The IFPI has an anti-piracy unit which held covert memberships of oink.cd from 2004 onwards. Although hosted in The Netherlands, the site was registered with Nominet, the UK Internet Domain Registry and the IFPI could easily have obtained Ellis’ details through a Norwich Pharmacal disclosure order (in fact from June 2007 his details were publicly available on the “whois” website). Thereafter it was open to IFPI to seek injunctive relief in the Chancery Divison under the Copyright Designs and Patents Act 1988 (“the 1988 Act”) if they felt that oink.cd was prejudicing its members’ rights. Instead in September 2007 the case was reported to the Cleveland Police, who investigated with IFPI assistance. In October 2007 a dawn raid on Ellis’ home address led to his arrest and the site being shut down. Prior to his arrest the press had been alerted and attended the raid.

Throughout the operational period of oink.cd Ellis complied with take down requests from rights holders asking for the removal of specific torrent files from oink.cd. There was clear evidence of considerable co-operation between oink.cd and various rights holders which was demonstrated to the jury by reference to e-mail traffic dating back to 2006.  This distinguished oink.cd from other file sharing sites such as Piratebay whose owners were convicted by a Swedish Court in 2009. The Piratebay owners profited hugely from their operation and refused all takedown requests, bragging on their site that they were unstoppable—even though they have been convicted the site continues to operate and the owners are currently appealing.  At Ellis’ trial, John Kennedy, the head of the IFPI agreed that some bands and labels actively used oink.cd and other file sharing sites to promote their music. The Artic Monkeys are a band often quoted as owing their success to file sharing sites.


Criminal or civil route?

The police and trading standards are statutorily bound to investigative trade marks and copyright offences. However one does question the IFPI’s decision to push for a prosecution rather than to take action in the civil courts. The public had to foot the bill for the prosecution and defence of Ellis, when the IFPI and others are perfectly capable of funding either a prosecution or a civil claim themselves.

The recent case of 20th Century Fox Film Corporation v Newzbin Ltd [2010] EWHC 608 (Ch) illustrates how the civil courts can effectively protect and compensate rights holders from internet based infringement. Newzbin is a usenet based website facilitating the sharing of film content. On 29 March 2010 Kitchin J granted an injunction restraining the site and stated that the case may be one where flagrancy damages under s 97 of the 1988 Act are appropriate.

In the oink.cd case it may be that the IFPI saw a prosecution, as opposed to a civil claim, as more cost effective. Had the prosecution succeeded there would have been the considerable publicity of a conviction and possibly therefore greater deterrence of file sharing. The evidence however suggests that file sharing has increased exponentially since the prosecution of Piratebay and oink.cd. Since the Piratebay trial membership of the site has grown to 22 million and membership of the Swedish Copyright Reform Pirate Party has grown by 50 per cent. 

One can never know why a jury acquits, but Ellis maintained that he had never acted dishonestly and never believed that what he was doing was against the law (no files, infringing material or not, are hosted on BitTorrent file sharing sites).


IP protection: legal developments

IP rights holders have been lobbying for legislation on both a national and international level since the advent of the earliest file sharing sites such as Napster. The Anti-Counterfeiting Trade Agreement (“ACTA”) set up by the US administration in 2007 aims to establish international standards on IP rights and enforcement throughout the participating countries (G8 and others).
The agreement is negotiated in private but leaks reveal a desire to force Internet Service Providers (“ISPs”) to reveal the identity of suspected copyright infringers, without a warrant and a requirement on ISPs to limit internet use for those alleged to be file sharing. Both these proposals feature in recent French legislation and the Digital Economy Act 2010 which received Royal Assent on 12 April 2010 during the wash up period prior to the dissolution of Parliament. There has been opposition from ISPs who argue that these provisions will create expensive regulation (estimated at £50 per annum for every broadband user), be difficult to enforce and simple to circumvent.
The ISPs will be forced to monitor every packet passing through their network for copyright fingerprints. This will require tens of millions of pounds worth of extra computer equipment and raises obvious privacy and data protection issues. It is interesting to note that the “deep packet inspection” technology proposed is the same as that used by regimes, such as China and Iran, to monitor and censor the internet.

It will be easy for those determined to circumvent the regulation to do so. Freeloading on an unsuspecting wi-fi network is one option and mobile connections through mobile phones and USB dongles do not have assigned IP addresses and therefore cannot be narrowed down to an individual user for enforcement purposes. Virtual Private Networks (“VPNs”) are readily available, from the Piratebay site for example, and make tracing any IP address impossible. Ironically the implementation of the Digital Economy Act may make untraceable internet usage far more prevalent, thereby making the investigation and detection of other more serious crime more difficult.
Rights holders already have remedies for infringement in the civil courts and they would be well served concentrating their energies by enforcing their rights in the Chancery Division—where they have the advantage of the civil standard of proof and both parties have the right of appeal from a reasoned judgment—rather than pursuing prosecutions through the overstretched criminal justice system. As Stanley Burnton LJ stated in R v Gillham [2009] EWCA Crim 2293: “Cases that, for example, involve determination of difficult questions whether a copy is of a substantial part of a copyright work, can and should be tried in the Chancery Division before specialist judges. They can be so tried much more efficiently in terms of cost and time than before a jury, and questions of law can if necessary be determined on appeal on the basis of clear findings of fact. In appropriate cases, the court will grant injunctive relief, and a breach of an injunction will lead to punishment for contempt of court. If the facts proven against a defendant show that he has substantially profited from criminal conduct, proceedings for the civil recovery of the proceeds of his crimes may be brought under Pt 5 of the Proceeds of Crime Act 2002.”

Alex Stein is a barrister at No5 Chambers. He was instructed by Morgan Rose Solicitors in the Ellis trial.


File sharing

Government commissioned research by CIBER (University College London) estimates that seven million of the UK population have used “illegal” peer-to-peer (“P2P”) file sharing websites to download music and films for free. Although there is considerable debate as to the accuracy of that figure it is regularly quoted in support of further legislation to protect intellectual property rights holders.
Whatever the true figure it is clear that file sharing is commonplace especially amongst those under the age of 25. The music industry maintains that file sharing has a massively detrimental effect on sales and research commissioned by the International Federation of the Phonographic Industry (“IFPI”) blames falls in CD sales on file sharing. However there is contradictory independent research suggesting that file sharing has either a neutral or in some cases positive effect on media sales as those that file share are effectively trying out media which they may then buy in legitimate formats (see “The Effect of File Sharing on Record Sales: An Empirical Analysis” (Oberholzer & Strumpf) (2004) and “The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada” (Andersen & Frenz) (2007)).