Usenet filesharing defeated in court

The Hight Court in England has just delivered a ruling in the case of 20th Century Fox & Anor v Newzbin Ltd. Newzbin is a usenet binary file-sharing service that allows users to search and share material using the bulletin-board-like protocol. Wikipedia points out that “Usenet is distributed among a large, constantly changing conglomeration of servers that store and forward messages to one another.” However, Newzbin does provide a centralised system of search, edited content and reports on what is available, as well as providing proprietary file system for some uploads. Newzbin has been making some nice profits from premium accounts.

While most of the content is not hosted by Newzbin, it is clear that the site does provide specific services tailored to take advantage of usenet, so it adds value to encourage subscription. The main legal question is therefore whether the service is infringing copyright. The claimants sued Newzbin arguing that it engaged in three infringing practices:

“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.”

Kitchin J agreed with the claimants in a well-reasoned yet surprisingly short decision. He looked first at authorisation, and here the fact that Newzbin aggregates and provides quite a substantial editorial and added-value element was deemed important. He opined:

“98. Turning to the question of authorisation, I consider the following points are material. I begin with the nature of the relationship between the defendant and its members. Premium members enter into an agreement with the defendant which permits them to access Newzbin in consideration of a weekly payment. Thereafter these members are introduced to Newzbin as being a system which provides a searching and indexing facility and a guide to the materials available on Usenet. They are invited to explore the various indices at the level of reports in the Newzbin index or at the files level in the RAW and Condensed indices. In each case they have the option of browsing the databases directly or by using the various Newzbin subject matter categories. Focusing on the Movies category, premium members see that this category is broken down into levels of sub-category which permit them to search and browse not only by reference to the names of particular films but also, for example, by reference to genre. This is clearly a sophisticated facility. [...]
102. For all these reasons 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, including each of the films specifically relied upon in these proceedings. “

With regards to encouraging and entering into a common design to infringe, Kitchin J also sided with the claimants on the basis that the site was clearly engaged in secondary infringement as its main purpose was indeed to infringe copyright.

With regards to communicating the work to the public, Kitchin J says:

“In the light of Directive 2001/29/EC and the guidance provided by the ECJ in Rafael Hoteles, I believe the following matters are material to this question. The defendant has provided a service which, upon payment of a weekly subscription, enables its premium members to identify films of their choice using the Newzbin cataloguing and indexing system and then to download those films using the NZB facility, all in the way I have described in detail earlier in this judgment. This service is not remotely passive. Nor does it simply provide a link to a film of interest which is made available by a third party. To the contrary, the defendant has intervened in a highly material way to make the claimants’ films available to a new audience, that is to say its premium members. Furthermore it has done so by providing a sophisticated technical and editorial system which allows its premium members to download all the component messages of the film of their choice upon pressing a button, and so avoid days of (potentially futile) effort in seeking to gather those messages together for themselves. As a result, I have no doubt that the defendant’s premium members consider that Newzbin is making available to them the films in the Newzbin index. Moreover, the defendant has provided its service in full knowledge of the consequences of its actions. In my judgment it follows from the foregoing that the defendant has indeed made the claimants’ copyright films available to its premium members and has in that way communicated them to the public.”

As a result, Newzbin has been declared liable for direct and secondary infringement, as well as potentially getting additional damages because of flagrancy (this will be decided later, the amount is not part of the sentence). Newzbin has also been given an injunction “to restrain the defendant from infringing the claimants’ copyrights in relation to their repertoire of films”. A much wider injunction was denied (see OUT-Law for more about this part of the ruling).

This seem like a logical result given the nature of Newzbin’s services. The fact that Newzbin has both editorial function and goes out of its way to make it easy for its users to infringe was always going to count strongly against them. In my opinion, there was little that Newzbin could do to defend itself. Their strongest argument was to cite iiNet, the Australian case, but the technologies are too different, and Newzbin’s involvement too large.

This is an interesting result contrasting it with the earlier OiNK criminal case. I commented at the time that it seemed like the service was definitely infringing, but that the copyright holders had sought criminal liability instead of civil. If they had gone the civil way, the case might have looked similar to Newzbin. It is even more interesting that an uploader involved with OiNK has seen his case dropped by the Crown Prosecution Service.

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