Sony Music Entertainment (Irl) Ltd v UPC Communications Irl Ltd (No 2)

• Jurisdiction: Ireland
• Judge: Mr. Justice CREGAN
• Judgment Date: 21 May 2015
• Neutral Citation: [2015] IEHC 386
• Date: 21 May 2015
• Court: High Court
• Docket Number: [2014 No. 806 P] [2014 No. 13 COM]

[2015] IEHC 386

HIGH COURT

COMMERCIAL

Cregan J.

[2014 No. 806 P]

[2014 No. 13 COM]

BETWEEN

SONY MUSIC ENTERTAINMENT (IRELAND) LIMITED

UNIVERSAL MUSIC IRELAND LIMITED

WARNER MUSIC IRELAND LIMITED

PLAINTIFFS

AND

UPC COMMUNICATIONS IRELAND LIMITED (No. 2)

DEFENDANTS

Intellectual Property – Infringement of copyrights – The Copyright Directive-2001/29 – Art. 1 (3a) of the Framework Directive 2002/21/EC – Graduated response injunction – Norwich pharmacal orders – Internet piracy – Amortisation of costs

Facts: Following the judgment of the Court granting an injunction to the plaintiffs for violation of their copyrights by the Internet subscribers of the defendant, the parties now sought orders as to how to effectuate the said order given the differences of opinions that existed for its implementation. The plaintiffs called for appointment of an independent adjudicator for fair and impartial procedures under art. 1 (3a) of the Framework Directive 202/21/EC while the defendants asserted for directly moving to Norwich pharmacal procedures.

Mr. Justice Cregan granted an order to the defendant for direct implementation of Norwich pharmacal procedures without the intervention of an independent adjudicator. The Court held that it would be in the interest of justice and quick disposal of the case that the issues should be resolved amicably and at the earliest. The Court held that the graduated response system injunction was sought against the non-business users of the defendant's network and as such the business users would only be given educational letter in order to resist them from committing Internet piracy. The Court observed that there would not be any need for a perpetual injunction in the matter as it would put unnecessary costs to the parties and the injunction imposed would remain in force for a period of five years with liberty to approach the Court for any modification. The Court held that the plaintiffs would pay 20% of the defendant's capital cost and expenditure for over a period of five years.

JUDGMENT of Mr. Justice CREGAN delivered the 21st day of May, 2015

Introduction

1 On 27th March, 2015, I delivered my substantive judgment in this matter. This judgment is supplemental to that judgment. A number of issues were held over for further submissions. In particular I sought further submissions from the parties on the issue of whether there should be an independent arbitrator as well as Norwich Pharmacal Orders. There were also other matters which were the subject of an exchange of correspondence between the parties.

2 Unfortunately this exchange of correspondence between the parties, instead of narrowing the issues, seemed to enlarge them. New issues emerged which then became the subject of detailed correspondence. It appeared as if there was little or no agreement between the parties on any of the supplemental issues. Indeed even on the issue of 'liberty to apply' there appeared to be disagreement between the parties about when such an application could be invoked. The result of this exchange of correspondence about the form of the draft order meant that both parties (for their own reasons) seemed to envisage an order of immense complexity which is completely unnecessary on the facts of this case.

3 The essence of the injunction which I have granted against the defendant is that the defendant should write two cease and desist letters to its customers (who are engaged in copyright infringement on the defendant's internet service) and that the defendant should tell the plaintiff when it receives a notification that one such customer has committed a third infringement. The defendant has always indicated that it would consent to any Norwich Pharmacal type applications brought by the plaintiffs against the defendant. It is completely unnecessary, in my view, to set out an appendix to the order detailing what should be in each of these communications. What should be contained in these letters to its subscribers is clear from the judgment.

4 I turn now to consider the issues which were raised in the hearing before me.

Whether there should be an independent adjudicator

5 During the course of the hearing, the plaintiffs, in the exchange of correspondence between the parties, raised the issue of whether an independent adjudicator – not arbitrator – could be appointed who might review all correspondence in relation to a particular subscriber and who might make a decision in respect of that subscriber as to whether his/her internet service connection should be suspended or terminated. The purpose of such an adjudicator was to comply with the provisions of Article 1 (3a) of the Framework Directive 2002/21/EC which provides that 'a prior, fair and impartial procedure shall be guaranteed, including the right to be heard of the person or persons concerned.....'

6 This suggestion by the plaintiffs appeared to have been given a guarded and reserved welcome by the defendant who submitted that the idea seemed to have some merit but that they wished to reserve their position. Subsequently however the idea faded away. I indicated in my judgment that the idea seemed to have some merit but that I would hold over for further submissions the exact interplay between the appointment and role of an independent adjudicator and the issue of Norwich Pharmacal orders. I did not, in my first judgment, make any decision that an independent adjudicator should form part of the court injunction but rather that I saw certain merit in that idea and that I would leave it over for further submissions. This was because the issue had not been fully argued before me.

7 Mr. McDowell SC, for the plaintiffs, submitted that the plaintiffs could operate the Graduated Response System with the Norwich Pharmacal orders but that they would prefer an independent adjudicator. His arguments in favour of the appointment of such an adjudicator were (i) that it would fulfil the requirements of Article 1 (3a) of the Framework Directive that there should be a prior, fair and impartial procedure, (ii) that it would be a more efficient use of the plaintiffs', the defendant's, and indeed the subscriber's time and resources than proceeding straight to court to obtain a Norwich Pharmacal order, (iii) that the Norwich Pharmacal procedure might be more severe on the defendant's subscribers, (iv) that it would be better for the courts if the courts did not have to deal with numerous Norwich Pharmacal applications and that it would be preferable to avoid a court based solution if possible. All of these submissions, in my view, have considerable force.

8 Mr. Ferriter SC, on behalf of the defendant, however argued that the defendant believed that it was fairer for all parties and the subscribers that the procedure should move directly to a Norwich Pharmacal procedure. He submitted that Article 1 (3a) of the Framework Directive not only required that a prior, fair and impartial procedure shall be guaranteed but also that the 'right to effective and timely judicial review' should be guaranteed also. In the defendant's view, the appointment of an independent adjudicator, followed, if necessary, by a Norwich Pharmacal type procedure established an overly complex and bureaucratic layer to the entire process. It set out two elements in the suspension/termination process when there only needed to be one. If the independent adjudicator process did not work in respect of particular subscribers, then the process would have to move to the Norwich Pharmacal procedure in any event. In the defendant's view, it would be better if it moved directly to the Norwich Pharmacal procedure and skipped the independent adjudicator process. He also submitted that the establishment of an independent adjudicator would mean that detailed...