Online Service Provider Liability - Key Developments In A New Sphere Of Copyright Enforcement

IP owners have sometimes found efforts to prevent online infringement of their rights expensive, time consuming and of limited effectiveness. Online infringers may enjoy a high degree of anonymity, can base themselves in hard to reach jurisdictions, and can disappear easily, making enforcement difficult.

This has caused IP owners to seek alternative ways to enforce their rights. One such method involves forcing ISPs, or other online service providers, to block access to infringing material over their services.

This note summarises the key cases in this area to date and the main points which can be drawn from them. It is not intended to provide an in-depth analysis of the decisions reached in the cases citied, or the legislation governing this area.

Key legislation

The E-Commerce Directive1 protects online service providers in the EU from claims of IP infringement where they do not control the content on their systems. The defence is often called the mere conduit defence as, in order to qualify, service providers must have had no involvement in the infringing act, other than the passive provision of their services. Similar defences exist in other major jurisdictions.

However, EU member states are required to provide rights holders with the ability to seek orders compelling service providers to terminate or prevent specific instances of IP infringement. But this is counterbalanced by provisions which prohibit member states from implementing legislation which would place on service providers a general obligation to monitor information transmitted through or stored on their networks by their users.

In the UK, the availability of injunctions against ISPs is enacted through section 97A of the Copyright Design and Patents Act 1988 ("Section 97A"). This provision allows rights holders to seek injunctions against internet service providers which have actual knowledge that their users are using their services to commit copyright infringement.

Development of the right in the UK: Newzbin 12 and 23

The first cases to test section 97A in the UK involved claims brought by a group of major film studios in connection with a website accused of major copyright infringement.

Newzbin was a UK registered company that provided an online indexing facility which allowed fee paying users to search 'Usenet' (in simple terms, an amalgamation of email and internet forums) for content including music, movies, TV shows, and computer software, which could then be downloaded. The claimant film companies (the "Studios") alleged that Newzbin was liable for copyright infringement in its own right. In its defence, Newzbin argued that it was effectively a search-engine and could claim the mere conduit defence; therefore, any copyright infringement was the sole responsibility of the parties sharing and downloading pirated material from Usenet.

In its judgment the Court found Newzbin liable for copyright infringement and granted an injunction against Newzbin requiring it to cease offering content belonging to the Studios. The injunction was ordered to restrain Newzbin itself from infringing the Studio's copyright; however the Judge hinted that such an injunction could have been granted under Section 97A against Newzbin as a service provider.

Newzbin 1...