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Innovation or Unlawful Copyright Infringement?

Tuesday, 8 July 2014

The ease of copying digitised media caused traditional media businesses serious headaches when file-sharing websites began to proliferate across the internet during the dotcom boom years.

The apparent lack of regulation and a disregard or ignorance of intellectual property rights among a new wave of young entrepreneurs and online media consumers left the record majors reeling. The difficulty of applying existing intellectual property laws to an era of digital media led to new legislation such as the Digital Millennium Copyright Act in the US and, more recently, the Digital Economy Act 2010 in the UK.

The law has done a great deal of catching up in the last decade with high profile casualties such as the original Napster and Kim Dotcom’s Megaupload bringing notoriety to the online file sharing phenomenon.

That has not stopped online innovation but it has brought into focus the finer details of what is and is not on the wrong side of the intellectual property line.

Twentieth Century Fox Film Corp and others v Harris and others [2014]

The claimant companies are members of the Motion Picture Association of America Inc and between them own the copyright to a huge catalogue of films. They brought claims against Mr Harris and companies owned and controlled by him for large scale copyright infringement.

Mr Harris had previously lost two earlier cases made by the film companies against him. The first claim in 2010 related to a company that he owned called Newzbin Limited which the claimants successfully argued had extensively infringed their copyrights by unlawfully making the films available to its users through a form of online file sharing.

In the second case in 2011, the companies managed to successfully secure a court injunction to force internet service providers to block users from accessing a similar website to the one that had been run by Newzbin.

The claimants failed in a third case in 2012 to claim that they had a proprietary claim to money derived from the infringement of copyright by Newzbin.

In this latest case, the claimants believed that Mr Harris was the driving force behind the original Newzbin company and its successor. Accordingly, they brought proceedings against him and companies allegedly owned by him for unlawful means conspiracy.

Mr Harris argued that he had not intended to infringe copyright and did not believe that copyright had been infringed by the original Newzbin site. He also claimed that he had nothing to do with the running of the subsequent site and that no conspiracy had existed. He therefore sought to have the claim thrown out as an abuse of process on the basis the claimants should have made him party to the original proceedings rather than trying to re-litigate.

Unlawful Means Conspiracy

The court held that the claimants had in fact established unlawful means conspiracy against the defendants. It found that the defendants had committed a conspiracy to infringe the claimant’s copyright in order to defraud them.


Online innovation is continual and exciting, particularly for business models that are disrupting areas that are heavily regulated or protected in the offline world. Although these can offer great opportunities for entrepreneurs to create new niches, it is important not to overstep the mark and abuse the intellectual property rights of other parties. Needless to say, deliberate infringements are likely to invite serious legal consequences.

For specialist advice contact Peter Gourri today by email or telephone 0207 611 4848.

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