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IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION



Mr Adrian Speck (instructed by Wiggin LLP) for the Claimants Mr David Harris and Ms Jane Lambert (instructed by Kirwans Solicitors) for the Defendant Hearing dates: 1-3, 8, 10 February, 2, 3 March 2010 ____________________

Mr. Justice Kitchin :

Introduction

The defendant is the company that owns and operates Newzbin . It says that its website is simply a search engine like Google but directed to Usenet rather than the world wide web. It also says it is "content agnostic" and designed to index the entire content of Usenet. Where possible, it provides hyperlinks with the result that any supply of unlawful material is an act occurring exclusively between the hyperlink user and the relevant Usenet server operators and that the defendant plays no part in any such activity.

The Usenet system

The Newzbin site - general

Newzbin is run by Mr Chris Elsworth (known as "Caesium"), Mr Thomas Hurst (known as "Freaky") and Mr Lee Skillen (known as "Kalante") who were, until recently, the shareholders in and directors of the defendant. I mention their pseudonyms because they often appear in the various materials relating to Newzbin which were referred to during the course of the trial. Mr Elsworth and Mr Hurst gave evidence and, particularly in the case of Mr Elsworth, were subjected to an extensive and searching cross examination in the light of which substantial attacks were mounted on their credibility. I shall address these attacks in the context of the disputes to which their evidence gives rise.

Access to Newzbin is restricted to members, and the defendant accepts applications for membership only from users who have an invitation from a current member. The defendant offers two levels of membership: basic membership for which there is no fee, and premium membership for those users who agree to pay a fee of £0.30 per week, subject to discount at different times of the year. Only premium members are given the ability to download the contents of files sourced using Newzbin . Basic members are merely provided with what was described in evidence as a "sample" or "taster" of what is available to premium members. There is no doubt that the defendant has developed a very substantial business. It has a sophisticated and substantial infrastructure and in the region of 700,000 members, though not all premium. Its accounts reveal 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.

"Welcome to Newzbin .com, the most comprehensive Usenet search that exists on the Internet today.

Our service comprises of listing what is currently available on Usenet, in two forms  the Reports view, which has been condensed to show you precisely what is available; and the Files view, which shows you everything that has been posted, on all the newsgroups*, for the last 240 days."

" Newzbin indexes the contents of Usenet, however, it neither provides nor uploads any of the files that may be contained within it. Any descriptions are a result of the indexing and therefore do not relate to downloadable files."

" Newzbin is a service that is dedicated to indexing the ever-changing contents of Usenet, also known as Newsgroups. The reason we do this is to remove the hassle of crawling through the thousands of newsgroups and millions of headers to find what you're looking for, whether that be obscure music, tv shows, games or movies. Think of us as a TV guide, but we're a guide that applies to Usenet. Newzbin also offers many additional features and tools that can save you time, bandwidth and effort."

"As mentioned in the brief description, Newzbin indexes the binary side of Usenet. We are a search engine  just like Google! ."

The Newzbin site - binary content

(i) Newzbin indices

Newzbin retrieves title information about messages posted in a range of Usenet newsgroups. This title information, referred to as a "header", identifies the email address of the user who posted the message, the date and time the message was posted, the newsgroup or set of newsgroups to which the message was posted, the subject or topic of the message, a code for identifying the message and finally, the path of servers that any particular copy of the message has followed. Newzbin processes and stores this header information in three main indices: the "RAW" index, the "Condensed" index and the " Newzbin " index.

The Newzbin index is the highest level index and shows entries which have also been assigned what Newzbin calls "reports". These are created by a team of about 250 "editors" who check that the subject matter of the report relates to a complete set of Usenet messages. The Newzbin index lists the reports by the name of the film or other work in question. The editors act, in effect, as a system of quality control and ensure that all of the individual messages that comprise a copy of a film or other binary work have been identified. They also add further descriptive information such as the title and overall file size and details of other attributes such as the source, genre and language of the work. In the case of entries relating to films, the reports typically provide the user with a link to an internet address ("URL") with other available information on that work. Such URLs may link to the websites of Amazon or the comprehensive motion picture database known as IMDb. The reports often include an information or "NFO" file in which it is common for releasers of infringing copies of films or television programmes to identify themselves so as to take the credit for creating the copy in question.

Newzbin reports for binary content appear to be retained for 240 days, as stated on the Newzbin welcome screen.

(ii) NZB files

I come now to a crucial element of Newzbin . The defendant has developed a facility for premium members to create what the site identifies as "NZB" files. In the case of binary content, each NZB file contains all the information a news client requires to fetch all the Usenet messages and reassemble the original binary work from its component parts. Mr Clark described how it works in practice. Using the Newzbin index view, an NZB file can be retrieved using one of two techniques; first, by clicking the check box in the relevant entry and then clicking the "Create NZB" button at the top of the page; second, by simply clicking the "Download Report NZB" icon in the relevant entry. In either case the NZB file is created and delivered to the user's computer. Mr Clark demonstrated this by reference to a Harry Potter film. He selected the entry for "Harry Potter and the Prisoner of Azkaban (2004)" by clicking the checkbox in respect of that entry and he then clicked the "Create NZB" button. A dialog box popped up on his screen giving him the choice between saving the NZB file and opening it with a third party application. He chose to open the file using GrabIt. He then selected a further option on the dialog box which indicated that when an NZB file was accessed in the future, GrabIt would be launched automatically. He duly did access an NZB file for the same Harry Potter film and the GrabIt application started running immediately. The final output was a set of files suitable for burning to a DVD and which could be played in a typical DVD player.

(iii) Categories of content

Newzbin permits a premium member to search its indices by reference to various categories into which the Usenet messages which it has retrieved are grouped. So far as binary content is concerned, there are categories for "Anime" (animated films produced in Japan), "Apps" (application software), "Books" (both audio books and formats for displaying electronic book readers), "Consoles" (video games for dedicated games consoles), "Emulation" (video games playable on a PC using a program which allows the PC to emulate a games console), "Games" (video games playable on a PC), "Misc", "Movies", "Music", "PDA" (software or content files playable on a personal digital assistant or handheld computing device, such as a Blackberry or an iPhone), "Resources" (creative resource material such as fonts and clip art) and "TV".

When searching the Newzbin index for binary content, a member can break down a number of these categories into various sub-categories. Particular attention was focused during the trial on the "Movies" category. This is sub-categorised by "Source" (for example "CAM", "Screener", "Telesync", "R5 Retail", "Blu-Ray", "DVD" and "HD-DVD"), "Video Fmt" (for example, "DivX", "XviD", "Blu-Ray" and "HD-DVD"), "Region", "Video Genre", "Audio Fmt", "Language" and "Subtitles". Miss Sidhu, a witness for the claimants and an internal investigator employed by the Federation Against Copyright Theft Limited ("FACT"), said in unchallenged evidence that several of these source sub-categories are a strong indication of piracy. For example, CAM typically refers to the use of a handheld cam or video recorder in a cinema to record a film shown there; Screener refers to a copy of a film supplied on a restricted basis to persons within the industry, such as critics, before the film has been released commercially; Telesync refers to a copy of a film made in a cinema using professional camera equipment and a direct connection to the sound source, and sometimes with the frame capture rate of the camera synchronised with that of the film being shown; and R5 Retail refers to DVDs released in Russia before commercial release elsewhere. Ms Sidhu also explained that where the source of the indexed content is a commercially available optical disc, such as a DVD, although the source will often be legitimate, the uploading of a copy of that film from the disc to Usenet and the copying of it online will not be lawful. Further, the video formats DivX and XviD, at least, are commonly used formats associated with the piracy of audio-visual content.

(iv) Editors

"What do Editors do?

They group and name posts on Usenet

Basically, Newzbin fetches headers for every binary newsgroup (well, almost we add new ones all the time, as we find them) on Usenet. These headers are often cryptic, or at least, not very readable.

It is an Editor's task to 'decode' these headers into something a little more readable for you the Newzbin member, so that you can search and browse for what is on Usenet, quickly and easily.

Position Details

Once you're appointed as an Editor, you'll see a few new features and pages on the site. The most important is the Usenet Files view; this is very similar to what you see in a newsreader after loading headers. We pull in headers from just about every binary group on Usenet  so there's no need for you to do the same.

Armed with this information, you can condense the information into Newzbin Reports. Most people don't want to sit and sift through so much information, so it's your job to make it nicer to read. Once you've made a Newzbin Report, your information will appear on the public side of the site available to all and sundry to read; thus you directly help control what we show."

"We have a rather large team of editors at Newzbin .com (roughly 250 editors).

We report releases because we like to help other people.

New editors get premium features, plus permission to make regular reports. The more posts you make, the more permissions you will get as an editor. Senior editors have permission to edit other editors' reports, delete entire reports etc. The full list of all available permissions can be found here .

Often, finding a web page related to a post helps to determine the proper title, show missing songs for albums, and generally improve the accuracy of a report. To that end we are implementing a new rule for editors:

Reports by new editors MUST have a relevant URL on them.

While adding URLs is optional for non-new editors it's still good to include them and 'strongly encourage' for movies. There is a list of helpful links elsewhere."

"People look at our site for movies, games and apps, pretty much in that order. Why even have those other sections? Because if they were removed people would ask "Why don't you have eBooks?" If you care enough about eBooks to report them, then you won't mind doing so for minimal credit. You report those sections because you want to.

On the other hand if you report movies, then you get rewarded for it because we want you to report them more then eBooks. Ebooks are usually a case of one file = one post. Its pointless copying the filename from the subject and putting it in the post title and making a report of it. If people want to search for eBooks, they can switch to files mode and search there. You're benefiting the entire community a LOT more by making movie posts and decoding the cryptic filenames people come up with."

"Consistent and well formatted titles are very important to the quality of the site. Below are some rules which apply to all reports unless specified in another title formatting guide.

When appending completeness or information tags to report titles use:

CD for Compact Disc

DVD for Digital Versatile Disc

BD for Blu-Ray Disc

HD for High Definition Digital Versatile Disc (HDVD)

[]  Use square brackets to add information about the status/completeness of a report.

()  Use parentheses to add information about the content contained in the report.

YYYY-MM-DD  standard date format inside () or not

[] comes after ()

If you are unsure how to create a proper title, either ask in #edcentral or search for a similar reports and follow suit.

For movie titles, use the main imdb title including year, but move 'The' or 'Le' to the front. Do not include /I or the quotes that mean made for tv movie. Do not add aka titles

For movie titles with additional info the format should be; Title (YEAR) (Additional Info)"

Newzbin also contains a long section containing lists of films under the heading "The Superset: Shows You Are Likely To See Posted"  and these are clearly commercial releases which are very likely to be protected by copyright.

" When acting as editor you may not do any act which would assist enable incite or encourage any unlawful acts by any other person. Specific but not exhaustive examples of such acts would be the creation of or editing of NZB or NFO files or hyper-links relating to 'warez', unlicensed movies or music, child pornography or other unlawful obscenity, terrorist or unlawful drugs materials. These are not definitive examples and any unlawful act is prohibited. You should be aware that we may be required by law to assist copyright owners or the authorities in tracing Editors who undertake such acts."

(v) Item removal and restriction on use

Newzbin contains a "Delisting" facility. In order to get an item delisted, members are directed to a link which takes them to a web page which instructs them that details of the item sought to be removed must be sent by registered post to a specified address. The page informs members that the defendant aims to process all such requests within 48 hours of their receipt. For like reasons, I am again satisfied that this cumbersome procedure is entirely cosmetic and designed to render it impractical for rights holders to secure the removal of entries relating to infringing material from the Newzbin indices. This was graphically illustrated by Mr Elsworth's explanation in cross examination as to the lengths the claimants would have to go to in order to get all of the (perhaps many hundred) copies of a particular Harry Potter film removed. He said the claimants would have to download each such copy and prove it was infringing and send an appropriate notice in accordance with the delisting instruction.

"You may only use the Site for lawful purposes. In particular you may not use the Site to transmit defamatory, offensive or abusive material or material of an obscene or menacing character, or which promotes hatred, violence or illegal conduct, or in breach of copyright or any other intellectual property rights, or in breach of the Computer Misuse Act 1990 or other relevant legislation or the rights of another User."

(vi) Newzbin binary content analysis

The Newzbin site - non-binary (or text) content

Newzbin therefore has very little utility in relation to text messages. In this respect it is a very rudimentary and crude system. Specifically, it does not permit members to search the content of Usenet text postings for key words or phrases as Google does. Indeed, it seems to me to provide little or nothing that cannot be obtained by accessing the relevant newsgroup directly.

Mr Clark also considered the operation of Newzbin with the benefit of software provided by the defendant. He concluded, in my judgment entirely fairly, that binary content and text content are dealt with by Newzbin in different ways and by separate parts of the code. As I elaborate in the next section of this judgment, the part of the code dealing with binary content takes care to search only binary newsgroups. It is designed to filter out any articles posted to those binary newsgroups which might nonetheless be text. By contrast, the part of the code dealing with text content searches all active newsgroups and then filters out any articles that appear not to be text. As a result, large numbers of Discussion Digests and reports are produced. Interestingly, no Discussion Digests are listed on the site prior to 3 January 2010. There is nothing remotely near 240 days old.

The defendant's stated objectives in developing the Newzbin site

The clear impression conveyed by this evidence was that Newzbin treats all content in the same way and so is, in the words of the re-amended defence, content agnostic; that Newzbin retrieves information using the crawler bot; and that the crawler bot looks at all available newsgroups. However, as I have explained, the truth is very different. Mr Clark has established that in fact Newzbin treats binary and text content in quite different ways and does so by using separate parts of the code. As for binary content, the code responsible for collecting new information from Usenet servers and processing it into a form suitable for displaying it to members looks only at binary newsgroups and conducts a series of tests designed to filter out text messages. By contrast, the part of the code dealing with text content searches all active newsgroups and then filters out any messages that appear not to be text.

Mr Hurst also gave evidence that Newzbin is content agnostic and mainly used to locate text discussions and that he has spent a considerable period of time developing Newzbin 's indexing software in relation to discussion groups. However, in cross examination it emerged that by content agnostic Mr Hurst meant no more than that Newzbin looks at all content and not that it treats all content in the same way. He explained that he wrote a script in January 2010, similar to earlier scripts, which enabled him to download automatically the messages in a digest for a newsgroup he had already identified. Curiously the script was written on the same day as his witness statement, strongly suggesting it was motivated by a desire to illustrate that the text functionality of Newzbin has some utility, although he maintained it was coincidental. The value of his evidence was in any event undermined by his acceptance in cross examination that he had done it "for fun". I am satisfied that Mr Hurst's evidence provides no support whatsoever for any suggestion that the text functionality of Newzbin is of any interest or utility to members. Further and in any event, Mr Hurst's evidence was entirely peripheral to the claims in this action. It had nothing to do with the binary functionality of Newzbin .

Newzbin activity

"The digest system is still under quite heavy development so we don't want to show potentially broken or incomplete results to a user base that are accustomed to a complete and accurate index."

Knowledge of infringement

In a series of posts in February 2006, members address a concern as to whether Newzbin records the NZBs that members have downloaded and whether the Motion Picture Association of America or its European equivalent, the Motion Picture Association (often referred to as the MPAA and MPA respectively), could use such data to track members down. Mr Elsworth was constrained to accept that these concerns "could be" related to copyright infringement.

"Q. What do you imagine is intended to go in those categories?

A. I would fully imagine that it's video data that's come from a Blu Ray disc or an HD DVD media.

Q. Namely the movies that they've already started releasing that are mentioned there, yes?

A. That does appear to be what he means, yes.

Q. So what this person has in mind for "we", because he's editor, what he has in mind is having categories for doing something which would be copyright infringement, doesn't he?

A. From that specific post, it looks like he may have that in mind. I would add any attribute upon asked to from any editor.

Q. Well, in fact you have added these categories, haven't you?

A. Yes, I think I did.

Q. And in fact you know that's what's intended to go in there are movies that are released on those formats, don't you?

A. After reading this post, I do see that he looks like he is intending to put commercial movies in those formats.

Q. You've always intended that, haven't you?

A. No, I generate the attributes on -- whenever the editors ask for them. I don't know what they're going to put in them.

Q. Is that your evidence? So when you add Blu Ray and HD DVD, you've got no idea -- you had no idea that movies were being released on them and that that was what the categories were intended for, is that your evidence?

A. It's not a given that a Blu Ray media disc will contain a copyright movie. There are plenty, I'm sure, of copyright-free Blu Rays that people would want to put in there.

"Q. Yes. And you need a category for Blu Ray, or we need a category for Blu Ray, because Blu Ray has been cracked so now people will be copying movies off of Blu Ray so you need to deal with those. That's what this post means, doesn't it?

A. That does look like what that post means, yes.

Q. So that person has copyright infringement in mind?

A. No, I would not say that person had copyright infringement in mind. I would say that person looks like he just wants to report Blu Rays. He cites a reason for adding the Blu Ray category as they are being cracked but he does not cite a specific intention to report copyrighted Blu Rays.

Q. Well, what else would it be?

A. I don't know.

Q. Why would it be Blu Rays that would need cracking?

A. I don't know.

Q. You can't come up with any explanation other than a copyright-protected commercial movie, can you?

A. No."

"Q. He wants to be able to find them to download them?

A. He doesn't cite that as a reason.

MR JUSTICE KITCHIN: Can I understand, in his first sentence he says: "I have a bunch of saved searches (mainly TVshows)." What does that mean?

A. A saved search is a Newzbin feature where, once you search for something once, you can then save it so that it appears in a list and then you can re-execute the same search without having to type in the name again and all the parameters, so it simplifies searches that you may do very often.

MR JUSTICE KITCHIN: So if he has saved searches for mainly TV shows, what would he be doing with them?

A. I don't know. This suggests that he's searching for the TV shows quite often, but it doesn't suggest what he does with them.

MR JUSTICE KITCHIN: It wouldn't suggest to you that he wants to watch them?

A. It may suggest that but it doesn't actually say that he's going to do that.

MR JUSTICE KITCHIN: What would you understand it to mean?

A. If I were to read this, I would understand it to mean that he wants to know what's on Usenet regarding TV shows, probably on a regular basis.

MR JUSTICE KITCHIN: Why?

A. (Pause). May I read the second page of this post?

MR JUSTICE KITCHIN: Of course, yes.

MR SPECK: You see it's you responding and helping him.

A. This user does seem to be setting up a saved search so that he can find an NZB for whatever he's saved the search for on a weekly basis and then probably retrieve the NZB for the things which are popping up in his search on possibly a weekly or monthly basis.

Q. So if he, for instance, is a Dr Who fan 

A. Are we on the next page?

Q. I'm just giving you an example. If he is a Dr Who fan, and he wants to search for that every week so he can get it when it's appeared on the television and somebody has copied it and put it on Usenet, he can do the same search every Sunday morning, or whatever it might be that's what this is about, that kind of thing?

A. This doesn't specifically say it's about Dr Who, but as an example that is possible. He could do that, yes.

Q. Of course, it doesn't say "Dr Who" but whatever may be his favourite shows, that's what he's up to, yes?

A. Yes.

Q. And you're helping him, yes, in your replies?

A. We provide the features to make a search as simple as possible.

Q. Indeed, you're giving him assistance knowing that what he's going to do is what we've just discussed?

A. No, I don't know he's going to download these copyrighted TV shows.

Q. You've just agreed that it looks like that's what he's up to reading his post

A. Reading his post, yes.

Q. You read his post and you replied over the page, giving him some help.

A. Yes, I enhance the search service so that you can select a saved search quickly, more quickly than you could do before.

"Q. So what this person is envisaging is searching under a movie star?

A. He's envisioning searching on anybody who may be in a video file, yes.

Q. Well, a movie star; who stars in it, "who stars in the movie".

A. That's the wording he uses, yes.

Q. He's talking about searching for a movie star?

A. That's not necessarily true.

Q. What else does it mean?

A. You can star in a home video.

Q. An NFO file contains who stars in the movie. Are you suggesting that what he might have in mind is some unknown ten year old, say, starring in the movie which has been filmed on a camcorder by their parents?

A. I'm suggesting that "movie" is a very broad definition of a video, and "starring" and you can star in any sort of video, not just a commercially released video.

Q. Of course, what we're envisaging here is people who are third parties to the video or the movie searching for it. So the unknown person who is starring in a movie, they are not going to be known, so you won't know the name to search for, will you?

A. It depends if you are a friend or family of the star of the home video.

Q. They'll give it to you then; you won't be searching on Newzbin for it, will you?

A. Perhaps.

Q. It's quite plain that what this person has in mind is a facility which will enable him, because he has favourite movie stars, to acquire movies in that way, using your site, is it not?

A. I don't agree with that, no."

"Q. This is somebody making something for downloading your favourite episodes from Newzbin easier?

A. Right.

Q. Do you see that?

A. Yes.

Q. First of all, this person considers that what they're doing is downloading from Newzbin , yes?

A. He does appear to be under that misconception, yes.

Q. I understand that technically we can get into the nitty gritty of where it's stored and how it occurs, but so far as the user is concerned he's going to Newzbin and downloading his favourite TV episodes from Newzbin , yes?

A. He does seem to think that, yes.

Q. And there's no doubt that what's envisaged here is unlawful.

A. There's no evidence to suggest what he's downloading apart from episodes. There's no evidence to suggest what those might be.

Q. Which episodes are unlikely to be copyright protection?

A. I don't know. I couldn't think of any off hand."

"I've said multiple times that we would require a court order to hand over any information we hold.

As to what we record:

Your username & your email address, obviously.

One month of logs which comprises:

- IP you used the site from (so we can ban people who are hammering the site, DoSing etc)

- When you logged in and logged out (for tracking abusive site users, this includes login errors)

- Card payments [how much you bought, when, and the transaction status, failures etc  NOT the card number, that'd be illegal as we're not qualified to store this information]

- When you change a preference, so when a user says "I can't see anything!" we can go find out what he changed which broke it, and change it back for him.

- When you download an NZB, we increment a counter which is displayed in some of your stats. The identification of the NZB is not recorded.

We are considering lowering the log storage time to 7 days.

We may also move the logs off the Newzbin servers, onto completely unrelated servers in another completely unrelated part of the Internet, and then log via SSL to them. (thus, no logs can be taken without our consent  but I judge the odds of server seizure to be negligible, as it'd be jumped on by our lawyer with complete glee)."

The defendant has also been given notice by the claimants that Newzbin has been and is being used by members to infringe the claimants' copyrights in their films, yet copies of those films remain available on Newzbin and no action has been taken against the editors responsible for making the reports relating to them or against the members who have downloaded the infringing copies. In a letter before action dated 21 May 2008, the defendant was notified that Newzbin was being used to infringe the copyrights of members of the MPA. The letter enclosed a list of the claimants' films. Thereafter these proceedings were issued and the particulars of claim dated 25 November 2008 identified the six particular films referred to in paragraph [80] of this judgment and which FACT had downloaded using Newzbin . Mr Jenkins explained in a witness statement dated 17 August 2009 that he was responsible for downloading those copies in July and August 2008 and that he was at that time an investigator employed by FACT. This statement was served on the defendant on 8 September 2009. Ms Sidhu, to whom I have referred earlier in this judgment, related in her first witness statement dated 3 September 2009, which statement was also served on the defendant on 8 September 2009, how she downloaded further copies of each of those six films in May 2009. In a second witness statement dated 8 January 2010 and served on the defendant on 8 January 2010, Ms Sidhu explained that copies of five of those six films were still available on Newzbin in December 2009. At trial both Ms Sidhu and Mr Jenkins confirmed in the course of their evidence that the contents of their statements were true and that evidence was not challenged.

Feasibility of filtering Newzbin content

Subsistence of and title to copyright

i) first claimant: "27 Dresses"; ii) second claimant: "Atonement"; iii) third claimant: "300"; iv) fourth claimant: "Cloverfield"; v) fifth claimant: "National Treasure: Book of Secrets"; vi) sixth claimant: "Spiderman 3".

The claims

i) authorising acts of infringement by its members; ii) procuring, encouraging and entering into a common design with its members to infringe; iii) communicating the claimants' copyright works to the public, namely the defendant's members.

Authorisation

"Now features "high-speed dubbing" enabling you to make duplicate recordings from one cassette to another, record direct from any source and then make a copy and you can even make a copy of your favourite cassette."

"The recording and playback of certain material may only be possible by permission. Please refer to the Copyright Act 1956, the Performers Protection Acts 1958-1972."

"In Monckton v. Pathe Freres Pathephone Ltd. [1914] 1 K.B. 395, Buckley L.J. said, at p. 403: "The seller of a record authorises, I conceive, the use of the record, and such use will be a performance of the musical work." In that case a performance of the musical work by the use of the record was bound to be an infringing use and the record was sold for that purpose. In Evans v. Hulton (1924) 131 L.T. 534, 535, Tomlin J. said that:

"where a man sold the rights in relation to a manuscript to another with a view to its production, and it was in fact produced, both the English language and common sense required him to hold that this man had 'authorised' the printing and publication."

The object of the sale, namely publication, was bound to infringe. In Falcon v. Famous Players Film Co. [1926] 2 K.B. 474, the defendants hired to a cinema a film based on the plaintiff's play. It was held that the defendants infringed the plaintiff's exclusive right conferred by the Copyright Act 1911 to authorise a performance of the play. Here again, the hirer sold the use which was only capable of being an infringing use. Bankes L.J., at p. 491, following Monckton v. Pathe Freres Pathephone Ltd. and Evans v. Hulton, accepted that for the purpose of the Act of 1911 the expression "authorise" meant "sanction, approve, and countenance." Atkin L.J. said, at p. 499:

"to 'authorise' means to grant or purport to grant to a third person the right to do the act complained of, whether the intention is that the grantee shall do the act on his own account, or only on account of the grantor; . . ."

In the present case, Amstrad did not sanction, approve or countenance an infringing use of their model and I respectfully agree with Atkin L.J. and with Lawton L.J. in the present case [1986] F.5.R. 159, 207 that in the context of the Copyright Act 1956 an authorisation means a grant or purported grant, which may be express or implied, of the right to do the act complained of. Amstrad conferred on the purchaser the power to copy but did not grant or purport to grant the right to copy.

In Moorhouse v. University of New South Wales [1976] R.P.C. 151 in the High Court of Australia where the facilities of a library included a photocopying machine, Gibbs J. said, at p. 159:

"a person who has under his control the means by which an infringement of copyright may be committed - such as a photocopying machine - and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorise any infringement that resulted from its use."

Whatever may be said about this proposition, Amstrad have no control over the use of their models once they are sold. In this country the duties of some libraries are defined by the Copyright (Libraries) Regulations 1957 (S.I. 1957 No. 868) made under section 15 of the Act of 1956.

In C.B.S. Inc. v. Ames Records & Tapes Ltd. [1982] Ch. 91, Whitford J. held that a record library which lent out records and simultaneously offered blank tapes for sale at a discount did not authorise the infringement of copyright in the records. He said, at p. 106 :

"Any ordinary person would, I think, assume that an authorisation can only come from somebody having or purporting to have authority and that an act is not authorised by somebody who merely enables or possibly assists or even encourages another to do that act, but does not purport to have any authority which he can grant to justify the doing of the act."

This precisely describes Amstrad.

In RCA Corporation v. John Fairfax & Sons Ltd. [1982] R.P.C. 91 in the High Court of Australia, Kearney J., at p. 100, approved a passage in Laddie, Prescott & Vitoria, The Modern Law of Copyright (1980), para. 12.9, p. 403, in these terms:

"a person may be said to authorise another to commit an infringement if the one has some form of control over the other at the time of infringement or, if he has no such control, is responsible for placing in the other's hands materials which by their nature are almost inevitably to be used for the purpose of infringement."

This proposition seems to me to be stated much too widely.

As Whitford J. pointed out in the Ames case, at p. 107:

"you can home tape from bought records, borrowed records, borrowed from friends or public libraries, from the playing of records over the radio, and indeed, at no expense, from records which can be obtained for trial periods on introductory offers from many record clubs who advertise in the papers, who are prepared to let you have up to three or four records for a limited period of trial, free of any charge whatsoever."

These borrowed records together with all recording machines and blank tapes could be said to be "materials which by their nature are almost inevitably to be used for the purpose of an infringement." But lenders and sellers do not authorise infringing use.

For these reasons, which are to be found also in the judgments of the Court of Appeal, at pp. 207, 210 and 217, I am satisfied that Amstrad did not authorise infringement."

" . the matters that must be taken into account include the following:

(a) the extent (if any) of the person's power to prevent the doing of the act concerned;

(b) the nature of any relationship existing between the person and the person who did the act concerned;

(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice."

This brings me to a number of aspects of Newzbin which I consider to be of particular importance. In relation to binary content, Newzbin provides premium members with a facility which extends considerably beyond indexing and categorisation. It identifies all (or in the case of the RAW index, many) of the, perhaps several thousand, messages which make up a particular binary work and, in so doing, saves those members the very substantial task of manually locating and identifying each of them separately. Moreover, the reports in the Newzbin index provide a considerable body of very useful information in relation to each title. They include descriptive information, the URL and an NFO file which identifies the individual user who posted the content to Usenet, the email address of that user, information from which the date on which the content was posted to Usenet can be deduced and the number of files making up the particular work.

Procurement and participation in a common design

"My Lords, joint infringers are two or more persons who act in concert with one another pursuant to a common design in the infringement. In the present case there was no common design, Amstrad sold a machine and the purchaser or the operator of the machine decided the purpose for which the machine should from time to time be used. The machine was capable of being used for lawful or unlawful purposes. All recording machines and many other machines are capable of being used for unlawful purposes but manufacturers and retailers are not joint infringers if purchasers choose to break the law. Since Amstrad did not make or authorise other persons to make a record embodying a recording in which copyright subsisted, Amstrad did not entrench upon the exclusive rights granted by the Act of 1956 to copyright owners and Amstrad were not in breach of the duties imposed by the Act."

"My Lords, I accept that a defendant who procures a breach of copyright is liable jointly and severally with the infringer for the damages suffered by the plaintiff as a result of the infringement. The defendant is a joint infringer; he intends and procures and shares a common design that infringement shall take place. A defendant may procure an infringement by inducement, incitement or persuasion. But in the present case Amstrad do not procure infringement by offering for sale a machine which may be used for lawful or unlawful copying and they do not procure infringement by advertising the attractions of their machine to any purchaser who may decide to copy unlawfully. Amstrad are not concerned to procure and cannot procure unlawful copying. The purchaser will not make unlawful copies because he has been induced or incited or persuaded to do so by Amstrad. The purchaser will make unlawful copies for his own use because he chooses to do so. Amstrad's advertisements may persuade the purchaser to buy an Amstrad machine but will not influence the purchaser's later decision to infringe copyright. Buckley L.J. observed in Belegging-en Exploitatiemaatschappij Lavender B.V. v. Witten Industrial Diamonds Ltd. , at p.65, that "facilitating the doing of an act is obviously different from procuring the doing of an act." Sales and advertisements to the public generally of a machine which may be used for lawful or unlawful purposes, including infringement of copyright, cannot be said to "procure" all breaches of copyright thereafter by members of the public who use the machine. Generally speaking, inducement, incitement or persuasion to infringe must be by a defendant to an individual infringer and must indentifiably procure a particular infringement in order to make the defendant liable as a joint infringer."

"I use the words 'common design' because they are readily to hand, but there are other expressions in the cases, such as 'concerted action' or 'agreed on common action' which will serve just as well. The words are not to be construed as if they formed part of a statute. They all convey the same idea. This idea does not, as it seems to me, call for any finding that the secondary party has explicitly mapped out a plan with the primary offender. Their tacit agreement will be sufficient. Nor, as it seems to me, is there any need for a common design to infringe. It is enough if the parties combine to secure the doing of acts which in the event prove to be infringements."

"Mere assistance, even knowing assistance, does not suffice to make the 'secondary' party liable as a joint tortfeasor with the primary party. What he does must go further. He must have conspired with the primary party or procured or induced his commission of the tort ; or he must have joined in the common design pursuant to which the tort was committed "

"The underlying concept for joint tortfeasance must be that the joint tortfeasor has been so involved in the commission of the tort as to make himself liable for the tort. Unless he has made the infringing act his own, he has not himself committed the tort. That notion seems to us what underlies all the decisions to which we were referred. If there is a common design or concerted action or otherwise a combination to secure the doing of the infringing acts, then each of the combiners has made the act his own and will be liable. Like the judge, we do not think that what was done by Meneghetti was sufficient. It was merely acting as a supplier of goods to a purchaser which was free to do what it wanted with the goods. Meneghetti did not thereby make MFI's infringing acts its own."

All of these cases were referred to in the recent decision of Arnold J in L'Oréal v eBay [2009] EWHC 1094, [2009] RPC 21. In this action L'Oréal advanced a number of claims arising from the sale through the eBay online marketplace of goods bearing L'Oréal's trade marks. One of the issues which arose was whether eBay was liable for trade mark infringement as a joint tortfeasor with the sellers of such goods. Arnold J rejected this claim on the facts, essentially because eBay was under no legal duty to prevent infringement and facilitation of infringement with knowledge and an intention to profit was not enough to render it liable.

Infringement by communication to the public

"20. Infringement by communication to the public

"(1) The communication to the public of the work is an act restricted by the copyright in-

(a) a literary, dramatic, musical or artistic work,

(b) a sound recording or film, and

(c) a broadcast.

(2) References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include

(a) the broadcasting of the work;

(b) the making available to the public of the work 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."

"1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.

2. Member States shall provide for the exclusive right to authorise or prohibit the making available to the public, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them:

(a) for performers, of fixations of their performances;

(b) for phonogram producers, of their phonograms;

(c) for the producers of the first fixations of films, of the original and copies of their films;

(d) for broadcasting organisations, of fixations of their broadcasts, whether these broadcasts are transmitted by wire or over the air, including by cable or satellite.

3. The rights referred to in paragraphs 1 and 2 shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article."

"(9) Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers, culture, industry and the public at large. Intellectual property has therefore been recognised as an integral part of property.

(10) If authors or performers are to continue their creative and artistic work, they have to receive an appropriate reward for the use of their work, as must producers in order to be able to finance this work. The investment required to produce products such as phonograms, films or multimedia products, and services such as 'on-demand' services, is considerable. Adequate legal protection of intellectual property rights is necessary in order to guarantee the availability of such a reward and provide the opportunity for satisfactory returns on this investment."

"(23) This Directive should harmonise further the author's right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts.

(24) The right to make available to the public subject-matter referred to in Article 3(2) should be understood as covering all acts of making available such subject-matter to members of the public not present at the place where the act of making available originates, and as not covering any other acts."

The scope of Article 3 of the Directive 2001/29/EC was considered by the European Court of Justice (the "ECJ") in Case C-306/05 Sociedad General de Autores v Editores de España (SGAE) v Rafael Hoteles SA [2006] ECR I-11519. SGAE, the body responsible for the management of intellectual property rights in Spain, complained that the installation and use of television sets in the Rafael hotel involved the communication to the public of works falling within the repertoire which it managed. On appeal, the Audienca Provincial (Provincial Court) of Barcelona referred to the ECJ a series of questions, one of which asked, essentially, whether the transmission of a broadcast signal through television sets to customers in hotel rooms constitutes communication to the public within the meaning of Article 3(1); another asked, essentially, whether the mere installation of television sets in hotel rooms constituted such an act. In considering these questions, the ECJ reiterated at [36] that communication to the public must be interpreted broadly:

"36. It follows from the 23rd recital in the preamble to Directive 2001/29 that "communication to the public" must be interpreted broadly. Such an interpretation is moreover essential to achieve the principal objective of that Directive, which, as can be seen from its ninth and tenth recitals, is to establish a high level of protection of, inter alios, authors, allowing them to obtain an appropriate reward for the use of their works, in particular on the occasion of communication to the public."

"40 It should also be pointed out that a communication made in circumstances such as those in the main proceedings constitutes, according to Art.11bis(1)(ii) of the Berne Convention, a communication made by a broadcasting organisation other than the original one. Thus, such a transmission is made to a public different from the public at which the original act of communication of the work is directed, that is, to a new public."

"42. The clientele of a hotel forms such a new public. The transmission of the broadcast work to that clientele using television sets is not just a technical means to ensure or improve reception of the original broadcast in the catchment area. On the contrary, the hotel is the organisation which intervenes, in full knowledge of the consequences of its action, to give access to the protected work to its customers. In the absence of that intervention, its customers, although physically within that area, would not, in principle, be able to enjoy the broadcast work.

43. It follows from Art.3(1) of Directive 2001/29 and Art.8 of the WIPO Copyright Treaty that for there to be communication to the public it is sufficient that the work is made available to the public in such a way that the persons forming that public may access it. Therefore, it is not decisive, contrary to the submissions of Rafael and Ireland, that customers who have not switched on the television have not actually had access to the works.

44. Moreover, it is apparent from the documents submitted to the court that the action by the hotel by which it gives access to the broadcast work to its customers must be considered an additional service performed with the aim of obtaining some benefit. It cannot be seriously disputed that the provision of that service has an influence on the hotel's standing and, therefore, on the price of rooms. Therefore, even taking the view, as does the Commission of the European Communities, that the pursuit of profit is not a necessary condition for the existence of a communication to the public, it is in any event established that the communication is of a profit-making nature in circumstances such as those in the main proceedings."

"46 While the mere provision of physical facilities, usually involving, besides the hotel, companies specialising in the sale or hire of television sets, does not constitute, as such, a communication within the meaning of Directive 2001/29, the installation of such facilities may nevertheless make public access to broadcast works technically possible. Therefore, if, by means of television sets thus installed, the hotel distributes the signal to customers staying in its rooms, then communication to the public takes place, irrespective of the technique used to transmit the signal."

Conclusion on liability

Flagrancy

Scope of the injunction in respect of infringement

It is the defendant's intention to make available through Newzbin all films posted on Usenet, so inevitably including the copyright films in the claimants' repertoire both now and in the future. This plainly constitutes a general threat to infringe the claimants' present and future copyrights. I also have in mind Mr Clark's unchallenged evidence that it would be a straightforward exercise for the defendant to filter the content of Newzbin by reference to a database provided by the claimants. In these circumstances I have come to the conclusion that it would be appropriate to grant an injunction by reference to the claimants' repertoire, and that such an injunction is necessary to provide the claimants with effective relief. I will consider the precise terms of the injunction including any suitable and necessary safeguards in the light of further argument.

Injunctions against service providers

"97A Injunctions against service providers

(1) The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.

(2) In determining whether a service provider has actual knowledge for the purpose of this section, a court shall take into account all matters which appear to it in the particular circumstances to be relevant and, amongst other things, shall have regard to 

(a) whether a service provider has received a notice through a means of contact made available in accordance with regulation 6(1)(c) of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2001/2013); and

(b) the extent to which any notice includes-

(i) the full name and address of the sender of the notice;

(ii) details of the infringement in question.

(3) In this section "service provider" has the meaning given to it by regulation 2 of the Electronic Commerce (EC Directive) Regulations 2002."

"Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right."

"In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carries a third party's infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under Article 5. The conditions and modalities relating to such injunctions should be left to the national law of the Member States."