The background to the litigation is described in our previous article on the Newzbin case published on www.ffw.com. The High Court has now confirmed that the Studios do not have a proprietary interest
The background to the litigation is described in our previous article on the Newzbin case published on www.ffw.com. The High Court has now confirmed that the Studios do not have a proprietary interest in the profits of Newzbin's copyright infringement and the profits are not held on trust for the copyright owner.
Court Decision
Neither the legislation, nor text books nor caselaw make any direct reference to the availability of this form of proprietary relief. The Copyright Act 1956 did give rise to conversion damages based on the whole value of the infringing article (not just the profits). However, this was widely criticised and duly repealed.
Copyright infringement is not the same as theft because the copyright owner retains his property (the copyright work) at all times. A copyright infringer was more akin to a trespasser rather than a thief and a landowner has no proprietary claim to the fruits of trespass.
Comment
This decision is not surprising as it confirms the usual remedies available in IP matters. The Studios' claim was extremely bold and a proprietary injunction over the proceeds of Newzbin's infringement would have been a very powerful and valuable weapon that had never been granted in an IP case before.
One of the major factors that persuaded the judge was that, had the Studios succeeded, they would have been entitled to the entire proceeds of Newzbin's sales and not just the profits. He thought this was unfair and could stultify enterprise because people might be deterred from pursuing activities if they perceived there to be even a small risk of infringement.
Court Decision
Neither the legislation, nor text books nor caselaw make any direct reference to the availability of this form of proprietary relief. The Copyright Act 1956 did give rise to conversion damages based on the whole value of the infringing article (not just the profits). However, this was widely criticised and duly repealed.
Copyright infringement is not the same as theft because the copyright owner retains his property (the copyright work) at all times. A copyright infringer was more akin to a trespasser rather than a thief and a landowner has no proprietary claim to the fruits of trespass.
Comment
This decision is not surprising as it confirms the usual remedies available in IP matters. The Studios' claim was extremely bold and a proprietary injunction over the proceeds of Newzbin's infringement would have been a very powerful and valuable weapon that had never been granted in an IP case before.
One of the major factors that persuaded the judge was that, had the Studios succeeded, they would have been entitled to the entire proceeds of Newzbin's sales and not just the profits. He thought this was unfair and could stultify enterprise because people might be deterred from pursuing activities if they perceived there to be even a small risk of infringement.