Newzbin is a members-only Usenet indexing website that effectively operated a P2P network by indexing and collating Usenet files relating to particular works or films (see box “What is Usenet?”). Its index listed these files by the name of the film or work and provided reports by Newzbin’s team of editors, giving information about the work.

Newzbin’s premium members could search its indices, and could also, at the press of a button, create files containing all the information needed to re-create an original work ready to view onscreen or burn onto a DVD, aggregating all the individual Usenet messages containing tiny components of the overall work.

A number of film makers and distributors, including Twentieth Century Film Corporation, issued proceedings against Newzbin Limited for copyright infringement. The court held resoundingly in favour of the claimants:

Authorising acts of infringement. This case was the first in which the UK courts had considered how authorising infringement of copyright applies in an internet context (section 16, Copyright, Designs and Patents Act 1988) (CDPA).

While there have been successful claims against P2P networks in the US and Australia, the House of Lords’ ruling in CBS Songs Ltd and ors v Amstrad Consumer Electronics Plc had the potential to frustrate claimants attempting to hold P2P networks liable for copyright infringement in the UK ([1988] 1 AC 1013). In that case, Amstrad (which marketed a tape-to-tape stereo system) successfully defended a claim that it had authorised copyright infringement, arguing that it lacked the requisite knowledge of, or control over, the individual users.

Considering the Amstrad case, the court held that "authorisation" means the grant (or purported grant) of the right to do the act complained of, and does not extend to mere enablement, assistance or encouragement. Various factors must be taken into account, such as: the nature of the relationship between the authoriser and the infringer; whether it is inevitable that the service will be used to infringe copyright; and whether the defendant has taken any steps to prevent the infringement.

However, the judge held that, on the facts, the Newzbin members were given ready access to commercial films, detailed information about the films and details about how to download them. Newzbin had encouraged its members to make reports on films, had taken no steps to remove members who posted reports on infringing material, and was therefore authorising its members to infringe the claimants’ copyright.

Procuring/entering into a common design to infringe. The court held that mere assistance in infringement was not enough, and in order for a joint tortfeasor to have made the tort "his own", he or she must have induced, incited or encouraged the primary infringer to participate in the infringing act. However, for the reasons cited in relation to authorising acts of infringement (see above), and because Newzbin was found to have provided advice to its members on how best to locate and catalogue infringing material, the court found for the claimants on this point.

Communicating copyright works to the public. The claimants argued that Newzbin made their films available to the public by electronic transmission and that members of the public could access such films from a place and at a time convenient to them (in contravention of section 20, CDPA).

Newzbin claimed that its website was akin to a search engine such as Google and was therefore "content agnostic", so that Newzbin merely provided an indexing service as an intermediary and played no part at all in the infringing activity. The court disagreed with Newzbin and found that its members would have considered that Newzbin was making the films available to them.

Service provider with actual knowledge of infringement. In the alternative, the claimants had sought an injunction against Newzbin on the grounds that it was a service provider with actual knowledge of other persons using its service to infringe copyright (section 97A, CDPA). Although Newzbin accepted that it was a service provider within the meaning of section 97A, the court held that Newzbin had not had actual knowledge of infringement and so it could not grant an injunction on these grounds in sufficiently certain terms.

Remedies. The court ordered an injunction against Newzbin, as well as an enquiry as to damages. This included additional damages for flagrancy, under section 97 of the CDPA, as the court considered that Newzbin had known full well that the vast majority of the materials relating to films were commercial and so likely to be protected by copyright, and that the users of Newzbin who downloaded those materials were infringing that copyright.

This decision, in combination with the 2010 Act (which empowers the Secretary of State for Business to order the blocking of internet locations which the courts are satisfied have been, are being or are likely to be used for or in connection with an activity that infringes copyright), will now make it easier for copyright owners to take action against organisations or individuals that enable others to infringe copyright.

Dan Caunt is an associate at Osborne Clarke.