Sony Music Entertainment Ireland Ltd v UPC Communications Ireland Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Gerard Hogan
• Judgment Date: 28 July 2016
• Neutral Citation: [2016] IECA 231
• Judgment citation (vLex): [2016] 7 JIC 2804
• Court: Court of Appeal (Ireland)
• Docket Number: No. 2015, 338,[C.A. No. 338 of 2015]
• Date: 28 July 2016

[2016] IECA 231

Court of Appeal

[C.A. No. 338 of 2015]

Sony Music Entertainment (Ireland) Limited, Universal Music Ireland Limited and Warner Music Ireland Limited

Plaintiffs

and

UPC Communications Ireland Limited

Defendant

Cian Ferriter S.C. (with him Paul Coughlan) for the defendants.

Michael McDowell S.C. and Jonathan Newman S.C. for the plaintiffs.

Cur. adv. vult.

Cases mentioned in this report:—

Albion Properties Ltd. v. Moonblast Ltd. [2011] IEHC 107, [2011] 3 I.R. 563; [2012] 1 I.L.R.M. 439.

Kiriaki Angelidaki and Others v. Organismos Nomarkhiaki Aftodiikisi Rethimnis and Dimos Geropotmou (Case C-378/07 to C-380/07) [2009] E.C.R. I-3071; [2009] 3 C.M.L.R. 571.

Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v. Netlog NV (Case C-360/10) [2012] 2 C.M.L.R. 577.

C.B.S. Inc. v. Ames Records Ltd. [1982] Ch. 91; [1981] 2 W.L.R. 973; [1981] 2 All E.R. 812.

C.B.S. Songs Ltd. v. Amstrad Plc. [1988] A.C. 1013; [1988] 2 W.L.R. 1191; [1988] 2 All E.R. 484.

T.D. v. Minister for Education [2001] 4 I.R. 259

Douglas v. Hello! Ltd. [2001] Q.B. 967; [2001] 2 W.L.R. 992; [2001] 2 All E.R. 289.

EMI Records (Ireland) Limited v. UPC Communications Ireland Limited [2010] IEHC 377, (Unreported, High Court, Charleton J., 11 October 2010).

Grant v. Roche Products (Ireland) Ltd. [2008] IESC 35, [2008] 4 I.R. 679.

Hanrahan v. Merck Sharp & Dohme [1988] I.L.R.M. 629.

Healy v. Stepstone Mortgage Funding Limited [2014] IEHC 134, (Unreported, High Court, Hogan J., 19 March 2014).

L'Oréal SA and Others v. eBay International AG and Others (Case C-324/09) [2011] E.C.R. I-6011.

Criminal proceedings against Lyckeskog (Case C-99/00) [2002] E.C.R. I-4839; [2004] 4 C.M.L.R. 593.

Marleasing SA v. La Comercial Internacional de Alimentación SA (Case C-106/89) [1990] E.C.R. I-4135; [1992] 1 C.M.L.R. 305.

Meskell v. Coras Iompair Éireann [1973] I.R. 121.

People over Wind v. An Bord Pleanála [2015] IECA 272, (Unreported, Court of Appeal, 20 November 2015).

Phonographic Performance (Ireland) Ltd. v. Cody [1998] 4 I.R. 504; [1998] 2 I.L.R.M. 21.

Prince Albert v. Strange (1849) 64 E.R. 293, 2 De. G. & Sm. 652.

Productores de Música de España (Promusicae) v Telefónica de España SAU (Case C-275/06) [2008] E.C.R. I-271; [2008] 2 C.M.L.R. 465.

M.R. and D.R. (minors) v. An tArd Chláraitheoir [2014] IESC 60, [2014] 3 I.R. 533.

Scarlet Extended SA v. Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) (Case C-70/10) [2011] E.C.R. I-11959.

Sony Music Entertainment (Ireland) Limited v. UPC Communications (Ireland) Limited [2015] IEHC 317, (Unreported, High Court, Cregan J., 27 March 2015).

The State (Quinn) v. Ryan [1965] I.R. 70; (1966) 100 I.L.T.R. 105.

UPC v. Constantin (Case C-314/12) [2014] I.P. & T. 438; [2014] Bus. L.R. 541.

Determinations of the Supreme Court mentioned in this report:-

Dowling v. Minister for Finance [2016] IESCDET 40, (Unreported, Supreme Court, 10 May 2016).

Intellectual property — Copyright — Injunction — Infringement of copyright by internet subscribers — Non-infringing internet service provider — Remedies — Graduated response system — Whether jurisdiction to grant injunction against non-infringing internet service provider — Whether jurisdiction to grant injunction against person who committed no legal wrong — Whether order necessary — Whether costs involved excessive or disproportionate — Whether order unduly complicated — Whether cost-sharing proposals fair and reasonable — Whether order respecting fundamental rights of parties affected — Whether duration of order and provisions for review reasonable — Copyright and Related Rights Act 2000 (No. 28), s. 40(5A) — Directive 2000/31/EC, article 15 — Directive 2001/29/EC, article 8 — Directive 2002/21/EC, article 1(3a) — Directive 2004/48/EC, articles 3 and 11.

Appeal from the High Court

The facts have been summarised in the headnote and are more fully set out in the judgment of Hogan J., infra.

The proceedings commenced by way of plenary summons dated 23 January 2014. By order dated 17 June 2015, the High Court (Cregan J.) directed that the defendant take certain steps to prevent the use of its internet service by subscribers for the purposes of infringing the copyright of the plaintiffs.

By notice of appeal dated 2 June 2015, the defendant appealed to the Court of Appeal from the order of the High Court. The appeal was heard by the Court of Appeal (Finlay Geoghegan, Hogan and Faherty JJ.) on 31 May and 1 June 2016.

Section 40(5A) of the Copyright and Related Rights Act 2000 provides:-

• “(a) The Owner Of The Copyright In A Work May, In Respect Of That Work, Apply To The High Court For An Injunction Against An Intermediary To Whom Paragraph 3 Of Article 8 Of Directive 2001/29/ec Of The European Parliament And Of The Council Of 22 May 2001 On The Harmonisation Of Certain Aspects Of Copyright And Related Rights In The Information Society Applies.

• (b) In Considering An Application For An Injunction Under This Subsection, The Court Shall Have Due Regard To The Rights Of Any Person Likely To Be Affected By Virtue Of The Grant Of Any Such Injunction And The Court Shall Give Such Directions (including, Where Appropriate, A Direction Requiring A Person Be Notified Of The Application) As The Court Considers Appropriate In All Of The Circumstances.”

The plaintiff record companies complained that subscribers to the internet service provided by the defendant were using that service to illegally download recordings in which the plaintiffs held the copyright. The plaintiffs applied to the High Court for an order requiring the defendant to take steps to prevent its subscribers from using the service to breach the copyright of the plaintiffs. The High Court (Cregan J.) granted the relief sought in the form of an injunction requiring the defendant to implement a “graduated response system” against infringing subscribers (see [2015] IEHC 317).

The defendant appealed to the Court of Appeal, arguing that the court had no jurisdiction to grant the order made and that the making of such an order was more appropriate to a specialist regulator as the courts were required only to make judgments based on legal rights.

Held by the Court of Appeal (Finlay Geoghegan, Hogan and Faherty JJ.), in dismissing the appeal subject to making minor variations to the order of the High Court, 1, that in order to be granted an injunction against a non-infringing internet service provider, a rightholder was obliged to establish that (i) the order was necessary; (ii) the costs involved were not excessive or disproportionate and the order was not unduly complicated; (iii) the cost-sharing proposals were fair and reasonable; (iv) the order respected the fundamental rights of the parties affected, including internet users; and (v) the duration of the proposed order and the provisions for review were reasonable.

L'Oréal SA and Others v. eBay International AG and Others (Case C-324/09) [2011] E.C.R. I-6011, Scarlet Extended SA v. Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) (Case C-70/10)[2011] E.C.R. I-11959, Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v. Netlog NV (Case C-360/10)[2012] 2 C.M.L.R. 577 and UPC v. Constantin (Case C-314/12)[2014] I.P. & T. 438 applied.

2. That the proper interpretation of s. 40(5A) of the Copyright and Related Rights Act 2000 was that it empowered the High Court to grant an injunction in aid of rightholders against non-infringing internet service providers that had committed no legal wrong.

Marleasing SA v. La Comercial Internacional de Alimentación SA (Case C-106/89) [1990] E.C.R. I-4135; [1992] 1 C.M.L.R. 305 considered.

3. That article 8(3) of Directive 2001/29/EC did not merely allow rightholders to apply for an injunction against non-infringing internet service providers but potentially changed the substantive law by requiring member states to authorise their judicial systems to grant injunctive relief, subject to certain safeguards.

L'Oréal SA and Others v. eBay International AG and Others (Case C-324/09) [2011] E.C.R. I-6011, Scarlet Extended SA v. Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) (Case C-70/10)[2011] E.C.R. I-11959, Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v. Netlog NV (Case C-360/10)[2012] 2 C.M.L.R. 577 and UPC v. Constantin (Case C-314/12)[2014] I.P. & T. 438 considered.

4. That although the injunction granted was a highly prescriptive mandatory order which did not involve the traditional administration of justice as it was granted against a non-infringing party and not by reference to established legal rights and wrongs, the European Union legislator had vested that jurisdiction in the national courts and it was not for the court to look behind that policy choice.

T.D. v. Minister for Education [2001] 4 I.R. 259 considered.

5. That where traditional remedies against infringers were all but pointless, a dissuasive order that was likely to be effective in deterring future infringements would satisfy the requirement of necessity.

UPC v. Constantin (Case C-314/12) [2014] I.P. & T. 438 applied. Scarlet Extended SA v. Société belge des auteurs, compositeurs et éditeurs SCRL (SABAM) (Case C-70/10)[2011] E.C.R. I-11959 considered.

6. That while the remedy was complex and costly, it was not disproportionate or unnecessary given the multi-faceted nature of the problem, the fact that no other technical solution was realistically possible and the measure of the sums involved against the gross turnover and profit of the service provider. Furthermore, cost-sharing proposals were reasonable and proportionate in circumstances where internet service providers benefited indirectly from the infringing activities of their subscribers.

7. That the injunction respected the fundamental rights of subscribers. Any subsequent applications for Norwich Pharmacal orders against subscribers would meet the...