The High Court in Britain has ruled that Hollywood studios cannot recoup profits from copyright infringement by operators of the website, Newzbin2. This decision follows two permanent injunctions imposed against the site, one against the original Newzbin1 and one for the hacker-resurrected Newzbin2. The site, which offered free downloadable links as well as a premium pay-for subscription service, shut in November, 2012, and despite this most recent ruling, the studios, in a statement to THR Esq. declared victory overall in the matter. The Tuesday decision by Justice Guy Richard Newey focused on potential chilling effects of a decision for Plaintiffs and copyright owners in general. He determined that an alternative finding might stifle individual desire to pursue an activity, inhibiting “innovation and creativity.” He made an analogy that facts in this case were akin to selling infringing DVDs on another’s lawn, concluding that if the lawn owner cannot claim profits from sales of those DVDs, the discs’ copyright owners also cannot. How might this case resolve, though, under U.S. law? Newey’s fear of a chilling effect would be (and probably still is) misplaced under American copyright law: Newzbin2, arguably, does not engage in creation or authorship, nor any other activity worthy of First Amendment protection. While folks behind the site may be innovators, their innovation is solely geared toward illegal activity, i.e. infringement. Section 504 of the U.S. Copyright Act of 1976 provides a broader concept of damages than does Section 229 of Britain’s Copyright, Designs and Patents Act of 1988. The U.S. section permits recovery for profits from infringement not accounted for in actual damages. In the British version, profits is a word absent; the provision limits recovery to “damages, injunctions, accounts.” A U.S. court, therefore, likely would have decided differently whether studios were entitled to profits.
British court balks at studios profit demand
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