19 February 2003

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Simkins early warning - Digital Media

SONY v EASYINTERNETCAFE: A LOOPHOLE FOR HOME CD BURNING?

The widely anticipated victory for Sony and the other record company
claimants in Sony v Easyinternetcafe seemed at first glance scarcely worthy
of comment. However, the decision of Mr Justice Peter Smith may carry a
sting in the tail for the music industry.

The facts of the case are well known. Easyinternetcafe offered its
customers a service whereby files downloaded from the internet by a customer
could be copied onto a CD-R in return for a £5 charge. There was evidence
that customers of Easyinternetcafé's CD burning service were - surprise,
surprise - downloading music files to be copied onto CDs for them by the
internet café staff.

Easyinternetcafe's very determined smokescreen defence was that it did not
know and did not want to know what it was copying for its customers. The
judge was having none of this and quickly found Easyinternetcafé liable for
copyright infringement. So far so obvious.

The real interest of the case is in comments made by the judge in dismissing
one of the internet café's defences. Easyinternetcafe argued that it and
its customers were entitled to rely on the "home recording" exception in
section 70 of the Copyright, Designs and Patents Act 1988 allowing for the
making of a recording of a broadcast or a cable programme for private and
domestic use to enable it to be viewed or listened to at a more convenient
time.

This was no help to the internet cafe as Mr Justice Peter Smith dismissed
the suggestion that its "extensive business operation" could be considered
private or domestic use. As the judge succinctly put it: "The defendant is
not copying for the purpose of private and domestic use. It is copying for
the purposes of selling the complete CD-R for £5."

He did go on to comment on whether the internet was a form of cable
programme service to which the home recording exception therefore applied.
This issue has not been decided by the English courts.

It has been held in Scotland in the Shetland Times v Wills decision that the
operator of a website posting news articles was operating a cable programme
service.

That decision has been criticised by media lawyer Clive Gringras in his book
"The Laws of the Internet". He rightly points out that a cable programme
service is defined as "sending visual images, sounds or other information by
means of a telecommunications system otherwise than by wireless telegraphy",
but few websites are "sending" information to visitors. It is more
technically correct to speak of information being retrieved from the website
by the visitor.

Other commentators, notably the editors of the leading work "The Modern Law
of Copyright and Designs" who include leading IP judge Sir Hugh Laddie, have
supported the Shetland Times decision. This support is at least partly
based on the pragmatic consideration that if the internet does not fall
within the definition of cable programme service there will be a gaping hole
in the coverage of copyright law.

Although he did not have to decide the point Mr Justice Peter Smith said
that he thought the decision in the Shetland Times case was correct,
"comforted by the fact that that is supported by Laddie."

He went on to spell out the implications of the home recording exception
applying to material copied from the internet. It means "that private
individuals can build up a substantial private library."

The full legal and practical implications of this loophole are not yet clear
but it is one further worry for the already embattled music industry.

Dominic Free and Nic Garnett
19 February 2003
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