Case No: HC11C04518
Neutral Citation Number: [2012] EWHC 1152 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 2 May 2012

Before :

THE HON MR JUSTICE ARNOLD
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Between :
			
	(1)	DRAMATICO ENTERTAINMENT LIMITED
(2)	EMI RECORDS LIMITED
(3)	MERCURY RECORDS LIMITED
(4)	POLYDOR LIMITED
(5)	ROUGH TRADE RECORDS LIMITED
(6)	SONY MUSIC ENTERTAINMENT UK LIMITED
(7)	VIRGIN RECORDS LIMITED
(8)	WARNER MUSIC UK LIMITED
(9)	679 RECORDINGS LIMITED	Claimants	
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	(1)	BRITISH SKY BROADCASTING LIMITED
(2)	BRITISH TELECOMMUNICATIONS PLC
(3)	EVERYTHING EVERYWHERE LIMITED
(4)	TALKTALK TELECOM GROUP PLC
(5)	TELEFÓNICA UK LIMITED
(6)	VIRGIN MEDIA LIMITED	Defendants	

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Ian Mill QC, Edmund Cullen QC and Tom Richards (instructed by Forbes Anderson Free) made written submissions on behalf of the Claimants

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Judgment
MR JUSTICE ARNOLD : 
Introduction
1.	The Claimants are record companies claiming on their own behalf and in a representative capacity on behalf of the other members of BPI (British Recorded Music Industry) Ltd and Phonographic Performance Ltd. The Defendants are the six main retail internet service providers. Between them they have a fixed line market share of some 94% of UK internet users. By this claim the Claimants seek an injunction against the Defendants pursuant to section 97A of the Copyright, Designs and Patents Act 1988 (“the 1988 Act”), which implements Article 8(3) of 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”), requiring the Defendants to take measures to block or at least impede access by their customers to a peer-to-peer file-sharing website called The Pirate Bay (“TPB”). The claim is supported by PRS for Music, the Motion Picture Association, the Publishers Association, UK Interactive Entertainment and the Producers’ Alliance for Cinema and Television. 
2.	In Twentieth Century Fox Film Corp v British Telecommunications plc [2011] EWHC 1981 (Ch), [2011] RPC 28 (“20C Fox v BT”) I held that the Court had jurisdiction, and that it was appropriate to exercise my discretion, to make a blocking order against the Second Defendant (“BT”) with respect to a website called Newzbin2. In Twentieth Century Fox Film Corp v British Telecommunications plc (No 2) [2011] EWHC 2714 (Ch) (“20C Fox v BT (No 2)”) I determined the terms of that order.
3.	In an earlier judgment in these proceedings handed down on 20 February 2012 [2012] EWHC 268 (Ch) (“the First Judgment”), I held that both users and the operators of TPB infringe the copyrights of the Claimants (and those that they represent) in the UK. Since then, the Claimants have agreed the terms of orders under section 97A of the 1988 Act with five of the Defendants. The Third Defendant (“Everything Everywhere”) consented to an order in the agreed terms, while the First, Fourth, Fifth and Sixth Defendants (“Sky”, “TalkTalk”, “O2” and “Virgin”) stated that they did not oppose the making of orders in the agreed terms. Having considered the matter on paper, on 27 April 2012 I made orders in the agreed terms. These are my reasons for doing so. References to “the Defendants” below are references to the Defendants other than BT. 
Jurisdiction
4.	Section 97A of the 1988 Act empowers the High Court “to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright”. I have already held that both users and the operators of TPB infringe copyright. In order for this Court to have jurisdiction to make the orders sought by the Claimants, three further matters must be established. First, that the Defendants are “service providers” within the meaning of section 97A. Secondly, that users and/or the operators of TPB use the Defendants’ services to infringe copyright. Thirdly, that the Defendants have actual knowledge of this.
5.	So far as the first matter is concerned, I am in no doubt that the Defendants are service providers within the meaning of regulation 2 of the Electronic Commerce (EC Directive) Regulations 2002, SI 2002/2013, and hence within the meaning of section 97A of the 1988 Act. None of the Defendants has suggested otherwise. 
6.	As to the second matter, I am satisfied that both users and the operators of TPB use the Defendants’ services to infringe for similar reasons to those which I gave in 20CFox v BT at [99]-[113]. In this connection, I note that the evidence of Mr Sehested (as to which, see the First Judgment at [41]-[42]) was that, out of 3,299,337 instances where an IP address for a device connected to the internet and making available sound recordings from a list of 15,000 titles using an internet service provided by one of the Defendants had been identified, 970,529 instances related to Virgin, 386,268 to TalkTalk, 596,872 to Sky, 439,181 to Everything Everywhere and 6,363 to O2. (Mr Sehested explains that his company monitored instances relating to O2 for a much shorter period than the other Defendants, which explains the lower total.) 
7.	With regard to the third matter, the Claimants contend that the Defendants have acquired actual knowledge in three ways. First, Kiaron Whitehead, General Counsel of the BPI, and Mr Sehested give evidence of notifications of infringements provided to each of the Defendants. Secondly, the Defendants are aware of the contents of the Claimants’ evidence in support of this claim. Thirdly, the Defendants are aware of my findings in the First Judgment. I am satisfied that, as a result, the Defendants do have actual knowledge that users and the operators of TPB use the Defendants’ services to infringe copyright. Furthermore, I note that none of the Defendants denies this.
8.	For completeness, I would add the following. One of the arguments advanced by BT in 20C Fox v BT was that the order sought by the applicants in that case would be contrary to Article 10 of the European Convention on Human Rights. I did not accept that argument for the reasons I gave at [163]-[177]. In so holding, I distinguished the reasoning of Advocate General Villalón in his Opinion dated 14 April 2011 in Case C-70/10 Scarlet Extended SA v Société belge des auteurs compositeurs et éditeurs (SABAM). Since then, the Court of Justice of the European Union has delivered its judgment in that case on 24 November 2011 [2011] ECR I-0000 and its judgment in Case C-360/10  Société belge des auteurs compositeurs et éditeurs (SABAM) v Netlog NV on 16 February 2012 [2012] ECR I-0000. I have considered those judgments with care, but I do not believe they call into question any of my reasoning in 20C Fox v BT. In particular, I have considered whether it makes any difference if, instead of asking whether the order would be contrary to Article 10 ECHR, it is asked whether the order would be contrary to Article 11 of the Charter of Fundamental Rights of the European Union (“the Charter”), as suggested by those judgments. I do not believe that that would make any difference.               
Discretion
9.	The Claimants contend that I should exercise my discretion to make the orders sought. Unlike in 20C Fox v BT, the Defendants do not advance any reasons as to why I should exercise my discretion to refuse to make the orders sought. Even so, as the Claimants rightly accept, the onus remains on the Claimants to satisfy the Court that it is appropriate to make such orders, and in particular that the orders are proportionate.
10.	As I noted in Golden Eye (International) Ltd v Telefónica UK Ltd [2012] EWHC 723 (Ch) at [116], there are two reasons why it is necessary to consider the proportionality of orders in this field. The first is that Article 3(2) of European Parliament and Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights (“the Enforcement Directive”) imposes a general obligation to consider the proportionality of remedies for the infringement of intellectual property rights: see Case C-324/09 L’Oréal SA v eBay International AG [2011] ECR I-0000 at [139]-[144]. The second is that the CJEU has held that, when adopting measures to protect copyright owners against online infringement, national courts must strike a fair balance between the protection of intellectual property rights guaranteed by Article 17(2) of the Charter and the protection of the fundamental rights of individuals who are affected by such measures, and in particular the rights safeguarded by the applicable Articles of the Charter: see Case C-275/06 Productores de Música de España (Promusicae) v Telefónica de España SAU [2008] ECR I-271 at [61]-[68] and Scarlet v SABAM at [42]-[46], [50]-[53].
11.	As I noted in Golden Eye at [120], where (as here) the terms of the orders have been negotiated between the parties, and those parties are professionally represented, then it may be assumed that the orders are proportionate as between the parties; but it does not necessarily follow that they are proportionate as between the Claimants and users of the Defendants’ services. Accordingly, it is the duty of the Court not simply to rubber stamp the terms agreed by the parties, but independently to consider the proportionality of the proposed orders from the perspective of individuals affected by them who are not before the Court.
12.	Having undertaken that exercise, I am satisfied that the orders sought are proportionate for similar reasons to those given in 20C Fox v BT at [199]-[200]. Indeed, I consider that the present case is, if anything, a stronger one for the making of such orders for the reasons indicated in the First Judgment at [21]-[29] and [75]-[81].
The terms of the orders
13.	As noted above, the detailed terms of the orders have been agreed by the Defendants. It is therefore not necessary for me to set out or analyse them in this judgment. One point is nevertheless worthy of mention. Mr Walsh’s report (as to which, see the First Judgment at [19]) drew attention to one particular method by which BT’s Cleanfeed system (as to which, see 20C Fox v BT at [70]-[73]), the use of which was required by the order I made in 20C Fox v BT, could be circumvented (as to which, see 20C Fox v BT at [192]-[198]). As Mr Walsh explained, it is straightforward to prevent that method of circumvention by using IP address blocking. IP address blocking is generally only appropriate where the relevant website’s IP address is not shared with anyone else. If it is shared, the result is likely to be overblocking (see 20C Fox v BT (No 2) at [6]). In the present case, however, TPB’s IP address is not shared. Thus IP address blocking is appropriate. Accordingly, the Defendants have agreed to orders which require IP address blocking, although the specific technical means to be employed varies from Defendant to Defendant.