Paramount Home Entertainment & Anor v British Sky Broadcasting & Ors [2014] EWHC 937 (Ch)

[2014] EWHC 937 (Ch)Case No HC13D05470
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Rolls Building, Fetter LaneDate 18 th February 2014
London
EC4A 1NL
Before
THE HONOURABLE MR. JUSTICE HENDERSON__________________
Between
PARAMOUNT HOME ENTERTAINMENTApplicantINTERNATIONAL LIMITED & OTHERSApplicantBRITISH SKY BROADCASTINGRespondentLIMITED & OTHERSRespondent_________________(Transcribed from the Official Tape Recording by Cater Walsh Transcription Ltd.,1 st Floor, Paddington House, New Road, Kidderminster. DY10 1AL.Tel: 01562 60921. Fax: 01562 743235.Official Court Reporters and Tape Transcribers.)info@caterwalsh.co.uk_________________MR RICHARD SPEARMAN, QC (instructed by Wiggin LLP) appeared for Applicants._________________J U D G M E N T
[1]MR. JUSTICE HENDERSON: The online infringement of copyright in films and television programmes is a major problem for the audio digital industry, both in the United Kingdom and elsewhere in the world. The total loss that falls to the industry as a result of these activities is estimated to amount to several hundred million pounds.[2]The present application is the latest in what is now a fairly long line of cases seeking website blocking orders under section 97A of the Copyright, Design and Patents Act 1988 (the "Act"). The Claimants (who are the Applicants in this application) are major film studios suing in a representative capacity on behalf of companies in their respective groups. The Defendants (who are the Respondents in this application) are the six main Internet service providers in the UK.[3]The targets of the application are four websites currently located at viooz.co (the "Viooz website"); megashare.info (the "Megashare website"); www.1.zmovie.tw (the "zMovie website"); and watch32.com (the "Watch32 website"). I will refer to them together as the "Target Websites”.[4]As with most of the recent applications in the line of cases to which I have referred, this application is not opposed by the Defendants. The terms of the orders which the Court is asked to make have been agreed, subject to the Court being satisfied that it is appropriate to grant the relief sought.[5]Section 97A(1) of the Act provides that the High Court "shall have the 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”. Section 97A(2) then states that “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”, including certain matters which are then specified.[6]The background to section 97A is that it was inserted into the Act by the Copyright and Related Rights Regulations 2003 (SI 2003/2498) for the purpose of transposing into domestic law Article 8(3) of the European Parliament and Council Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (the "Information Society Directive"). Recitals 58 and 59 of the Information Society Directive make it clear, among other things, that Member States should provide for effective sanctions and remedies for infringements of the rights set out in the Directive, and that the sanctions for infringement should be effective, proportionate and dissuasive and should include the possibility of seeking damages and/or injunctive relief.[7]The recitals also make it clear that, in the digital environment, the services of intermediaries may increasingly be used by third parties for infringing activities, and for that reason, such intermediaries are often best placed to bring such infringing activities to an end. It was, therefore, envisaged that rightholders should have the possibility of applying for an injunction against intermediaries where such services are being used by a third party to infringe a copyright or related right.[8]A particular reason why section 97A needed to be enacted in order to give effect to Article 8(3) is that under English law an injunction cannot normally be granted against a person against whom no substantive cause of action exists. Authority to do so, therefore, was specifically provided in section 97A.[9]I am told that the section was not in fact used in this country until 2011 when Arnold J dealt with the original application against BT, first in Twentieth Century Fox Film Corpn v BT [2011] RPC 28 where he determined whether an order should be made against BT, and secondly in Twentieth Century Fox Film Corpn v BT [2011] EWHC 2714 (Ch) where he dealt with matters relating to the form of relief to be granted.[10]That jurisprudence has been developed and applied by Arnold J in a number of later cases, of which the most recent is Paramount Home Entertainment International Ltd & Others v British Sky Broadcasting Ltd & Others [2013] EWHC 3479 (Ch) ("Paramount v BSB"), in which he delivered judgment on 13 November 2013. In paragraph 2 of that judgment he said that “The principles to be applied to applications of this kind are now settled at this level”, and then listed each of his earlier judgments in which those principles had been established.[11]I will take all that jurisprudence as read, subject to the few comments which follow in this judgment.[12]There are four things which need to be established in order to satisfy the jurisdictional requirements of section 97A:(1) that the Respondents are service providers;(2) that the users and/or the operators of the Target Websites infringe copyright;(3) that the users and/or the operators of the Target Websites use the services of the Respondents to do that; and(4) that the Respondents have actual knowledge of this.[13]If these jurisdictional requirements are satisfied, the Court must then consider issues of proportionality and discretion before granting the injunction.[14]Turning now to the facts of the present case, the Target Websites are described in detail in the evidence in support of the application, including in particular the witness statement of Simon James Baggs, a partner of Wiggin LLP, who has conduct of these proceedings on behalf of the Applicants.[15]I will not rehearse that evidence in detail; I accept it in its entirety. It establishes, (among other matters) that:(1) no licence has been granted by the Applicants or their group companies to the operators of the Target Websites;(2) the essential purpose of the Target Websites is to make available content that is protected by copyright, including copyright content owned by the Applicants or their group companies;(3) that content comprises film and/or television content;(4) the operators of the Target Websites (nearly all of whom are thought to be based offshore) are clearly aware of the infringement of copyright for which they are responsible; and(5) the Target Websites are directed at users in the UK, among other places.[16]Investigations carried out on behalf of the Applicants (which are described in the evidence) show that over 90 per cent of the content made available by the Viooz website, all of the content made available by the Megashare website, over 87 per cent of the content made available by the zMovie website, and over 95 per cent of the content made available by the Watch32 website, is likely to be protected by copyright.[17]A further feature of the evidence, as in Paramount v BSB, is that the Target Websites do not themselves host the infringing content. Instead, they categorise, reference, moderate or otherwise provide editorial oversight over the content, and provide search facilities to enable visitors of the Target Websites to quickly find the film or television programme which they wish to see. Typically an embedded player located on the Target Website will enable the content of that film or programme to be streamed to the user, whilst being hosted on a separate site. The user may well be unaware of the fact that at this stage a hyperlink will have operated to direct the user to the separate site operated by one of the offshore operators from whom the infringing material ultimately derives.[18]I think that is all I need to say about the general background to this case, which is broadly similar to that which the Court has had occasion to consider in a number of previous cases.[19]Returning to the four questions which I set out earlier, the first question, namely whether the Defendants are service providers, must clearly be answered in the affirmative. There is no doubt about that, and none of the Defendants has ever sought to contend the contrary.[20]The second, and more difficult question in some cases, is whether the operators of the Target Websites infringe copyright. As Mr. Spearman explains in paragraph 28 of his very full and helpful skeleton argument, the Applicants’ case on infringement of copyright is put in two alternative ways.[21]Firstly, the Applicants contend that all the elements of the act of communicating copyright works to the public in accordance with section 20(2)(b) of the Act are made out in respect of the operators of the Target Websites. In short, what they do is actively intervene in order to make the protected works available to their users, who are a large and indeterminate class of the public, many of them in the UK.[22]Secondly, even if that is wrong and the operators do not themselves carry out the act of communication to the public, it is said to be clear beyond argument that the protected works are nevertheless communicated to the public (without a licence from the Applicants), from which it must follow that the act of communication is carried out by other persons, such as the operators of the host websites to which I have referred, or those who place infringing content on the host websites. The operators of the Target Websites are said to authorise the infringing communication to the public by those other persons, or alternatively, they are liable as joint tortfeasors with those other persons. Further, it is submitted that the communication to the public which the operators of the Target Websites are said to authorise or participate in as joint tortfeasors is one which is targeted at users in the UK.[23]The detailed arguments in support of those submissions are set out in Mr. Spearman’s skeleton argument. To a large extent, the relevant principles are helpfully summarised by Arnold J in paragraph 12 of Paramount v BSB. I will not refer to all of them, but the following are worthy of mention. I state them without the supporting citation of authority:
“(1) "Communication to the public" must be interpreted broadly; (2) "Communication to the public" covers any transmission or retransmission of the work to the public not present at the place where the communication originates by wire or wireless means; … (7) There is an act of "communication" when someone gives members of the public access to the work in circumstances where they would not be able to enjoy the work without that intervention; (8) It is sufficient for there to be "communication" that the work is made available to the public in such a way that the persons forming that public may access it whether or not those persons actually access the work; … (11) "The public" refers to an indeterminate number of potential recipients and implies a fairly large number of persons; and … (15) Where there is a communication which does not use a different technical means to that of the original communication, it is necessary to show that the communication is to a new public, that is to say, a public which was not considered by the authors concerned when they authorised the original communication.” (2) "Communication to the public" covers any transmission or retransmission of the work to the public not present at the place where the communication originates by wire or wireless means; … (7) There is an act of "communication" when someone gives members of the public access to the work in circumstances where they would not be able to enjoy the work without that intervention; (8) It is sufficient for there to be "communication" that the work is made available to the public in such a way that the persons forming that public may access it whether or not those persons actually access the work; … (11) "The public" refers to an indeterminate number of potential recipients and implies a fairly large number of persons; and … (15) Where there is a communication which does not use a different technical means to that of the original communication, it is necessary to show that the communication is to a new public, that is to say, a public which was not considered by the authors concerned when they authorised the original communication.”
[24]I pause here to emphasise that the necessary comparison is with the public which was in fact taken into account by the authors when they authorised the initial publication: see paragraph 72 of the Airfield case, which is one of several authorities cited in support of this principle.[25]I come finally to: “(18) Where there is a communication using a different technical means to that of the original communication, it is not necessary to consider whether the communication is to a new public”.[26]Mr. Spearman goes on in his skeleton argument to say, and I agree, that it follows from principle (18) in the above list, and from the decision of the ECJ in ITV Broadcasting Ltd v TV Catchup Ltd (Case C-607/11), that the concept of "communication to the public" within the meaning of Article 3(1) of the Information Society Directive covers a retransmission of works included in a terrestrial TV broadcast(a) where the retransmission is made by an organisation other than the original broadcaster;(b) by means of an internet stream made available to the subscribers of that other organisation who may receive it by logging on to its server, and(c) even though those subscribers are within the area of reception for that terrestrial TV broadcast and may lawfully receive the broadcast on a TV receiver.[27]This serves to illustrate the breadth of the concept of "communication to the public" and the importance of looking to see precisely what it is that is authorised at the stage of the initial communication.[28]Most of the recent decisions in this line of cases have been dealt with on paper by Arnold J, or other judges of this Division, and it appears that this application was originally intended to be dealt with likewise. However, for reasons that are not entirely clear to me, it seems that an oral hearing of this application was directed by Birss J. This may have been due, at least in part, to the very recent decision of the ECJ in the case of Nils Svensson and Others v Retriever Sverige AB (Case C-466/12) ("Svensson") which was delivered on 13 February 2014. The earlier stages in the Svensson litigation are described at some length by Arnold J in Paramount v BSB at paragraphs 13 to 24, but at that stage the ECJ had yet to rule on the questions referred to it by the Swedish Supreme Court.[29]In very broad terms the case concerned the activities of an organisation called Retriever Sverige AB ("Retriever"), which provided online access for its subscribers (approximately 3,000 in number) to articles which had been published both in printed form and online by various newspapers. A claim for breach of copyright was brought by a number of journalists whose articles had first been published in that way, i.e. both in print and online, where they were accessible, free of charge, to any interested members of the public.[30]Various issues arising from those circumstances were the subject of a reference to the European Court for a preliminary ruling. The effect of the ruling was to dismiss the journalists’ claim, ultimately on the basis that the original placing of the relevant material on the website of the relevant newspaper effectively put the material in the public domain and made it available to all interested parties, including Retriever. There was, therefore, no further communication to a new public by Retriever.[31]It is clear that the facts of Svensson could hardly be further removed from the facts of the present case where the films and TV programmes in issue are clearly subject to copyright, and the operators who make them available to the Target Websites are not authorised in any shape or form to do so. The case is, therefore, clearly distinguishable on its facts, as Mr. Spearman helpfully pointed out in an email which he sent to the clerk to Birss J on 13 February 2014.[32]The case is, however, of some interest because it establishes more clearly than previous authority had done that the mere provision of access by means of a hyperlink will normally amount to a communication within the meaning of Article 3(1). Furthermore, it will normally amount to a "communication to the public" within the meaning of that Article. The case turned on the identification of the relevant public which was, in fact, the same public as that to which the material had originally been communicated through the newspaper’s own website.[33]It seems to me, therefore, that Svensson does not impact in any relevant way upon the case which I have before me today. Mr. Spearman referred me to some possible issues which may arise from the wording adopted by the Court in paragraph 24 of the judgment, and to some further questions which may arise from the way in which Arnold J expressed himself in paragraph 33 of his judgment in Paramount v BSB. I prefer not to comment on those issues, however, as I think they would be far more appropriately dealt with by Arnold J himself, or other judges who have more experience than I do in this field, bearing in mind that the issues are not of any immediate relevance to the application before me.[34]For present purposes, I need only refer to paragraph 32 of Paramount v BSB where Arnold J said, having reconsidered his reasoning in FAPL v Sky in light of the pending references to the ECJ in Svensson and two other cases (C More Entertainment AB v Sandberg (C-279/13) and BestWater International GmbH v Mebes (C-348/13)), that he saw no reason to change his views about the actions of operators of websites such as those under consideration in the present line of cases.[35]In short, Arnold J took the view that the operators were intervening in a highly material way to make the copyright works available to a new audience. I respectfully agree, and I see no reason to come to any different conclusion in the circumstances of the present case.[36]I can, therefore, move on to consider briefly another related issue, namely the targeting of a sufficient section of the public in the UK. Earlier cases, including in particular EMI Records Ltd v British Sky Broadcasting Ltd [2013] EWHC 379 (Ch), list the factors which have in the past led the court to conclude that the acts of communication were targeted at the UK. They include such matters as the number of users of the relevant websites in the UK, the inclusion on the websites of large numbers of recordings by UK artists which were otherwise in demand in the UK, the fact that the default language of the websites was English, and the presence of advertisements with prices in sterling.[37]In the context of the present case, which of course involves films and TV programmes rather than musical recordings, these and similar factors are clearly established on the evidence. There is evidence, for example, about the degree of popularity of the websites in the UK, about advertisements published on them which are clearly aimed at the UK market, and that English is the default language of each website. In short, I am fully satisfied that this particular requirement is fulfilled.[38]I now come to the third of the basic requirements, namely, whether the operators of the Target Websites use the Defendants’ services in order to infringe copyright. Again, it seems to me on the evidence that the answer is clearly yes, as it was in Paramountv BSB and earlier cases, and no submission to the contrary has been advanced by any of the Defendants.[39]I can be equally brief in my treatment of the fourth requirement, which is whether the Defendants have actual knowledge of the infringement. The answer is that by now they clearly do, even if they did not at a comparatively recent stage. Emails were sent to them at the end of November 2013, giving them advance notice of this application and attaching a schedule containing sample evidence. In addition, the Defendants have been served with the application itself and the supporting evidence. On that basis, if no other, they clearly do now have actual knowledge of the infringement.[40]It follows, therefore, that the requirements of jurisdiction under section 97A of the Act are all satisfied. It remains only to consider issues of proportionality and discretion. The relevant considerations are again helpfully set out in Mr. Spearman’s skeleton argument, and I have been referred by him to the relevant authorities, including the fairly recent decision of the Supreme Court in Rugby Football Union v Consolidated Information Ltd [2012] UKSC 55, [2012] 1 WLR 3333, in which the Court approved the approach to proportionality adopted by Arnold J in Golden Eye (International) Ltd v Telefonica UK Ltd [2012] RPC 28 at [117].[41]To summarise, the main rights engaged are the rights to privacy and protection of personal data and the rights to freedom of expression under Article 10 of the ECHR. Putting it very broadly, the correct approach is that none of the relevant Articles have precedence over the others, and where their values conflict, their comparative importance needs to be closely examined together with the justifications for interfering with or restricting each right. Finally, a proportionality or "ultimate balancing test" must also be applied.[42]The rights in question are those of the Respondents, those of the operators of the Target Websites and those of the users of the Target Websites. It appears to me plain that the result of the balancing exercise is that the rights of the Applicants to protection of their copyright should prevail over the rights to freedom of expression and other rights of the other groups of persons whom I have mentioned. The operators of the Target Websites appear to be involved in an activity which they must know is wholly illegitimate. So far as the users of the Target Websites are concerned, they must also for the most part be very well aware that they are participating in an unlawful activity. Furthermore, the material which they download is readily available through a number of lawful channels, so there is no question of depriving users of access to it.[43]So far as the Respondents themselves are concerned, they are essentially in the position of intermediaries and they do not oppose the relief sought. The evidence in this as in earlier cases establishes that they have the technical measures at their disposal to give effect to orders of this type, the terms of which they have agreed to. The cost of compliance will, therefore, be relatively modest and will not cause them any particular difficulty. If any problems do arise there is, of course, liberty for them to apply in the orders. There is also liberty to apply in the unlikely event that any of the operators of the Target Websites themselves wish to make submissions or raise arguments about the impact of the orders on them.[44]In earlier cases, Arnold J has had little hesitation in concluding that the balance comes down in favour of granting the injunctions sought. For the reasons which I have given, I reach a similar conclusion in the present case. I am, therefore, satisfied that the injunctions should be granted. _________________________

Cited in 4 later judgments