News & Press

High Court sets precedent after four years of speculative invoicing for alleged copyright infringement

Published: 26 March 2012

A verdict has been announced today in a court case which saw Golden Eye International Ltd1 and 13 pornographic film producers seek to force Internet Service Provider O2 to hand over personal details of over 9,000 customers, so they could pursue them for alleged copyright infringement.

Today’s judgement recognises the legitimate right of companies to seek redress for copyright infringement and allowed the order for one producer but declined it in respect of 12 other producers (see notes for more details).

The verdict also states that any claim letter sent by copyright-owners or their representatives must properly safeguard the legitimate interests of consumers, particularly those who are innocent of wrong-doing.2 This has big implications in restricting the ability of such companies to send out threatening ‘Pay now – or else letters’, as was also seen in the recent high profile case of ACS Law. The High Court will in a separate hearing impose conditions on the wording of the order and the letters.3

Golden Eye intended to write to 9,142 O2 customers demanding £700 in “damages” for alleged copyright infringement and threatening to potentially take court action and/or have the customer’s internet service slowed down or cut-off if they did not pay. The letters also wrongly asserted that bill payers are liable for any copyright infringement that may have occurred on their internet connection – whether they committed the infringement or not.

Responding to the judgment handed down by the High Court in Golden Eye v Telefonica (O2) today, Mike O’Connor, Chief Executive of Consumer Focus, said:

‘Following four years of speculative invoicing this case sets an important precedent for the rights of consumers, particularly those who are innocent, and the responsibilities of companies seeking redress on behalf of copyright owners.

‘It is very welcome that the court has recognised the bill-payer should not be automatically assumed to be guilty when a copyright owner believes they have detected copyright infringement on that internet connection. Consumers should not be subject to the type of threatening letters Golden Eye intended to send to more than 9,000 O2 customers.

‘In seeking the personal details of consumers through an Internet Service Provider it is only right that any claim must take into account the privacy and data protection rights of the provider’s customers.’

ENDS

Notes to editors:

  1. Golden Eye International Ltd is a limited company which acts on behalf of copyright owners. Unlike ACS:Law it is not a law firm. 
  2. The bill-payer or subscriber may not be responsible for any copyright infringement on the internet connection they pay for. The content may have been downloaded/shared by someone else in the same household – including a visitor, the computer or router may have been hacked into, or the IP address may identify a internet connection open to public use – e.g. in an internet café.
  3. The High Court will set the date for the second hearing in due course. The hearing is likely to be after Easter. At the hearing the High Court will impose conditions on the wording of the order and the letters which are to be sent to internet subscribers. Golden Eye will only be able to send out letters to O2 customers after the second hearing.

Further background: Golden Eye International Ltd and 13 copyright owners of pornographic films sought a “Norwich Pharmacal Order” (NPO) against O2, which would have forced O2 to hand over the personal details of more than 9,000 internet subscribers.

Golden Eye applied for an NPO against O2 in September last year. Following O2’s consent to the order, the application was referred to the High Court. The High Court was concerned that there was no practical way for consumers whose details would be released to challenge the application. Therefore the High Court arranged for Consumer Focus to consider the application and whether to make representations on behalf of the persons who would be identified if the order was granted.

Consumer Focus intervened on behalf of the consumers whose details would be released. Today the High Court granted the NPO to Golden Eye and Ben Dover Productions. The High Court in weighing up the competing interests of protection of copyright against the consumer’s right to privacy and protection of his or her personal data, declined to grant the order in relation to the other 12 copyright owners. It commented that granting the order “would be tantamount to the court sanctioning the sale of the Intended Defendants’ privacy and data protection rights to the highest bidder.” In relation to Golden Eye and Ben Dover the High Court held that it is proportionate to order disclosure of the bill payers personal details, provided that the order and the proposed letter of claim are framed to properly safeguard the legitimate interests of consumers, particular those who have not in fact committed the alleged copyright infringements.

The High Court found that because of the speculative invoicing campaign waged by ACS:Law – which sent tens of thousands of letters on behalf of clients demanding up to £500 “settlement” payments – a court who is asked to grant an NPO in such circumstances “needs carefully to consider the terms of the draft letter of claim”. The High Court found that the letters of claim Golden Eye intended to send to O2 customers were “objectionable in a number of respects”. Amongst other issues the letters wrongly asserted that bill payers are liable for any copyright infringement that may have occurred on their internet connection. The High Court agreed with Consumer Focus that the £700 Golden Eye planned to demand from O2 customers was “unsupportable”. The High Court said that Golden Eye should proceed in the conventional manner – that is to require the consumers who admit that they have infringed copyright to disclose information about their P2P filesharing and then individually negotiate the settlement sum with those consumers.

The High Court also found that the order Golden Eye sought, and O2 consented to, was “capable of causing unnecessary distress because it could be read as an implicit threat of publicity once proceedings have been commenced” due to the pornographic nature of the films combined with the fact that the O2 customers receiving the letters may not in fact have been a person who was engaged in filesharing of those films. Prior to making the application Golden Eye had obtained such an order against BT and BSkyB in October 2009 and February 2010 respectively. It is not known how many “speculative invoices” Golden Eye sent to BT and BSkyB customers, however in October 2011 Golden Eye launched legal action against BSkyB customers in the courts, which were discontinued.

The solicitors Tilly Bailey & Irvine, which acted on behalf of Golden Eye previously, entered a regulatory settlement agreement with the Solicitors Regulation Authority in October 2011 in relation to the speculative invoices sent on behalf of Golden Eye. In January this year the Solicitors Disciplinary Tribunal suspended the solicitors Andrew Crossley of ACS:Law from the profession following an action brought by the Solicitors Regulation Authority.

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