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Film studios thrash BT in Newzbin site-block test case

Who comes out of this looking worse?

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Analysis In a landmark test case, the High Court in the UK has ordered BT to block access to the pirate site Newzbin2. The site makes movies, music and applications available and describes itself as "the Google of Usenet". It's a stunning victory for six major Hollywood film studios who brought the case, with counsel from the Motion Picture Association.

In addition to rejecting five planks of BT's argument, Justice Arnold declined to refer the case to European Courts.

So what happened?

Rights-holders stated that the site – originally Newzbin – makes £1m a year from 700,000 members, but holds no licences. A judge has agreed BT is responsible under section 97A of the Copyright Act to take direct action to block the site. In doing so, he rejected much of the protection ISPs thought they had enjoyed – and had presumed extended to them under European Human Rights legislation. Appeals are bound to follow – but movie studios have already said that victory in Newsbinz2 would lead to further cases against UK ISPs and service providers.

The effects on internet policy across both industries are significant: but let's digest the arguments first.

Justice Arnold ruled:

"BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newzbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes; it knows that the users of Newzbin2 include BT subscribers; and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2."

Arnold added that he was aware that this is a test case.

"The Studios have made it clear that this is a test case: if they are successful in obtaining an order against BT, then they intend to seek similar orders against all the other significant ISPs in the UK. The other ISPs were invited to intervene in the present application if they so wished, but have not done so."

What's interesting is that how many planks of BT's defence were kicked away. The leading defence is that it has no responsibility to act against copyright infringement, rejecting the "mere conduit" defence, which states that serving IP packets was much like the Royal Mail delivering pirate DVDs by post. Not our problem, guv.

In throwing this out, Arnold pointed out that European law rejected ISPs' claims that they were not "intermediaries", nor "service providers". He also rejected the proposition that "operators of Newzbin2 do not use the service to infringe copyright".

And the idea that BT subscribers who were Newzbin2 members were "mere passive recipients of infringing material" was also given the boot. "On the contrary," writes Arnold, "they actively download the material in the manner described above. I therefore conclude that the users do use BT's service to infringe the Studios' copyrights."

Also slung out, in an interesting way, was BT's denial that the ISP had "actual knowledge" of infringement on their service. The Studios argued that the "actual knowledge" came from the E-Commerce Directive and it was not open for EU member states to impose conditions on it that might prevent, in this case, copyright-holders pressing for injunctions.

"The question here is whether, when a BT subscriber who is a member of Newzbin2 visits the Newzbin2 website, downloads an NZB file and then downloads an infringing copy of a film or a television programme, that subscriber is using BT's service to infringe copyright. BT contends that the subscriber is not using its service, but the service provided by Newzbin2. In my view this is a false dichotomy... The subscriber may be using both services to infringe."

BT quoted the Digital Economy Act in its defence, which the judge did not like.

Judge Arnold said he believed site-blocking was proportionate, with the Human Rights Act's Article 1 – which protects the property rights of creators – outweighing Article 10's rights of free expression claimed on behalf of Newsbinz2 members, and BT.

So with website-blocking already in legislation, but ISPs and copyright holders being urged by the government to come up with a private, voluntary replacement for the site-blocking clauses – where does the judgement leave everyone?

It undoubtedly puts fresh momentum behind the rights-holders, and comprehensively shoots down many of the common defences raised by ISPs. Arguing "human rights" is a two-way street. Given what's at stake – and ISPs' taste for litigation – Arnold's ruling is sure to be challenged. The fundamental battle between property rights and freedom of expression isn't going to go away.

It's fascinating to hear arguments such as BT's contention that it is not an internet service provider, or that Newzbin2 members were passive recipients, and just happened to have anime and pirate movies pop onto their PCs ... or that after notification from a copyright-holder, an ISP could claim that it hadn't been notified. These are surreal arguments.

The voluntary plan at meetings chaired by Culture Minister Ed Vaizey – one floated by publishers, music and movie industries and the Premier League – permits speedy judicial review of site-blocking on a site-by-site basis. BT was the strongest opponent in those talks – perhaps hoping for a favourable decision from Arnold.

That hasn't been forthcoming.

Site-blocking not only runs contrary to the classic liberal spirit of English law – I have seen no exemption mooted for journalists or researchers – but it also has another consequence. It makes rights-holders look like they're keener on legislation than on creating new markets for content. Despite a smashing victory, they should be careful what they wish for. ®

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