Twentieth Century Fox Film Corporation & Ors v British Telecommunications Plc

Factual and Procedural Background

On 28 July 2011, the court handed down a judgment on the application by the Applicants ("the Studios") for an order against the Respondent ("BT") under section 97A of the Copyright, Designs and Patents Act 1988, implementing Article 8(3) of the Information Society Directive. The judgment concluded that an order substantially in the form sought by the Studios would be made. The matter was adjourned by agreement for further argument on the precise form of the order, resulting in multiple rounds of evidence and emerging issues.

A third party, Desmond McMahon, claiming to be a BT subscriber potentially adversely affected by the proposed order, applied to be joined as an additional respondent but did not pursue this application through counsel. Permission was granted for submissions on his behalf, which were considered but given limited weight due to timing and concerns about the accuracy and origin of his evidence.

Other Internet Service Providers (ISPs) submitted letters raising points related to the order, but these were given limited weight as the ISPs had not intervened formally or filed evidence prior to the hearing. The court noted that issues raised by these ISPs might be relevant in future proceedings against them but did not affect the order against BT.

Legal Issues Presented

1. Whether the order against BT should require IP address re-routing or IP address blocking.
2. The scope of BT's services to which the injunction should apply, particularly whether it should be confined to UK retail, mass market services incorporating Cleanfeed.
3. The appropriate wording of the injunction concerning additional IP addresses or URLs enabling access to the infringing website.
4. Whether BT should be permitted to apply to vary or set aside the order if the Studios fail to obtain equivalent injunctions against other ISPs.
5. Whether the order should include a provision allowing BT to temporarily shut down Cleanfeed or additions thereto without prior court approval.
6. The analogy between the court's jurisdiction under Article 8(3) of the Information Society Directive and the Norwich Pharmacal jurisdiction, and its implications for costs and obligations.
7. Who should bear the costs of implementing the order.
8. Whether the Studios should provide a cross-undertaking in damages or indemnity to BT for losses arising from compliance with the order.
9. Allocation of costs of the application between the parties.

Arguments of the Parties

Appellant's (Studios') Arguments

• The order should require IP address re-routing rather than IP address blocking to avoid overblocking.
• The injunction should apply to all BT services incorporating Cleanfeed, whether optional or mandatory.
• The wording of the injunction should include "sole or predominant purpose" to prevent circumvention by adding unrelated content to URLs.
• There is no obligation to seek injunctions against all ISPs before the order against BT can remain effective.
• BT should bear the costs of implementing the order as a cost of carrying on its business facilitating infringement.
• No cross-undertaking in damages or indemnity should be required from the Studios as the order is a final injunction, not an interim one.

Respondent's (BT's) Arguments

• The injunction should be confined to BT's UK retail, mass market services that incorporate Cleanfeed as a non-optional feature.
• The wording of the injunction should be limited to IP addresses or URLs whose sole purpose is to provide access to the infringing website, excluding those with predominant but not sole purpose.
• BT should be allowed to apply to vary or set aside the order if the Studios do not obtain equivalent injunctions against other ISPs within a reasonable time.
• BT requested a provision allowing temporary shutdown of Cleanfeed or additions thereto for operational reasons without prior court approval, with subsequent notification.
• BT sought a cross-undertaking in damages or indemnity against losses caused by the order, including third-party claims.
• BT contended it should not bear the costs of implementing the order, asserting that the Studios should pay.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully considered the technical and legal aspects of the injunction sought by the Studios against BT under Article 8(3) and section 97A. It clarified that Cleanfeed operates via IP address re-routing combined with DPI-based URL blocking, and that IP address blocking could cause overblocking, thus IP address re-routing was preferred.

Regarding the scope, the court accepted that the injunction should apply to all BT services incorporating Cleanfeed, whether optional or mandatory, but not to BT's access or upstream divisions.

On the wording of the injunction relating to additional IP addresses or URLs, the court favored the Studios' formulation including "sole or predominant purpose" to prevent circumvention, allowing the Studios to notify BT of such addresses without returning to court for each.

The court rejected BT's request to condition the order on the Studios obtaining equivalent injunctions against other ISPs, as there is no legal obligation to seek remedies against all intermediaries.

BT's proposal to allow temporary shutdown of Cleanfeed without prior court approval was denied; instead, suspension requires Studios' consent or court permission on notice, with provision for urgent applications.

The court analyzed the analogy with Norwich Pharmacal orders, recognizing similarities in the equitable duty to assist but emphasizing key distinctions such as the substantive right to a final injunction under Article 8(3) and the intermediary's lack of wrongdoing.

On costs of implementation, the court held that BT should bear these costs as part of the cost of carrying on its business facilitating infringement, consistent with the Information Society Directive's recital and proportionality principles.

The court declined to require the Studios to provide a cross-undertaking in damages or indemnity, reasoning that final injunctions do not warrant such protection, and that compliance with a court order generally provides BT with a defence against claims arising from the injunction.

Regarding costs of the application, the court apportioned costs based on the parties' conduct: Studios to pay costs up to 16 December 2010, BT to pay from 17 December 2010 to 28 July 2011, and each party to bear its own costs thereafter.

Holding and Implications

The court GRANTED the order substantially in the form sought by the Studios with the following key provisions:

• BT must implement within 14 days IP address re-routing and DPI-based URL blocking via Cleanfeed for all services incorporating Cleanfeed, including optional services.
• The injunction covers www.newzbin.com, its domains and sub-domains, and any other IP address or URL whose sole or predominant purpose is to enable or facilitate access to the Newzbin2 website.
• Temporary suspension of Cleanfeed or additions thereto requires written consent of the Studios or their agents, or court permission on notice, with provisions for urgent applications.
• Costs of implementing the order are to be borne by BT.
• Costs of the application are apportioned as per the parties' conduct during the proceedings.
• No cross-undertaking in damages or indemnity is required from the Studios.
• BT is not entitled to apply to vary or set aside the order based on the Studios' failure to obtain equivalent injunctions against other ISPs.

The decision directly affects the parties by imposing the injunction on BT's relevant services and clarifying procedural and cost responsibilities. The court did not establish new precedent beyond the application of existing principles to the facts, particularly emphasizing the distinctions between Article 8(3) injunctions and Norwich Pharmacal orders.