A US Federal Court has issued a preliminary injunction against the controversial movie service Zediva, which streams movies to consumers without direct permission from the rights-holders.

Zediva purchases DVDs, plays them through physical DVD players then streams the output to users, who are able to control the DVD player remotely via software. Content owners receive no revenue from the movies other than Zediva’s initial purchase of the DVD. This allows Zediva to offer streaming rentals at a much lower price than competitors who license streaming rights from the copyright owners.

As reported in our March newsletter, Zediva was relying on a combination of the first sale doctrine, US jurisprudence allowing rental of copyright materials, and some ambiguities in US law relating to the distribution of copyright material over the internet to run its service.

However on 2 August this year, US District Judge John Walter sided with the film studios and granted a preliminary injunction that will essentially shut Zediva down. The judge stated that the copyright owners had “the exclusive right to decide when, where, to whom, and for how much they will authorize transmission of their Copyrighted Works to the public”, and that Zediva had interfered with these exclusive rights. [1]

[1] Reuters at: http://www.reuters.com/article/2011/08/02/idUS317363613120110802

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The US Second Circuit Court of Appeals has rejected a settlement agreement that would have allowed database providers to use freelance-created content without direct permission from the authors of that content.

The now-rejected settlement was negotiated between several large publishers (including the New York Times), author groups and database providers, and had an ‘opt-out’ approach somewhat similar to the Google Books settlement (also rejected by the courts).

The settlement had originally been accepted by the US District Court, but a challenge to this decision by a group of aggrieved authors saw the matter progress all the way to the US Supreme Court, which in March 2010 sent the matter back to the Second Circuit Court of Appeal for reconsideration.

The parties to the case (Reed Elsevier v Muchnick), which is commonly known as the ‘Freelance’ case, will no doubt be considering their options for a revised settlement, and the outcome – along with the outcome in the Google Books settlement – will be keenly watched by authors, publishers and distributors alike.

For more background on this case, see our July newsletter at http://www.copyright.org.au/news-and-policy/details/id/1981/

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The film companies suing internet service provider iiNet for copyright infringement have won leave to appeal to the High Court to overturn a recent Full Federal Court appeal decision in favour of iiNet.

While the Federal Court dismissed the action against iiNet in February this year, the High Court has found sufficient basis to examine the issues of the case.

In announcing that the film companies would seek leave to appeal to the High Court, the Executive Director of AFACT, Neil Gane, stated that tthey would make the case that iiNet did have sufficient knowledge of users’ infringing activity. Gane said: "The Full Federal Court unanimously found that iiNet had the power to prevent the infringements of its users from occurring and that there were reasonable steps it could have taken, including issuing warnings…However two judges of the Full Court went on to find that iiNet had not authorised the infringements of its users…We say they did not apply the legal test for authorisation correctly." [1]

The High Court has today accepted that there are issues to be examined by granting special leave to appeal.

[1] See AFACT’s press release at: http://afact.org.au/pressreleases/2011/24-3-2011.html

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At a time when debate is raging about ways to tackle online infringement of copyright, an English court has handed down a landmark decision ordering England's largest ISP, BT, to block access to an infringing website.

This is the first time that section 97A of the UK’s Copyright, Designs and Patents Act – which implements obligations under Europe’s Information Society Directive – has been tested. This section enables injunctions to be granted where an ISP "has actual knowledge of another person using their service to infringe copyright".

The case follows on from a previous decision that a website operated by Newzbin Ltd infringed the copyright of the film studio applicants. The film studios contended that the only way to obtain effective relief to prevent or at least reduce the scale of these infringements was to seek an order for BT to block access to the NewzBin site. The High Court of England and Wales found in the studios favour.

This outcome is in contrast to the Full Federal court decision in Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23 (24 February 2011). The High Court's discussion of the meaning of "knowledge" under section 97A of the CDPA compared with 1911 and 1956 UK Copyright Acts will be of interest to Australian readers.

Full text of the High Court's decision is available here;

http://www.bailii.org/ew/cases/EWHC/Ch/2011/1981.html

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The UK Court of Appeal yesterday backed a High Court decision made in November 2010, which found that copyright subsisted in both headlines and extracts from various articles reproduced by the media monitoring company Meltwater.

The High Court case was brought by Newspaper Licensing Agency (NLA) against Meltwater News and Public Relations Consultants Association Limited (PRCA). However the appeal was brought solely by the PRCA, which argued that the original decision effectively required end users of media monitoring services such as Meltwater to get two licences for one act of copying.

The Court of Appeal rejected the PRCA’s argument with the following statement from the Chancellor, Sir Andrew Morritt: “In my view, the receipt and use by an end-user of Meltwater News will constitute an infringement of the copyright of the Publishers in either or both the headlines or the articles on their websites…It follows that…the end-user will for that reason alone require a [licence] to avoid such liability. That is the context in which PRCA’s submission must be considered.” [1]

To read the full text of the appeal decision, click on the link below:

[1] http://www.bailii.org/ew/cases/EWCA/Civ/2011/890.html

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Two and a half decades after the High Court first considered copyright in computer programs (Computer Edge v Apple Computer 1986), a new case is set to test the boundaries.

CA is an international IT software management company, whose products include software to manage large databases on mainframe computers. It is alleging copyright infringement in the source code of two of its computer programs by ISI Pty Ltd, an Australian company specialising in IT services. It is also alleging breach of confidence in documents relating to the computer programs.

The hearing commenced on 18 July in the Federal Court before Justice Bennett, and is set down for three weeks. The case is likely to examine the boundaries of copyright in a computer program: Can copyright subsist in a macro? What is a substantial part of a computer program? Can reverse engineering amount to copyright infringement?

A detailed description of the factual background to the case can be found at: http://www.austlii.edu.au/au/cases/cth/FCA/2009/900.html

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