Newzbin: "unlawful means" conspiracy claim upheld

Twentieth Century Fox Film Corporation and other companies v Harris and others [2014] EWHC 1568 (Ch), a Chancery Division for England and Wales decision of Mr Justice Barling a couple of weeks ago, is the latest (will it be the last?) bit of the Newzbin saga to hit the British courts.

All of the claimant companies, members of the Motion Picture Association of America, owned copyright in many films and television programmes. These proceedings arose from two earlier actions -- Newzbin 1 and Newzbin 2,  on which see this Katpost here.  Newzbin 1 was a copyright claim concerning the operation of a website by Newzbin Ltd for the purpose of making unlawful copies of copyright works available to its users, in which the court held that there had been extensive infringement of the claimants' copyrights.  Newzbin 2 involved the 'reincarnation' of the offending website as a similar website operating outside the jurisdiction. Here the court made an order requiring the major UK internet service providers to take steps to prevent subscriber access to the reborn site. The claimants, having become increasingly convinced that Harris, the first defendant, was actively involved in the operation of the later website, brought proceedings against him and persons and companies linked to him. According to the claimants:

(i) between mid-December 2009 and the end of November 2012 Harris had been the driving force behind mass deliberate infringements of the claimants’ copyrights;  

(ii) the various corporate defendants were Harris's corporate creatures, being owned and/or controlled by him, and  

(iii) he had used those companies for the purposes of channelling to himself or for his benefit the revenues earned from those infringing activities, as well as for syphoning off funds from Newzbin and thwarting the claimants’ ability to recover costs and compensation for the infringement by Newzbin of their copyrights, the entitlement to which had been established by the earlier proceedings.

According to Harris and the other defendants:

(i) although Harris had been the sole director and owner of Newzbin from December 2009 to May 2010, he had no intention to infringe copyright and did not believe that infringing activity was occurring until the first Newzbin judgment;

(ii) Harris had had nothing to do with the setting up or running the Newzbin2 website, which had been operated by hackers who had stolen data from the Newzbin1 website in order to do so and

(iii) there had been no conspiracy between the defendants.

What's more, argued Harris, in making him a party to the proceedings, the claimants were re-litigating matters against a new defendant whom they ought to have joined in the original trial and this was an abuse of process.

Barling J allowed the film companies' claim.

(i) There was no evidence from which it could be properly concluded that there had been sufficient material available to the claimants in Newzbin 1 and Newzbin 2 to justify holding that they ought reasonably to have joined Harris as a defendant in Newzbin 1 at any stage and there was no substance in the argument that commencing these proceedings against Harris was an abuse of process.

(ii) Harris was a joint tortfeasor with Newzbin in respect of the Newzbin 1 copyright infringing operations. He also masterminded and directed all Newzbin's actions in the period in question, including those that had been found to constitute infringing conduct. If ever there was a clear case of a company director intending, procuring and sharing a common design to commit an infringement with the company, this was it. Much the same applied to Newzbin 2, where he was either the sole tortfeasor or a joint tortfeasor.

(iii) All four elements required for an "unlawful means" conspiracy had been made out. These were (i) a combination of two or more persons; (ii) to take action which was unlawful in itself; (iii) with the intention of causing damage to a third party; and (iv) damage being caused to the third party.

Barling J's judgment is 178 paragraphs long,

The final (?) installment in the Newzbin saga

© HikingArtist.com

Everyone will be aware of the courts' decisions in Newzbin and Newzbin 2. By way of short summary, Newzbin was a website which indexed and provided links to infringing films and music. In March 2010, Mr. Justice Kitchin ruled that Newzbin liable both for communicating copyright protected works to the public and for authorising copyright infringement. He held that Newzbin was deliberately indexing copyrighted content, and that "for the year ended 31 December 2009, it had a turnover in excess of £1million, a profit in excess of £360,000 and paid dividends on ordinary shares of £415,000".

Newzbin was temporarily shut down but came back as Newzbin 2. In June 2011, the Motion Picture Association applied for an injunction to force BT to cut off customers' access to Newzbin 2, which was granted by the High Court on 28 July 2011.

In September 2011, Newzbin 2 released software which aimed to circumvent the BT blocking, causing the High Court to order BT to block its customers' access to the Newzbin 2 within fourteen days. This was a first in terms of UK copyright law.

Both decisions are summarised in more detail by the IPKat here.

The latest in the saga is a decision from the High Court regarding whether a copyright owner has a proprietary claim to money derived from infringement of the copyright. Six film studios, all members of the Motion Picture Association, claimed to be the owners or exclusive licensees of the copyright in numerous films and television programmes, and argued that where copyright is infringed, the copyright owner has a proprietary claim to the whole proceeds of the infringement.

Mr Justice Newey held that the remedies for infringement of copyright are dealt with in chapter VI of part I of the CDPA. Section 96(2) states that, in an action for infringement of copyright, "all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right".

He concluded that:

"Despite Mr Spearman's persuasive advocacy, it seems to me clear that a copyright owner does not have a proprietary claim to the fruits of an infringement of copyright. I shall not, therefore, grant proprietary injunctions."

So Hollywood won't get the profits of Newzbin's piracy.

An interesting side note: ZDNet  reported that the barrister acting for Newzbin in its 2010 trial has been indefinitely struck off in January 2012 because he owned the file-sharing site. The Bar Standards Board disbarred Brighton-based David Harris for breaches of paragraphs 301(a)(iii), 302, 603(d) and 901.7 of the Code of Conduct of the Bar of England and Wales.

NewzBin2: some reflections

[2011] EWHC 1981 (Ch) ("NewzBin 2") that it is difficult to think immediately of a fresh slant for coverage on this blog.  In short, for those who may have missed it, NewzBin's rather crude attempt to keep its Usenet internet indexing website going has been smitten by an order that internet service provider BT block users from accessing NewzBin's website.  The order actually sought runs like this:

""1. The Respondent [i.e. BT] shall adopt the following technology directed to the website known as Newzbin or Newzbin2 currently accessible at www.newzbin.com and its domains and sub domains. The technology to be adopted is:
(i) IP address blocking in respect of each and every IP address from which the said website operates or is available and which is notified in writing to the Respondent by the Applicants or their agents.
(ii) DPI based blocking utilising at least summary analysis in respect of each and every URL available at the said website and its domains and sub domains and which is notified in writing to the Respondent by the Applicants or their agents.
2. For the avoidance of doubt paragraph 1(i) and (ii) is complied with if the Respondent uses the system known as Cleanfeed and does not require the Respondent to adopt DPI based blocking utilising detailed analysis.
3. Liberty to the parties to apply on notice in the event of any material change of circumstances (including, for the avoidance of doubt, in respect of the costs, consequences for the parties, and effectiveness of the implementation of the above measures as time progresses)".

A fairly lengthy account of NewzBins 1 and 2 appears on the IPKat here.

Rights-owners are predictably jubilant at their victory in what is very plainly stated to be a test case (though, curiously and perhaps for subtle strategic reasons, other ISPs which were invited to intervene in these proceedings declined to do so).  A lot of work has gone into preparing the ground for this action. Given the state of the law and the nature of the damage inflicted, the victory was deserved.  In contrast, those who are not rights are owners are equally predictably critical. While no-one appears to have a good word for NewzBin itself, there are wider issues afoot.

Among the more interesting comments is that of Andrew Orlowski, writing for The Register here:

"It's fascinating to hear arguments such as BT's contention that it is not an internet service provider, or that Newzbin2 members were passive recipients, and just happened to have anime and pirate movies pop onto their PCs ... or that after notification from a copyright-holder, an ISP could claim that it hadn't been notified. These are surreal arguments [Andrew's right, and this blogger wishes that this sort of thing would stop. It wastes the court's time, distracts us all from the core issues and does little to enhance the public's image of the legal profession].

The voluntary plan at meetings chaired by Culture Minister Ed Vaizey – one floated by publishers, music and movie industries and the Premier League – permits speedy judicial review of site-blocking on a site-by-site basis. BT was the strongest opponent in those talks – perhaps hoping for a favourable decision from Arnold.

That hasn't been forthcoming.[It surely wasn't likely to be forthcoming either, in the light of the ruling in NewzBin 1 and given that Arnold J is not known to be a fantasy judge]

Site-blocking not only runs contrary to the classic liberal spirit of English law – I have seen no exemption mooted for journalists or researchers – but it also has another consequence. It makes rights-holders look like they're keener on legislation than on creating new markets for content. Despite a smashing victory, they should be careful what they wish for ['creating new markets for content', like 'creating new business models', is becoming an increasingly hopeless cry as it becomes ever more apparent that there are no realistic and sustainable business models without enforceable copyright -- with the possible exception of micropayment schemes -- and no realistically enforceable copyright in the face of technological advance]".

Readers' comments and reflections are welcomed.