The High Court has now granted that order. Virgin Media, Sky, Everything Everywhere, O2 and TalkTalk have been ordered by the High Court to put measures in place that prevent their respective users accessing The Pirate Bay. ISPs have criticised the move as a part-solution only to the increasing problem of copyright infringement.

A number of record companies, represented by the BPI and PPL (Phonographic Performance Ltd) applied to the High Court for an order for ISPs to block, or at least impede, access to The Pirate Bay. As with the Newzbin2 case, the application came under section 97A of the Copyright, Designs and Patents Act 1988 (CDPA) which provides that an injunction may be obtained against an ISP that has “actual knowledge” of another person using their service to infringe copyright. The parties had agreed to a trial of two preliminary issues – whether (i) the operators and (ii) the users of the website infringed the copyright of the BPI and PPL members.

The High Court ruled that both the operators and users of The Pirate Bay had infringed copyright under the European Union’s Copyright Directive and the CDPA. The High Court will now go on to consider whether to grant the order against the ISPs to block The Pirate Bay in the same way that Newzbin2 has been blocked, but the outcome seems to be beyond doubt – the High Court stated that the copyright infringement in this case was the same, if not greater, than that involved in Newzbin2.

The ruling in the Newzbin2 case was considered to be a landmark in the fight against copyright infringement, and copyright owners were celebrating a victory. This was particularly following the slow progress in making the blocking provisions of the controversial Digital Economy Act 2010 active. The High Court seems to have upheld the decision in Newzbin2, or at least has got half way there – this will be a huge encouragement to copyright owners to continue in their pursuit of the protection of their copyright by using section 97A of the CDPA.

The ECJ had ruled that the transmission of PL copyrighted works by television in pubs was a communication to the public under article 3(1) of the Copyright Directive, and the High Court ruled that that article was effectively transposed into English law by section 20 of the Copyright, Designs and Patents Act 1988 (CDPA). The Copyright Directive requires member states to provide authors with the exclusive right to authorise or prohibit any communication of their works to the public by wire or wireless means, including the making available of their works to the public in such a way that members of the public may access them from a place and at a time individually chosen by them. Article 3(1) states that a communication to the public of a copyright work is an act restricted by the copyright in a literary, dramatic, musical or artistic work, a sound recording or film, and includes transmission by electronic means. Therefore, the publicans were technically breaching section 20 CPDA when they screened PL games through a decoder card.

However, the High Court ruled that section 72(1)(c) CPDA sets out a defence – that the showing or playing in public of a broadcast, to an audience who have not paid for it, does not infringe any copyright in the broadcast or any film included in it. The High Court ruled that it was clearly the intention of section 72 CPDA to allow films included in broadcasts to be seen and heard in pubs without the consent of the copyright owners, and that any infringement was limited to the PL anthem and graphics.

The High Court also ruled that obligations in exclusive licence agreements to prevent the supply of decoder cards outside the licensed territory breached article 101(1) of the Treaty of the Functioning of the European Union as they restricted competition, so were void to the extent that they restricted the Greek licensee in question from supplying the cards for use in the UK.

As with the decision of the ECJ, both sides can find reasons to be happy with the High Court’s ruling. The PL has some aspects of copyright that it can enforce, but the publicans have received the High Court’s support that the PL’s actions were anti-competitive. It remains to be seen how publicans can deal with the copyright infringement of the PL anthem and graphics – the anthem can simply be turned off and the publicans have made undertakings to do so; however, the graphics may prove to be more difficult to deal with.

Richard O’Dwyer closed the website in 2010 after he was visited by the police and US officials. However, US authorities alleged that the website contributed towards “criminal activity” in the US despite O’Dwyer never having been to the US, and despite the fact that no action is being taken against him in the UK. They also claimed that the website generated $230,000 in advertising revenue before it was shut down. O’Dwyer should be extradited to face charges of “authorising copyright infringement” as providing the links to the pirated content is a serious offence in the US and would justify extradition under the UK-US extradition agreement.

O’Dywer’s lawyers had argued that the website was merely a search engine for content, and that he should only face charges in the UK. He could face up to ten years in a US jail if found guilty of copyright infringement.

MM issued proceedings for infringement of copyright, alleging that the BBC had used his original artistic work in the “Bounce Bunch”, which he had provided to the BBC, in producing “Kerwhizz”, and that the characters were so similar that they could only have been created by the BBC by copying his own characters. MM showed that there were extensive similarities and that the BBC had prior access to his work (which had been available online even before he submitted it to the BBC), such that the Patents County Court passed the burden of proof on to the BBC to show that the characters in “Kerwhizz” did not come about through copying.

The Patents County Court ruled that there had not been any copyright infringement, on the grounds that the BBC’s evidence clearly showed that the “Kerwhizz” creations did not come about through copying the “Bounce Bunch” characters. There was no causal connection between the two. Rather, the Patents County Court found that the BBC witnesses had shown on the evidence that they had already provided the Kerwhizz characters prior to the communication from MM. In any event, “Bounce Bunch” designs were simple, generic and not particularly memorable, such that, even if a BBC designer saw the designs, subconscious copying of those designs was extremely unlikely.

1. the meaning of a “communication to the public” for the purposes of the Copyright Designs and Patents Act 1988 (the “Act”); and
2. the meaning of “reproduction in part” (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) for the purposes of the Act.

The High Court has now ruled that the first question should be amended for reference to the ECJ, as to whether the right to authorise or prohibit broadcasts extends to broadcasters of free-to-air programmes online to users who could lawfully receive those broadcasts on their televisions.

The High Court has also stated that the second question above has been answered by the ruling of the ECJ in the case of the FA Premier League v QC Leisure & Karen Murphy, which stated that copyright owners do have the “exclusive right to authorise or prohibit direct or indirect” reproduction of their content in the form of “transient fragments of the works within the memory of a satellite decoder and on a television screen, provided that those fragments contain elements which are the expression of the authors’ own intellectual creation, and the unit composed of the fragments reproduced simultaneously must be examined in order to determine whether it contains such elements”.

BT’s initial response has been that it would need to be ordered by a court before taking action, in the same way that a court order was needed before Newzbin2 was blocked. Those downloading copyright content illegally may not be paying for the service they receive, but it is certainly costing the ISPs and industry bodies huge amounts in legal fees to try to prevent it.

BT estimated that the cost of implementing the court order was approximately £5,000, so it is unlikely that it would be worth the ISPs putting up a legal fight against any forthcoming court order. Indeed, the ISPs seem to have indicated that they would comply with any court order they receive. However, there is some doubt as to whether they have agreed to the width of the MPA’s requests for their consent to a court order. The move will only add fuel to the fire stoked up by critics of website blocking – the speed with which the pressure to block Newzbin2 has spread to other ISPs may also spread to other websites (such as The Pirate Bay) and lead to more argument, perhaps in court.

The initial ruling was given in favour of the film studios (whose copyright material had been copied) under section 97A of the Copyright, Designs and Patents Act 1988 (the Act), which provides that an injunction may be granted against an Internet service provider (ISP) that has “actual knowledge” of the use of its service to infringe copyright. The case will be of interest to ISPs and rights-holders, particularly since this is believed to be the first time that an order under section 97A has been made against an ISP.

BT has been ordered to use its Cleanfeed filtering system, which is currently used to block access to websites featuring images of child abuse, to block the website. Controversially, BT was also told to pay for the cost of implementing the court order. The judge said that since BT made money out of its users, it was right that it should foot the bill as part of the cost of doing business, and in any event the costs were proportionate. It left open the possibility of whether the costs would always be paid for by the ISP but in this case it would make sense.

BT and the film studios agreed that as software had been developed and was likely to be circulated by copyright infringers that could circumvent BT’s Cleanfeed system, BT’s blocking measures may have limited effect. However, the High Court judge said that the court order would still be justified if it meant that access to Newzbin 2 was prevented for only a minority of users.

This is the first time an order has been granted against an ISP under section 97A of the Act, but it is also interesting to note that the judge stated that he thought it unlikely that, following the implementation of the block, a BT user would be able to bring a claim against BT for breach of their Internet service contract with the ISP. However, that might be little consolation for BT, which merely thanked the High Court for providing ‘clarity’ on the issue.

No doubt, BT would have felt a bit aggrieved that the Court had refused to accept its argument that the order should be set aside or varied if the film studios did not apply within a reasonable time for the same injunction against other UK ISPs. The Court said that there was nothing in the law that made the injunction conditional on this action being taken. It was for the studios to decide on which remedies they would pursue and against whom.

BT would also no doubt have been unhappy at the refusal of the judge to give it permission to shut down Cleanfeed temporarily if it needed to. The judge said that it would only do that if the studios consented or BT obtained a court order.

So, all in all, a great result for the creative industries, but not a particularly good day in court for innocent ISPs.

The ISPs have now been granted permission to appeal by the Court of Appeal. It seemed that the Digital Economy Act was safe following the Court of Appeal’s initial decision to refuse permission to appeal, but this long-running saga now seems to have some more time left to run.

The recommendations of the Hargreaves Report that have been accepted are:

-          to create a digital market place where copyright licences can be traded (a “Digital Copyright Exchange”);

-          to allow an exception from copyright infringement for limited private copying, such as copying from a legally purchased CD onto a computer or portable device;

-          to allow an exception from copyright infringement for parodies of other people’s work without first having to obtain the owner’s consent;

-          to allow an exception from copyright infringement for search and analysis techniques known as ‘text and data mining’, which is currently illegal despite its benefits to medical and other science and for which advanced technology exists;

-          to establish licensing and clearance procedures for orphan works (copyright works for which the owner is not known); and

-          to review the role of the Intellectual Property Office.

At the same time, the Government has announced:

-          a new enforcement programme to protect intellectual property rights, which will be further investigated before any specific legislative measures are taken;

-          a notification system to inform Internet users of copyright issues and how to avoid illegal and pirated content; and

-          a five year international strategy to improve the efficiency and effectiveness of the international intellectual property system.

The Government has accepted the Hargreaves Report almost in its entirety, which is a refreshing response for an industry that for so long seems to have been desperate for reform. The reforms to copyright are intended to ensure that the law reflects reality, and for a consumer wanting to move music they have legally bought in the form of a CD onto their iPod, this is a huge step. However, it is the package as a whole which impresses – a Digital Copyright Exchange, a licensing system for orphan works, and reviews of enforcement and international strategies – whilst giving the Government a lot to be getting on with, suggests that intellectual property law in the UK is getting the facelift that many have been demanding for a long time.

ITV Broadcasting, together with Channel 4 Television and other broadcasters, issued proceedings against TVC for infringement of copyright. The case came to trial with the broadcasters arguing that the copyright in the broadcasts and films was infringed by (i) TVC communicating them to the public, and (ii) TVC making transient copies of the broadcasts and films in its own servers and on the screens of its users.

TVC based its defence on the following arguments:

(a)                 section 20 (1)(c) of the Copyright Designs and Patents Act 1988 (CDPA) states that communicating a copyright work to the public by broadcast constitutes infringement of copyright, but this section went beyond the powers of the Secretary of State granted to it under section 2(2) of the European Communities Act 1972 (which grants powers for the implementation of European law in the UK) and the scope of the Copyright Directive, making section 20 (1)(c) “ultra vires” and therefore invalid;

(b)                 even if section 20 (1)(c) was validly enacted, TVC was not communicating the broadcasts and films within the meaning of that section and thus not infringing copyright;

(c)                 any copies of the broadcasts and films made on TVC’s servers were not copies of substantial parts, and therefore copyright was not infringed;

(d)                 TVC had a defence under section 28A of the CDPA in that it was making temporary incidental copies as an integral part of a technological process to allow it to transmit the work between third parties, and that, in doing so, the transmission had no independent economic significance to TVC; and

(e)                 TVC had a defence under section 73 of the CDPA in that it was streaming regional channels only in the area for which those channels were made for reception and the re-transmission was re-transmitted through the Internet by cable from its servers.

The Ruling

The High Court ruled as follows:

(a)                 section 20 (1)(c) of the CDPA was not “ultra vires” – the powers of the Secretary of State under section 2(2) of the European Communities Act 1972 were not to be interpreted narrowly and allowed for legislation to be enacted by the UK Government which was not specifically required for the implementation of an EU Directive such as the Copyright Directive. Rather, section 20 (1)(c) was closely related to the Copyright Directive’s subject matter and was thus validly enacted;

(b)                 TVC was, in the view of the High Court, communicating films and broadcasts to the public, but this issue was referred to the European Court of Justice (ECJ) for a preliminary ruling. This was because case law reviewed by the High Court did not deal with the specific issue considered in this case – whether or not there was a communication to the public when an intermediary entity, acting for its own profit, intervened in full knowledge of the consequence of its actions and in order to expand its own audience to its transmissions and adverts, and communicated broadcast signals to the public who could access that signal using their own television or computer at home;

(c)                 TVC was not, in the view of the High Court, reproducing a substantial part of the films or broadcasts in its servers or on a user’s screen, but this issue was also referred to the ECJ. This was because the meaning of ‘reproduction in part’ (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) had already been referred to the ECJ in another case – Football Association Premier League v QC Leisure – and the ECJ’s decision in that case was outstanding;

(d)                 TVC did not need the protection of section 28A of the CDPA if the High Court’s view in (iii) above was correct, as no defence would be needed if there was no reproduction of broadcasts; however, the High Court noted that this issue depended on the ECJ’s decision in the Football Association Premier League v QC Leisure case; and

(e)                 the High Court ruled that the defence under section 73 of the CDPA did apply to the channels streamed by TVC but only where (a) there was actually a cable involved in the re-transmission at the user’s end i.e. the streaming to a computer was covered by the defence, but not streaming to a mobile phone, and (b) the re-transmission was within the intended regional area for service of that channel.

Comment

Copyright seems to be a major issue in the courts at the moment, and the decision of the ECJ in relation to those issues referred, both in this case and the Football Association Premier League v QC Leisure case will have a huge impact on the streaming of broadcasts on the Internet. The High Court’s view seemed to be that the streaming for commercial purposes was an infringement of broadcast copyright, but it remains to be seen whether the ECJ’s decision differs fro the High Court’s initial view.

Andrew Ainsworth (AA) was hired in 1976 by Lucasfilm (L) to make ‘Stormtrooper’ helmets and armour for the film ‘Star Wars’ which was released in 1977 (later renamed ‘Star Wars: A New Hope’). In 2004, AA set up a website and sold helmets and armour produced using the same mould as had been used in 1976, some of which were sold and delivered to customers in the USA. L issued proceedings against AA in California for infringement of copyright and trade marks, and the US District Court in California ruled against AA to the tune of $10 million. However, since AA had no assets in the USA against which the judgement could be enforced and since the UK usually does not enforce US court judgements, the US proceedings were not taken any further.

Instead, proceedings were issued in England. AA admitted that he had used drawings provided to him in 1976 by L, and that he had used those drawings in producing the helmet and armour. Although AA admitted that L had had unregistered design rights in the helmets and armour which would have prohibited him from manufacturing identical objects (and such rights are totally different to copyright), he contended that these were the only rights L had had which AA could have otherwise infringed (as these unregistered design rights only last for 10-15 years from their creation and so had expired at the time he started recreating the helmets and armour). However, he said that to the extent the drawings and objects attracted protection under the Copyright, Designs and Patents Act 1988 (CDPA), they were not artistic works (and it should be noted that a sculpture is an Artistic work so he was arguing the objects were not sculptures, which would attract protection). He also argued that he was not infringing CDPA by making helmets and armour to the designs because, if for some reason the judges were to find that the original objects were sculptures (contrary to what he was arguing) then he was entitled to a defence under sections 51 and 52 of the CDPA which permits manufacture of an article to a design, without infringing copyright.

In the initial ruling, the High Court ruled that the defence under sections 51 and 52 of the CDPA did apply. Accordingly, there was no copyright infringement. The High Court also ruled that, whilst the US judgment could not be enforced in the English courts, the US copyright had been infringed and the claim was justicable in the English courts.

The Court of Appeal upheld the ruling of the High Court by saying that the helmet and armour were not artistic works under the CDPA. However, the Court of Appeal rejected the High Court’s reasoning in relation to the justicability of a claim in the English courts – a claim for infringement of US copyright should not be justicable in the English courts. As a result, L appealed to the Supreme Court on two issues:

1)       whether the helmets and amour were sculptures (which would attract copyright protection) and then whether the defences under sections 51 and 52 of the CDPA applied; and

2)       whether the English courts could consider a claim against a person domiciled in England for copyright infringement alleged to have happened, and was subject to a law, outside the EU.

Supreme Court Ruling

1) Copyright

The law relevant to the copyright infringement claim, as referred to above, is provided by the CDPA. Under section 1 of the CDPA, copyright exists in original artistic works. Under section 4 of the CDPA, artistic works can include graphic works or sculptures, which are defined as a cast or model made for the purposes of sculpture. Section 16 of the CDPA defines copyright infringement as being a person who copies all or part of a work, whether directly or indirectly, without the copyright owner’s permission.

The Supreme Court ruled that the helmet was not a sculpture. Rather, it was considered to be ‘a mixture of costume and prop’ for the effect of the film it was used in. The film itself was the work of art, rather than the helmet, which merely contributed to the success of the film. The Supreme Court referred to the helmet as ‘utilitarian’ in that it was merely an element of the production process of the film. Therefore the rulings of both the High Court and the Court of Appeal were upheld.

As such, the Supreme Court did not need to consider sections 51 and 52 of the CDPA and whether AA could rely on them as defences to the copyright infringement – the helmet was not an artistic work that was subject to copyright in the first place, and as such AA had not infringed any copyright under the CDPA for which he required a defence.

2) Justicability in England

The relevant law considered by the Supreme Court, in order to decide whether alleged copyright infringement abroad under the provisions of a foreign law was justicable in the English courts, was somewhat more complicated, in that the Supreme Court had to consider both the Brussels Regulation, an EU regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, and case law.

Under article 22(4) of the Brussels Regulation 2000, an exception is provided to the general rule that a defendant should be sued in the court where the defendant is domiciled. That exception is that, where proceedings relate to the registration or infringement of intellectual property rights, exclusive jurisdiction is given to the member state in which registration has taken place, been applied for or should have taken place. This exception takes effect irrespective of the domicile of the defendant.

The case law considered by the Supreme Court was extensive, and below is a brief summary only of the issues from the cases considered:

-          the Moçambique rule, resulting from a case in 1893, relates to the trespass of property, and states that the English courts will not exercise jurisdiction in relation to matters which were ‘local’ in their nature, compared to proceedings which were ‘transitory or personal’. Therefore the English courts would not accept jurisdiction on a claim over property outside of English territory unless it could be proved that the matter was a ‘transitory or personal’ rather than a ‘local’ issue;

-          the rule in Philips v Eyre 1870, which states that an act done abroad can only be the subject of proceedings in England if the act, if done in England, would have been a tort;

-          Tyburn Productions v Conan Doyle 1991, in which an infringement of US copyright was struck out by applying the Moçambique rule and the rule in Philips v Eyre;

-          Coin Controls v Suzo International 1999, which applied the Moçambique rule and the rule in Philips v Eyre as well as article 22 of the Brussels Regulation; and

-          Red Sea Insurance v Bouygues 1995, a Privy Council ruling which was applied by the Court of Appeal in Pearce v Ove 2000 in relation to hearing a claim for infringement of Dutch copyright, which stated that the rule in Philips v Eyre should be displaced if a country had a specific relationship to a particular act and the parties.

The Supreme Court ruled that the claim for infringement of US copyright was a claim over which the English courts could accept jurisdiction if there was a basis for that jurisdiction in relation to the defendant. The Supreme Court ruled that the Moçambique rule and the rule in Philips v Eyre were no longer relevant, having been pushed to the side by Red Sea Insurance v Bouygues 1995 and actually being abolished by the Private International Law (Miscellaneous Provisions) Act 1995. As such, there was nothing to prevent the English courts accepting jurisdiction over infringement of intellectual property rights abroad – L’s claim against AA for copyright infringement in the USA under US law could be heard in the English courts.

The Supreme Court also considered intellectual property policies relating to this issue, and referred to the fact that article 22(4) of the Brussels Regulation, which assigned exclusive jurisdiction to courts of the country where intellectual property rights originated (which would have prevented the English courts from accepting jurisdiction in this case) would apply to copyright only in rare cases. The Supreme Court made clear that article 22(4) does not apply to intellectual property outside the EU, but emphasised that it shows that there is a distinction between claims which involve registration or validity of intellectual property rights and those which do not, reiterating that this claim was for copyright infringement and not validity or registration issues.

The Supreme Court also considered Rome (II), the EU regulation on non-contractual obligations, which, whilst not applicable in this case as it came into force in 2009, shows that European policy is not against the litigation of foreign intellectual property rights. Rather, the Supreme Court stated that Rome (II) “… plainly envisages that actions may be brought in [EU members states] for infringement of foreign intellectual property rights, including copyright”.

As such, The Supreme Court ruled that the decision in Tyburn Productions v Conan Doyle was mistaken, and that the English courts could accept jurisdiction for the claim by L for breach of copyright by AA in the USA.

Comment

The importance of this ruling should not be underestimated. Many view this as a victory for Mr Ainsworth because he cannot be sued for his sales in the UK (because the original helmets and armour are not sculptures) and because he will not be sued in the UK for his sales in the US – even though he now could be sued (and the only reason Lucasfilm will not sue him is because his sales in the US were so low, he’s not worth suing)! But that is the narrow view of this case.

The wider significant issue ruled on by the Supreme Court is jurisdiction, and this is what affects everyone else in the future. The fact that a claim for foreign copyright infringement against a person domiciled in England falls within the jurisdiction of the English courts has wide-ranging implications.

The MPA said BT was being targeted as it is the largest ISP in the UK. It may also be because BT uses the website-blocking software Cleanfeed to stop access to child sex abuse images, so it clearly has filtering technology available. The MPA hopes the injunction will force BT to block access to Newzbin in the same way it blocks access to websites hosting child porn , and this should then have a knock-on effect on other ISPs and website blocking.

This is a really interesting development and tactic by the entertainment industry in its long-standing cat-and-mouse battle against online copyright infringers. The MPA took action against Newzbin in 2010 in the UK, where Newzbin had been based, and the High Court ordered that Newzbin removed copyright-infringing material from the website. However, the company behind the website folder and a new version of the website set up by a phoenix company has since appeared operated out of the Seychelles. Due to the difficulties in taking action against that site there, the MPA is trying this new tactic. It will be interesting to see the outcome.

This case comes against the backdrop of the Digital Economy Act, which, when its provisions are fully implemented, would require ISPs to pass details of users who infringe copyright material to copyright holders so that they can take action against the infringers. ISPs would also have to suspend Internet access of the infringers.

Ainsworth produced the “stormtrooper” helmets and armour for the first Star Wars film “A New Hope” in 1977. He was sued in 2004 for over £10 million after he started to sell replica helmets, with Lucasfilm arguing that the helmets could not be reproduced due to the intellectual property in the helmets belonging to Lucasfilm.

The road to the Supreme Court started a long time ago in a country far (far) away. The case began in a court in the USA, with Lucasfilm claiming an infringement of copyright and trade mark for Ainsworth’s sales in the US, totalling £30,000. The U.S. District Court for the Central District of California ruled in favour of Lucasfilm, and Ainsworth was told to pay Lucasfilm more than US$20 million for the infringement, despite the low value of Ainsworth’s total sales. Lucasfilm was forced to enforce the judgment in the UK as Ainsworth had no assets in the US.

Lucasfilm argued that the judgment should be enforced due to Ainsworth’s market presence in the US – even though he was not there, the helmets were advertised there and he was clearly targeting the US market through his website. In addition, Lucasfilm argued that the helmets were sculptures, meaning that the copyright protection for the helmets would last for 70 years from the date of design – this would mean Ainsworth had clearly infringed the copyright.

Lucasfilm failed to convince the High Court, which ruled that Lucasfilm’s argument about Ainsworth’s “presence” in the USA did not stand up to scrutiny, and the court was not willing to set a new precedent for future cases. The High Court also ruled that the helmets were not sculptures, meaning they were subject to a shorter period of copyright protection of 15 years from the date that they were first marketed bythe operation of statutory defences. By the High Court’s ruling, Ainsworth was in the clear. The Court of Appeal then upheld the High Court ruling.

Now Lucasfilm has convinced the Supreme Court to hear the case, and it will review the two main points in the decisions of the High Court and the Court of Appeal – whether Ainsworth can be sued in the UK for actions in the US that infringed the copyright of Lucasfilm under US law whilst he was in the UK, and whether the helmets should be considered sculptures to allow for the longer 70 year protection period under copyright.

Given the decisions of the High Court and the Court of Appeal, it seems that Lucasfilm will need more than a ‘Jedi Mind Trick’ to convince the Supreme Court of its arguments, but a rejection of Lucasfilm’s case may impact the US film industry’s use of UK suppliers when times are hard enough.

If you miss the deadline it could be costly, as paper returns filed after this date could mean a £100 penalty.

An alternative to paper-filing is to file your return online, which benefits from a January deadline.

If you would like assistance in preparing and filing your tax returns, please contact James Odds on 01923 202020 or james.odds@mablaw.com.

In Akzo Nobel Chemicals Ltd And Akcros Chemicals Ltd V European Commission Advocate General Juliane Kokott confirmed that confidential communications between companies and their in-house lawyers should not, in Commission investigations, attract the same professional privilege as communications between companies and outside counsel.

Privilege will only attach to communications with independent external lawyers in relation to clients’ rights of defence.  The position under EC law is therefore different from that throughout the UK where privilege attaches to internal client communications with internal lawyers in the same way as communications with external lawyers.

The reason given by the European court is that in-house lawyers are not fully independent of the company in which they work. Although presently there remains a distinction between the common law and other jurisdictions, the danger is that this decision opens the floodgates and that all communications between a company and its in-house legal team may be under threat of exposure in the event of subsequent proceedings.

Tim Constable comments: It is not clear how far-reaching this decision will prove to be, but for in-house counsel the safety play for more sensitive legal communications could be to copy in external legal advisers from the start to ensure that privilege and confidentiality are maintained.

The big news is that companies that fail to register their energy use by next month will be hit with fines that could reach £45,000 under the little-known rules. 

Those that do participate in the Carbon Reduction Commitment (CRC) initiative by declaring their energy use will face charges for every ton of greenhouse gas they produce.  These payments are expected to average £38,000 a year for medium-sized firms, and could reach £100,000 for larger organisations.

Many businesses are (understandably) aggrieved at this prospect fines which will put pressure at a time when bottom lines are shrinking.

Any company or public sector organisation that consumes more than 6,000 megawatt hours (MWh) of energy a year – meaning a power bill of about £500,000 – must register its energy use by the end of next month.  From April 2011, they will need to buy permits for each tonne of carbon dioxide emitted. For those using 6,000MWh, that could mean £38,000.

Of about 4,000 organisations estimated to qualify for the scheme, only 1,229 have registered to date.   Missing the Sept 30 deadline leads to an immediate £5,000 fine, and £500 for each day after that, up to a maximum of £45,000.

Another 15,000 smaller organisations are also required to register and could be expected to buy permits in the future. If they miss the September deadline, they face fines of £500.

For more information click here for the Environment Agency (who administer the scheme).

The US District Court for the Southern District of New York disagreed with Viacom. District Judge Louis Stanton said: ‘Mere knowledge of prevalence of such activity in general is not enough. The provider need not monitor or seek out facts indicating such activity.’ As such, Google was entitled to the safe harbour protection as it had had insufficient notice of any particular infringements. The ruling said that the case showed how well Google’s take-down facility worked, because Viacom had accumulated 100,000 videos over several months and nearly all of them were disabled the day after Viacom had notified Google of them. Responsibility to find and identify infringing material was the copyright holder’s and not the online service provider’s.

Google has described the victory as important not just for itself but also its millions of users around the world who want to enjoy the benefits that Web 2.0 brings.

The Bill contains these provisions:

• To allow the Government to make laws that could require Internet service providers to cut off the Internet connections of suspected copyright infringers and impose other technical measures on them. The burden of proof would be on the copyright owner to prove that the Internet user’s connection had been used for copyright infringement, and the Internet user would then have a right to appeal, but he would then have to show that he did not commit the infringing act or he took reasonable steps to prevent other people from committing the infringement via his Internet connection. Any introduction of this provision into law would require further scrutiny from Parliament first. The effects would be severe, particularly for whole households who would suffer because of the actions of one teenager or another person living there. People may also suffer if other people use their Internet connection for unlawful activity without their knowledge.
• The courts to have the power to grant orders to ensure that certain web sites are blocked if they satisfied that the sites have been used or are likely to be used in connection with copyright infringement. However, this new measure can only be introduced if Parliament has approved it and if the Government is satisfied that using the Internet for copyright infringement activities has a serious adverse effect on businesses or consumers and the sanctions are not a disproportionate measure. Blocking a particular site would be reserved for the most serious offenders.
• The right for copyright owners to notify ISPs if they suspect that copyright material has been infringed, and to have the right to receive anonymised lists of the Internet Protocol addresses (ie the web addresses) of the computers at the centre of the notifications.

Interestingly, this long-awaited measure for the benefit of the entertainment industry may be a matter of shutting the door after the horse has bolted. In this cat and mouse game, the copyright infringers are already ahead of the game. They may become ever more immune to the measures in this new legislation by increasingly using private networks that do not need a public web site in order to facilitate the file-sharing, and by the use of so-called proxy servers that hide the real identities in order to avoid detection.

Newzbin provided indexing and search services for the Usenet Internet discussion system. Usenet enables people to upload and view messages on a public bulletin board. Usenet was not designed for big files such as films, which need to be split into thousands of small parts. Any user who wants to see the film needs to piece all those bits together. Newzbin made that process much easier for users. They compiled an index of films, had 250 editors who compiled reports of the films and links to other information about the films, and provided a one-click mechanism that enabled premium paying members to readily assemble the work from its component parts without having to spend days doing so. Newzbin claimed that it was ‘content agnostic’ by indexing the entire content of Usenet with providing links where possible and any unlawful activity was done by a user of the hyperlinks.

The High Court had little time for Newzbin’s arguments. It described terms and conditions saying that its editors must not do any act to enable, incite or encourage any unlawful acts and similar terms and conditions for its users as being ‘entirely cosmetic’ and a ‘superficial attempt’ to conceal Newzbin’s purpose. Newzbin’s functionality and categorisation of content and encouragement given to editors to report films meant it had been aware for many years that copyright in the vast majority of films accessed through Newzbin were being infringed.

Newzbin had authorised the infringement. Authorisation went beyond mere enablement, assistance or even encouragement. It meant purporting to grant a right to do something, and that could be express or implied from the relevant circumstances. The circumstances included the nature of the relationship with the primary infringer, whether material supplied was used for the infringement, whether infringement was inevitable, the degree of control retained by the supplier, and whether any steps had been taken to stop infringement. Newzbin fell foul of all of those criteria. A reasonable member would have concluded that Newzbin purported to have the authority to grant the required permission and had sanctioned, approved and countenanced the copying. Newzbin provided a searchable and user-friendly facility for premium paying members, it must have known what users were doing and took no steps to stop it; instead, any contractual restrictions were window dressing.

Authorisation the infringement was sufficient to have liability to the film industry, but the High Court went further and said that Newzbin had also procured the infringement or had a common design to infringe. It went beyond mere facilitation and extended to being so involved with the infringement as to be jointly responsible. The Court said that Newzbin operated a web site designed and intended to make infringing copies of films readily available to premium members, the service was structured so as to promote infringement and inevitably did so, editors had been encouraged and induced to make reports of films, it had encouraged its members to give advice to each other about how to do it, and it had profited from the infringements.

The Court ruled that there had been a third form of copyright infringement. The facility had enabled Newzbin’s premium members to download the films from a place and at a time individually chosen by them, and when doing so the way in which Newzbin’s service worked meant that it had been actively involved with communicating the copyright work to the public by electronic transmission without permission

It was certainly a happy ending for Twentieth Century Fox and the other film makers and distributors in this case, and they will be hoping that there is no twist in the plot in the appeal courts.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This result is not particularly surprising. If Newzbin had been able to get away with what they did, it would have been open season for everyone. The case does not alter the best practice advice for genuine service providers on the Internet who do not wish to profit or encourage intellectual property infringement. They should have a good system in place to enable the reporting and rapid takedown of infringing material, and act on it.

‘There is still no reported UK case on whether web sites simply providing hyperlinks to other sites where infringing material can be found but without doing more or otherwise benefiting would be doing anything wrong. However, I’d be surprised if such a service provider was pulled up if they were simply facilitating a service to users and had no control or intention over what their users do.’