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O2 ordered to disclose customer details

Nick Rose
06/06/2012

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War on Internet Piracy – O2 customers come into the firing line …


In the case of Golden Eye (International) Ltd and Ors v Telefonica UK Ltd [2012] EWCH 723 (Ch), the High Court has granted a Norwich Pharmacal order (third party disclosure order) against O2 requiring it to disclose details of customers who have infringed copyright by downloading and sharing pornographic films on peer-to-peer networks. The case demonstrates the latest weaponry in copyright holders' attack against online infringement. Arnold J also provided guidance on how the courts should strike a balance between the interests of copyright holders and the privacy and protection of consumers.

Facts

The application was made by 14 claimants - 13 were copyright owners of pornographic films and one was the exclusive licensee of the films. Under the licence agreements, Golden Eye was entitled to act on each of the copyright owners' behalf in proceedings for infringement.

Golden Eye supplied the court with a draft order accompanied by a draft letter which was to be sent to the 9,124 O2 customers who were alleged to have committed infringement. One of the claimant's demands in the draft letter required the infringing O2 customers to pay £700 compensation.  

Whilst O2 was the defendant in the case, they did not oppose the order nor take part in the proceedings. To represent the interests of the O2 customers, the court asked Consumer Focus, the statutory body which represents consumers in England, Wales and Scotland, to make submissions on their behalf.

Consumer Focus criticised the draft letter, drawing similarities with the type of speculative invoicing which was condemned in cases of ACS:Law and Media CAT. Consumer Focus asserted that the letter was more a revenue-making scheme rather than a means of legal redress and that its requests were disproportionate. They also discredited the reliability of using IP addresses to identify infringers.  Consumer Focus also pointed out that consumers were not in a position to challenge the demands in the letter due to the potential for public embarrassment.

Ruling

Arnold J noted Consumer Focus' comments, but nevertheless decided that the order and letter were a genuine attempt for rights holders to be compensated for a legal wrong. He made amendments to the draft order and draft letter, having discussed the importance to balance the interests of the copyright holders and the privacy of consumers. The order was granted in favour of the first and second claimants but not for the benefit of the other claimants who had not taken an active part in proceedings.

Comments

The case has indicated that rights holders may be changing tactics in their ongoing battle with internet piracy. Recently we have seen rights holders attempt to stop infringement at its source, requesting court orders to have ISPs block access to particular websites, as seen in the ongoing Pirate Bay case (Dramatico Entertainment v BSkyB). However, as websites are blocked, new file sharing sites appear, and the operators of such sites continue to remain elusive. This case demonstrates that rights holders can now choose to pursue the end users, make an example out of them, and also receive significant financial compensation in doing so.

Arnold J's comments and amendments on the draft letter to be sent out to the infringers provides very useful guidance for any lawyers representing rights holders in such actions. The comments also uncover issues regarding the conduct of actions against consumers, the reliability of evidence, and the proportionality of fines, all of which will need to be addressed in the Digital Economy Act 2010.

Aneesh Patel, Trainee, IP Protection and IP Enforcement and Litigation at Fieldfisher.