Sony Music Entertainment (Irl) Ltd and Others v UPC Communications Irl Ltd (No 1)

• Jurisdiction: Ireland
• Judge: Mr. Justice CREGAN
• Judgment Date: 27 March 2015
• Neutral Citation: [2015] IEHC 317
• Court: High Court
• Date: 27 March 2015

[2015] IEHC 317

HIGH COURT

[No. 806 P/2014]

[No. 13 COM/2014]

Sony Music Entertainment (Irl) Ltd & Ors v UPC Communications Irl Ltd (No 1)

COMMERCIAL

BETWEEN

SONY MUSIC ENTERTAINMENT (IRELAND) LIMITED

UNIVERSAL MUSIC IRELAND LIMITED

WARNER MUSIC IRELAND LIMITED

PLAINTIFFS

AND

UPC COMMUNICATIONS IRELAND LIMITED (No. 1)

DEFENDANTS

Intellectual Property – Infringement of copyrights – The Copyright Directive-2001/29 – The Intellectual Property Rights Enforcement Directive – Directive 2004/48 – The Framework Directive – Directive 2002/21 (as amended by Directive 2009/140 and by regulation 544/2009 – Graduated response injunction – Norwich orders – Internet piracy

Facts: The plaintiffs sought an order for graduated response injunction wherein a step by steps approach was adopted to stop the subscribers of the defendant from illegally download music. The defendant contended that the steps that required from him to suspend or terminate the services of the subscribers were contrary to the contractual obligations. The defendant though admitting to the internet theft of plaintiffs' copyright in music on the defendant's network emphasized compliance of art. 3a of the framework guaranteeing prior, fair and impartial procedure.

Mr. Justice Cregan granted an order for graduated response injunction to the plaintiffs. The Court held that the copyrights are the constitutional rights of the plaintiffs. The Court held that such an injunction would strike a balance of convenience as it would protect the rights of the plaintiffs without interfering in the conduct of the business of the defendant. The Court observed that the injunction would be remedial in nature and would operate to cease the offenders from doing such illegal activities and the cost of which would not be bear by the defendant exclusively. The Court however agreed with the contention of the defendant that steps that called for suspension or termination of the services of the subscribers would breach art. 3a of framework, which in the Court's opinion would be remedied by an appointment of an impartial arbitrator for looking the concerned objection arising therein. The Court suggested that the use of Norwich orders could also provide a solution to redress the alleged grievance.

1 JUDGMENT of Mr. Justice CREGAN delivered the 27th day of March, 2015

Table of Contents

INTRODUCTION	4
(i) The issue	4
(ii) Nature of the relief sought- A graduated response strategy	5
THE EVIDENCE	9
(i) Statement of agreed facts	10
(ii) The plaintiffs' evidence	25
(iii) The defendant's evidence	36
(iv) Agreement between UPC and its customers	47
(v) The defendant's acceptable user policy	51
THE LEGAL CONTEXT	56
(i) Introduction - The European Directives	56
(ii) The E- Commerce Directive (2000/31/EC)	56
(iii) The Copyright Directive ( Directive 2001/29/EC)	59
(iv) The IPR Enforcement Directive ( Directive 2004/48/EC)	61
(v) The Framework Directive ( Directive 2002/21/EC)	65
(vi) Provisions in the directives which govern the scope of injunctions	67
(vii) Irish legislation	70
(viii) Constitutional rights of plaintiffs	73
(ix) Review of case - law	74
ASSESSMENT	85
(i) Introduction	85
(ii) The elements of the graduated response injunction	86
(iii) Evolution of proposals	91

(iv) Assessment of the legal issues	105
(a) The remedies..... "shall not be unnecessarily complicated or costly"	106
(b) Does the development of the defendant's computer system "entail unreasonable time limits or unwarranted delays?"	109
(c) Would the remedies be effective, proportionate and dissuasive?	109
(d) Prior, impartial procedure	110
(e) Norwich Pharmacal orders	114
(f) Fair and equitable	116
(g) Whether it is fair and equitable in principle to grant an injunction in this case	117
(h) Whether the allocation of costs of compliance with such an injunction are fair and equitable	121
REFERENCE TO CJEU	127
CONCLUSION	128

INTRODUCTION

2 1. The plaintiffs are record companies who produce and sell records. They are also the owners of copyright in a large number of sound recordings and have, by reason of an exclusive licence, the exclusive right in the State to sell copies of large numbers of sound recording. The copyright in these recordings is owned by diverse companies within the Sony Music, Universal Music or Warner Music group of companies.

3 2. The defendant is a company incorporated in the State and it provides a service to subscribers whereby subscribers may access the internet by broadband. The defendant is an internet service provider ("an ISP").

THE ISSUE

4 3. The issue which is raised in this case is the significant problem of internet piracy of music. There are many people unlawfully downloading music for free on the internet using the defendant's internet services.

5 4. The problem is enormous. For example, during a 30 day period in November 2012, an agent of the plaintiffs' identified that persons using the defendant's internet services had unlawfully uploaded approximately 7,500 copies of a sample of nearly 250 songs in a one month period.

6 5. The plaintiffs' position is that they do not consent to this unlawful activity and they regard it as a breach of their copyright. Indeed one of the agreed facts in this case is that there is wholesale theft of the plaintiffs' copyright being conducted on the internet at present by subscribers to various internet service providers.

NATURE OF THE RELIEF SOUGHT- A GRADUATED RESPONSE STRATEGY

7 6. By letter dated 19 ^th December, 2013 the plaintiffs, through their solicitors, informed the defendant that they had information that their copyright was being infringed by persons using the defendant's service. In particular the plaintiffs informed the defendant of:

8 (a) The internet protocol (IP) address of the UPC subscriber account

9 (b) The date and time of use

10 (c) The sound recording of the plaintiffs' made available from the internet protocol address in question and

11 (d) The peer to peer protocol used.

12 The plaintiffs called upon the defendant to communicate with its subscribers and to terminate these infringements and to prevent further infringements.

13 7. The defendant however has indicated that it would not act on the plaintiff's complaint and it would not communicate with its subscribers unless ordered to do so by the Court.

14 8. The plaintiffs in their Statement of Claim are seeking what has been called a "graduated response" to the problem of internet piracy.

15 9. Thus, the injunction which the plaintiffs are seeking, is an injunction pursuant to s.40 (5A) of the Copyright and Related Rights Act, 2000 (as amended) requiring that the defendant take reasonable steps to prevent its subscribers from using the defendant's internet service for the purpose of breaching the plaintiffs' copyright in the plaintiffs' sound recordings.

16 10. In particular the plaintiffs are seeking an injunction in the following terms:

17 That, where the defendant is notified by the plaintiffs of the IP address (with date and time stamp) of a subscriber to the defendant's internet service, who is making available the plaintiffs' copyright sound recordings to the public, through the internet, without the plaintiffs' consent:

18 (1.) That the defendant - in respect of the first such notification - would send the subscriber an educational communication informing the subsciiber of tne details of the infringement of copyright notified, the damage caused to artists, musicians and the music industry generally by such infringements, the manner in which the subscriber's internet connection can be secured, asking the subscriber to desist from any further infringement and warning the subscriber of the consequences of further infringements.

19 (2.) That the defendant would send to its subscribers - in respect of a second such notification from the plaintiffs - a communication informing the subscriber of the details of the infringement of the copyright notified, requesting that the subscriber cease and desist from any further infringement and warning the subscriber of the consequences of further infringement.

20 (3.) That, in the event of a third such notification, the defendant would send its subscriber a communication setting out the same matters as set forth in (2) and also suspend its internet service to that subscriber for one week.

21 (4.) That, in the event of a fourth such notification, the defendant (having assured itself of the probity and reliability of the processes involved in the steps above) would take steps to terminate its contract with the subscriber for the provision of internet service.

22 11. This type of solution is what is known in the industry as a "Graduated Response Strategy" (GRS). The essential elements are that the owners of the copyright send to the ISP a list of infringements with reference to specific internet protocol addresses; (The copyright owners can only identify the specific IP address. They cannot identify the name and address of the subscriber). However when this information is sent to the defendant, the defendant as the ISP can, using the IP addresses, identify the name and address of its subscribers. It then writes to its subscribers informing them that these matters have come to its attention. The second letter is a second reminder or threat of further action. The third step would be the suspension of the account for a week. The fourth step would be the termination of the account.

23 12. This issue of a Graduated Response Strategy has been the subject of...