A fable for modern times: the Fox and the Newzbin

Hot off the press this morning is a seminal judgment of Mr Justice Kitchin, of the Chancery Division of the High Court for England and Wales, in Twentieth Century Fox Film Corporation and others v Newzbin Ltd [2010] EWHC 608 (Ch).

Fox and other film makers and distributors sued Newzbin, which ran an internet discussion system called Usenet, for copyright infringement, alleging that Newzbin is focused on piracy in that it locates and categorises unlawful copies of films and then (i) displays the titles of these copies in its indices, (ii) provides a facility for its users to search for particular unlawful copies, (iii) displays their search results and (iv) provides a simple one-click mechanism for users to acquire the unlawful copies of their choice. The defendant company, which owned and ran Newzbin, says its website is simply a search engine like Google -- but that it was directed to Usenet rather than to the worldwide web. It also said it is "content agnostic", being designed to index the entire content of Usenet. Where possible, it provided hyperlinks so that any supply of unlawful material is an act occurring exclusively between the hyperlink user and the relevant Usenet server operators -- but that it played no part in any such activity.

In a long and carefully-expressed judgment in which he explains how Usenet and Newzbin work and what Newzbin actually does, Kitchin J concluded from the evidence that Newzbin clearly knew that its facility was used mainly by its members for the unauthorised downloading of infringing copies of the claimants' films. He then turned to Fox's action, which was based on the following:

(i) authorising acts of infringement by Newzbin's 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;
(iv) categorisation of Newzbin as a service provider with actual knowledge of other persons using its service to infringe copyright, in respect of which the claimants seek an injunction under section 97A of the Copyright, Designs and Patents Act 1988.

As to "authorisation", Kitchin J reviewed and analysed the law relating to that word as it affected copyright infringement, with particular regard to the narrow, literal interpretation placed upon it by the House of Lords in C.B.S. Songs Ltd and others v Amstrad Consumer Electronics Plc [1988] 1 A.C. 1013, when the sale of tape-to-tape recording machines was not regarded as "authorising" infringement of the music copied by them since the company that made and sold the machines had not acted as though it had an entitlement to permit infringing acts by those machines' users. At paragraph 90 he summarises the position:

"... "authorise" means the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement. The grant or purported grant to do the relevant act may be express or implied from all the relevant circumstances. 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".

Applying this to the facts, he held Newzbin liable:

" ... I am entirely satisfied that a reasonable member would deduce from the defendant's activities that it purports to possess the authority to grant any required permission to copy any film that a member may choose from the Movies category on Newzbin and that the defendant has sanctioned, approved and countenanced the copying of the claimants' films ...".

As for "procuring, encouraging and entering into a common design" to infringe, the judge drew again on C.B.S. v Amstrad and the stiff test which had to be satisfied if liability were to be found:

"... mere (or even knowing) assistance or facilitation of the primary infringement is not enough. The joint tortfeasor must have so involved himself in the tort as to make it his own. This will be the case if he has induced, incited or persuaded the primary infringer to engage in the infringing act or if there is a common design or concerted action or agreement on a common action to secure the doing of the infringing act" (para.108).

Even so, there was ample evidence from which to conclude that Newzbin had so involved itself.

On the question of whether Newzbin had communicated the claimants' Films to the public, Kitchin J found guidance in a European Court of Justice ruling in rather a different context, Case C-306/05 Sociedad General de Autores v Editores de España (SGAE) v Rafael Hoteles SA. In that preliminary ruling on a reference from Spain, the Court had said:

"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".

On this basis, since Newzbin's premium members indeed downloaded the claimants' films from a place and at a time individually chosen by them, and since its members consider Newzbin to be making the films available to them, liability was established. An enquiry into damages, including additional damages for flagrant infringement was ordered. Injunctive relief would however be less dramatic:

"In my judgment the scope of any injunction under section 97A(2) should extend no further than that to which I have already concluded the claimants are entitled, namely an injunction to restrain the defendant from infringing the claimants' copyrights in relation to their repertoire of films" (para. 135).

The IPKat thinks that this is a good example of a copyright owner taking its time, getting its evidence together, marshalling its legal arguments in order to get maximum benefit from the litigation process.

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