OCL 70102, OCL 70103, OCL 70104, OCL 70106, OCL 70107,
OCL 70108, OCL 70113, OCL 70114, OCL 70115, OCL 70122,
OCL 70123, OCL 70124, OCL 70125, OCL 70126, OCL 70127,
OCL 70128, OCL 70129, OCL 70130, OCL 70131, OCL 70132,
OCL 70133, OCL 70135, OCL 70136
133-137 Fetter Lane
London EC4A 1HD
B e f o r e :
| Media C.A.T. Limited
|- and -
|Malcolm Adams, Katherine Taylor, Hooper, Mitchell Chance, Miss Gonzalles Romeo, Mark Jimack, Miss Maria Shewan, Keith Wood, William Wickam, Sean Allen, Christopher Beck, Dave Cundall, Danny Cowan, Glyn Bentley, Pana Begum, Peter Armitage, Allan Billington, James Bryant, Julia Abbott , Christopher Birkett, M Brunt, Gareth Bacon, Wayne Bacon, Michelle McGlade, Elaine Cox, David Bick,
Guy Tritton (instructed by Ralli) for the the Defendants: Mark Jimack, Allan Billington, Christopher Birkett, Wayne Bacon, Christopher Beck
Francis Davey (instructed by Lawdit) for the Katherine Taylor, Lyndsey Gonzalez-Romero, Keith Wood, William Wickham, David Cundall
The other defendants did not appear and were not represented
Hearing dates: 17th, 24th January 2011
Crown Copyright ©
His Honour Judge Birss QC :
Conclusions on the letter of claim in the light of the Particulars of Claim
After the RJFs
"Sir, I cannot afford legal representation, but have taken some advice from Citizens Advise Bureau and so apologies for any lack of legal refinement."
"no proofs have been brought to support it and I am deeply angered and distressed that I have been driven to the recourse of being taken to court, having my reputation imputed and having my family deeply upset."
"They do not have my correct name I am not Mr B Batstone, they have never corrected this."
"They [ACS:Law] have not seemed to wish to resolve this case without either my making a payment of extorted monies to them or by threatened recourse to court. They rely on fear of embarrassment and censure to ensure persons such as I pay up even when innocent abusing the legal process so to do".
"I received no reasonable response to my two letters appended from ACS:Law other than the one copy of which is appended stating that 'no adequate explanation as to why my internet connection was used to infringe copyrighted work' despite my raising the issues and refuting the claim their second letter to me was about going to court."
"This letter from ACS Law (copy appended) has a notice about taking me to court, the cases of which do not match the terms of the work cited on the letter or other documents."
"I only knew this court case has occurred when I received your judgement of 1st Dec where it is noted that I had defaulted. I received no form to respond to a case I did not know was occurring other than this letter dated 19th August. I was noted as in default in your judgment of 1st December without even knowing that the case had proceeded, without information on how I may represent to the court and it would seem without the court seeing my two rebuttal letters. For instance I had no letter telling me of the date and I only discovered the use of the form N9D from Your Honours judgment paperwork."
"The role of ACS Law in constantly demanding my admission of liability and demands for monies.
They rely on persons paying because of the below reasons, using the legal process to bring the law into disrepute.
i. They have extorted monies from many persons (see supporting information) who pay up for fear of family or friends seeing them as people who share pornography.
ii. They rely on a defendants (and courts perhaps) poor understanding of how IPs (internet addresses) work. (see supporting information).
iii. The fact that they are being investigated by media and legal bodies (see supporting information)."
"They have not responded to my request for a legal and proven basis for their claim. So I have no chance of rebuttal and gaining expert opinion (see my letter of 30th May)."
"My home had over 5 internet enabled devices (excluding 'smartphones') none of which have or has ever had any P2P software on them. I am happy to have this check forensically."
The hearing on 24th January
The GCB letter
"This is a proper intellectual property (IP) court that has made this judgment,"[ ] "the previous ones were default judgments where defendants never turned up."
The explanation for GCB Ltd
Events at the hearing on 24th January 2011
The notices of discontinuance
The first issue is whether the notice of discontinuance can be struck out, and, if it can, whether it should be. It is accepted that under the Rules of the Supreme Court as they were in 1979 (for they have now been amended to take care of the situation which arises when interim payments have been made: see R.S.C. (Amendment No. 2) 1980, r. 4), the plaintiff, notwithstanding the two interim payments and the admission of liability, could discontinue without leave, if he did so not later than 14 days after service of defence. Lord Denning M.R. was, however, prepared to hold that our courts can, by the device of statutory interpretation, repair the omission in the unamended R.S.C., Ord. 21, r. 2 to provide for the case in which interim payments had been ordered and made before the expiry of the time limit. "I fear," he said, "that the draftsmen of interim payments forgot all about notices of discontinuance. Interim payments are quite inconsistent with a right to discontinue without leave";  1 W.L.R. 833, 854H. Interim payments were made possible by the Administration of Justice Act 1969, section 20, and introduced into the law in 1970 by R.S.C., Ord. 29, rr. 12-17. Like Lord Denning M.R., I have no doubt that the failure to amend the rule relating to notice of discontinuance was a casus omissus. But I do not agree that it is an omission which the courts can make good by reading into the rule a provision that leave is needed when the rule expressly said it was not. Unless, therefore, it is possible to treat a notice of discontinuance without leave which complies with the Rules of the Supreme Court as an abuse of process (which is what Parker J. did), the notice cannot be struck out.
In the Court of Appeal, Lord Denning M.R. was prepared so to hold (p. 855). Brandon L.J. expressed no opinion. Shaw L.J., however, held that it was not possible. It seemed to him "an inversion of logic to speak of an act which purports to terminate a process as being an abuse of that process." (p. 864D). I am not sensitive to the logical difficulty. Even if it be illogical (and I do not think it is) to treat the termination of legal process as an act which can be an abuse of that process, principle requires that the illogicality be overridden, if justice requires. The court has inherent power to prevent a party from obtaining by the use of its process a collateral advantage which it would be unjust for him to retain: and termination of process can, like any other step in the process, be so used. I agree, therefore, with Parker J. and Lord Denning M.R. that service of a notice of discontinuance without leave, though it complies with the rules, can be an abuse of the process of the court.
Was it, then, in the circumstances of this case, an abuse? In my judgment, it was. A sensible test is that which both the judge and Lord Denning M.R. applied. Suppose leave had been required (as it would have been, if the notice had been served 24 hours later), would the court have granted unconditional leave? It is inconceivable that the court would have allowed a plaintiff, who had secured interim payments and an admission of liability by proceeding in the English court, to discontinue his action in order to improve his chances in a foreign suit without being put upon terms, which could well include not only repayment of the moneys received but an undertaking not to issue a second writ in England.
The notice being an abuse of process, Parker J. was right, in my judgment, to strike it out. It does not, however, follow that the court may not thereafter give the plaintiff leave upon terms to discontinue.
[571 F - 572 C]
There will always be a reason to trigger the discontinuance. The whole reason for the county court rule is to provide a collateral advantage. He [counsel for the party seeking to discontinue] submits that the court in Castanho's case was driven to use abuse of process as a device to overcome the problem raised by interim payments. It is of course important to recognise on the one hand that the court uses a jurisdiction to strike out for abuse sparingly and in plain cases where there has been misuse of the court's process, and on the other that the court is not constrained by fixed categories of circumstances in which the court has this power. [p 690]
I consider that the judge was correct to hold that he had jurisdiction to strike the notice out if it were an abuse. Whether in a particular case there is abuse will be a question of fact and degree. It is a jurisdiction to be used with circumspection no doubt, but it is a jurisdiction which is available in the county court as in the High Court. [at p 691]
Breach of the rules or statute
Breach of CPR Pt 19 r 19.3
19.3 Provisions applicable where two or more persons are jointly entitled to a remedy
(1) Where a claimant claims a remedy to which some other person is jointly entitled with him, all persons jointly entitled to the remedy must be parties unless the court orders otherwise.
(2) If any person does not agree to be a claimant, he must be made a defendant, unless the court orders otherwise.
38.2 Right to discontinue claim
(1) A claimant may discontinue all or part of a claim at any time.
(c) where there is more than one claimant, a claimant may not discontinue unless-
(i) every other claimant consents in writing; or
(ii) the court gives permission.
28. However, I cannot go along with a wider argument which Mr Ullstein deployed. He contended that where a group litigation order has been made, the claims to which the group litigation order relates all constitute one action, since the case of every claimant stands or falls with the success or failure of the claims which are treated as lead claims. The fallacy in this argument is that rule 38.2 deals with claims, not actions. Even if it is right to describe a number of claims to which a group litigation order relates as a single action (which I doubt), the fact is that it comprises a number of claims. Those claims are being litigated together under the umbrella of the group litigation order to ensure effective case management, but that does not mean that they are not separate claims. Accordingly, it is only those claimants whose claim forms named at least one other claimant who need the permission of the court for their notices of discontinuance to be effective, even if they served notices of discontinuance otherwise than on agreed terms.
Breach of s102 of the 1988 Act
102. Exercise of concurrent rights.
(1) Where an action for infringement of copyright brought by the copyright owner or an exclusive licensee relates (wholly or partly) to an infringement in respect of which they have concurrent rights of action, the copyright owner or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as a plaintiff or added as a defendant.
(2) A copyright owner or exclusive licensee who is added as a defendant in pursuance of subsection (1) is not liable for any costs in the action unless he takes part in the proceedings.
(3) The above provisions do not affect the granting of interlocutory relief on an application by a copyright owner or exclusive licensee alone.
(4) Where an action for infringement of copyright is brought which relates (wholly or partly) to an infringement in respect of which the copyright owner and an exclusive licensee have or had concurrent rights of action
(a) the court shall in assessing damages take into account
(i) the terms of the licence, and
(ii) any pecuniary remedy already awarded or available to either of them in respect of the infringement;
(b) no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and
(c) the court shall if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them;
and these provisions apply whether or not the copyright owner and the exclusive licensee are both parties to the action.
" the purpose of subsection 102(1) is to protect defendants from being sued by more than one claimant in separate actions. It seems likely, therefore, that a court will expect claimants to take considerable steps to identify other persons with rights before it will grant permission to proceed without their being joined."
Collateral advantage I: re-litigating by the copyright owner
Collateral advantage II: avoiding judicial scrutiny
i) Does the process of identifying an IP address in this way establish that any infringement of copyright has taken place by anyone related to that IP address at all. The technical issues raised by Mr Davey (and Mr Stone) relate to this point.
ii) Even if it is proof of infringement by somebody, merely identifying that an IP address has been involved with infringement then encounters the Saccharin problem. It is not at all clear to me that the person identified must be infringing one way or another. The fact that someone may have infringed does not mean the particular named defendant has done so. Perhaps the holder of the account with the ISP has a duty to assist along the lines of a respondent to another Norwich Pharmacal order but that is very different from saying they are infringing.
iii) The damages claimed deserve scrutiny. If all that is proven is a single download then all that has been lost is one lost sale of one copy of a work. The sort of sum that might represent would surely be a small fraction of the £495 claimed and the majority of that sum must therefore be taken up with legal costs. If so, a serious question of proportionality arises but again this has not been tested. Clearly if the defendant has infringed on a scale as in the Polydor case then would be a very different matter but there is no evidence of such infringement here.
i) Does the agreement actually give Media CAT the right to litigate at all? The right to bring proceedings is statutory and vests in the copyright owner (s96 1988 Act) and in an exclusive licensee (s101 1988 Act) and in some circumstances a non-exclusive licensee (s101A 1988 Act). It is by no means clear that Media CAT has any right to sue.
ii) Even if Media CAT has a right to sue, section 102 of the 1988 Act requires the copyright owner to be a party subject to the court's permission to proceed without them. The agreement between Sheptonhurst and Media CAT appears to presume that Media CAT can litigate without Sheptonhurst or other copyright owners being a party and without the court's permission to do so. That is wrong for the reasons first raised in Media CAT v A and addressed above. It is no doubt very inconvenient for Sheptonhurst and for Media CAT. The agreement appears to contemplate that Sheptonhurst is to collect its share of the revenue without bearing any risk including any cost risk and there was a submission that all that would be needed is for the copyright owner to join as a defendant. However as discussed above, where would such an approach leave the claim for damages for loss suffered by that party?
i) By 17th December 2010 some of the actions were defended. One defence had been filed in October and yet no progress in the proceedings had taken place. Why did it take a judge acting on his own motion to call in the cases for any sort of hearing?
ii) The use of the administrative RJF procedure to seek judgments in default was plainly inappropriate (see Media CAT v A). Was it chosen because it is for cases which do not require a judicial decision?
iii) Between the hearing on 17th January and the hearing on 24th January I wrote inviting the claimant to provide copies of the actual Norwich Pharmacal orders in the proceedings and the agreements which give Media CAT its right to sue in all the cases. The claimant was invited to provide them in order to avoid the need for further adjournments of the proceedings. These are all documents referred to in the pleadings and ordinarily in the Patents County Court would be annexed to the Particulars of Claim. The claimant did not file them in advance of the hearing. When the matter was raised in court on 24th January Mr Ludbrook's instructions were that they had been "in storage" but were now available in court. A party who keeps key documents which are cited in the Particulars of Claim in storage is not a party anxious to progress their claim in court.
i) He stated that his firm suffered a criminal attack in September where private and privileged emails were hacked and published on the internet. From that time on he decided to close that part of his practice that dealt with letter writing. The criminal attack forced him into the assigned risks pool.
ii) Mr Crossley stated that he has suffered continual abuse and threats including death threats and bomb threats and that his children have received inappropriate communications from people connected with this area of work.
iii) Mr Crossley stated that all sixteen staff employed by him in September were let go or made redundant. Mr Crossley explained that it is not possible to continue the file sharing work without a considerable number of staff.
iv) Mr Crossley has been referred to the Solicitors Disciplinary Tribunal in relation to the file sharing work he was undertaking. He explains that he has not had any charges laid against him but is concentrating his efforts in fighting any charges.
v) He states that the cases were "on reflection and on mature consideration inelegantly drawn". This was initially to be corrected by discontinuance and subsequent reissue by his firm (with permission when required). He stands by the initial letters before action and would have been keen to continue the litigation but for the collateral reasons which have stopped him doing this kind of work. The decision was not made in bad faith or to avoid judicial scrutiny. It was on instructions received by the claimant following advice the client received.
vi) Mr Crossley has other clients unrelated to file sharing work that he needs to service and with a dwindling staff and repeated threats he decided to cease this kind of work due to the immense hassle it has caused him and his family. Otherwise he stands by the letter of claim and would have been keen to continue litigation.
Conclusion on notices of discontinuance
i) As these actions are copyright claims by a person claiming (at best) to be a licensee, permission under s102 of the 1988 Act should have been obtained by Media CAT to proceed with the action without joining the copyright owner. Taking the step of serving these notices without permission is a breach of s102.
ii) For that reason, the notices of discontinuance should be set aside as an abuse of process. In the cases in which a defence has been filed the notices are also abusive in that they give a relevant unwarranted collateral advantage to the copyright owner - who may be able to avoid the effects of r38.7.
iii) In any event the notices have the effect of providing unwarranted collateral advantages to the financial beneficiaries under the agreements (Media CAT, ACS:Law, Sheptonhurst and presumably the other copyright owners/ exclusive licensors). The unwarranted advantage is that the notices therefore avoid judicial scrutiny of the underlying claims on which the Norwich Pharmacal orders were based which, despite the purported discontinuance, are (or were) being pressed ahead in correspondence against many other individuals.
What terms ?
An order restraining Media CAT from sending any further letters?
Wider issues - this kind of Norwich Pharmacal order
Events after 24th January