took the view that other rights holders would not make applications for similar orders lightly; they would have to prove the matters which had already been decided in Twentieth Century Fox (and others) –v- NewzBin.

The order should not be made because it could be circumvented by technical means.  The judge took the view that circumvention would not necessarily be easy and not all users would go to the trouble of acquiring the expertise necessary to circumvent the order, and that it would be right to grant the order even if it only prevented access to NewzBin2 by a minority of users.

The case should be referred to Europe – to the Court of Justice. The judge decided that the principles were sufficiently clear for him to determine the application without a reference to the court of Justice.

This was a test case and we can expect film studios to seek similar orders against other ISPs in an attempt to block the NewzBin site.