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You are here: BAILII >> Databases >> England and Wales Patents County Court >> Media CAT Ltd v Adams & Ors [2011] EWPCC 6 (08 February 2011)
URL: http://www.bailii.org/ew/cases/EWPCC/2011/6.html
Cite as: [2011] EWPCC 6, [2011] FSR 28

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Neutral Citation Number: [2011] EWPCC 6
Case No: OCL 70086, OCL 70086, OCL 70088, OCL 70101,
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

IN THE PATENTS COUNTY COURT

St. Dunstan's House
133-137 Fetter Lane
London EC4A 1HD
08/02/2011

B e f o r e :

HIS HONOUR JUDGE BIRSS QC
____________________

Between:
Media C.A.T. Limited
Claimant
- 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,
Defendants

____________________

Tim Ludbrook (instructed by ACS:Law) for the Claimant
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

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    His Honour Judge Birss QC :

  1. The actions before me concern allegations of copyright infringement. In each case the defendant is an individual who is alleged to have infringed copyright in pornographic films. It is alleged that the defendants have infringed copyright essentially as a result of the use of peer to peer (P2P) file sharing software on the internet. The cases are all brought by the claimant Media C.A.T. Ltd ("Media CAT").
  2. The hearing took place on 24th January 2011. Mr Tim Ludbrook instructed by the solicitors ACS:Law appeared for Media CAT. Mr Ludbrook had only come into the case relatively recently and was not responsible for Media CAT's letter of claim (see below) or for the Particulars of Claim (see below). I make no criticism of Mr Ludbrook. Mr Guy Tritton instructed by the solicitors Ralli Solicitors LLP appeared for Mark Jimack, Allan Billington, Christopher Birkett, Wayne Bacon and Christopher Beck. Mr Francis Davey was instructed by solicitors Lawdit. At the stage of filing his skeleton argument Mr Davey appeared for Katherine Taylor, Lyndsey Gonzalez-Romero, Keith Wood, William Wickham and David Cundall. The remaining defendants did not appear and were not represented.
  3. The actions against Katherine Taylor, Lyndsey Gonzalez-Romero, Keith Wood, David Cundall and Elaine Cox may have been settled. As at 24th January no consent orders disposing of them were ready for the court's approval but I was told that concluded settlement agreements had been entered into with Katherine Taylor, Lyndsey Gonzalez-Romero, Keith Wood and David Cundall. Thus at the hearing Mr Davey only appeared for Mr Wickham.
  4. The actions

  5. The claimant Media CAT has claimed at various stages to be (i) a copyright protection society (whose members are the owners of the copyright in the works), (ii) the exclusive territorial licensee of rights in the work, and (iii) to represent the owners of copyright or exclusive licensees of that copyright. It is none of those. Copyright protection societies or collecting societies (such as the PRS, MCPS and the like) are reputable organisations concerned with licensing copyright in various contexts under licensing schemes. Media CAT is not one of those and Mr Ludbrook, Media CAT's counsel at this hearing, accepted Media CAT was not a "copyright protection society". No copyright lawyer would use that term to describe Media CAT. Also no copyright lawyer would call Media CAT an exclusive territorial licensee of the copyright. It does not have a licence to do any of the acts restricted by copyright (such as copying the films or issuing them to the public, see sections 16(1) and 92(1) of the Copyright Designs and Patents Act 1988). Finally Media CAT does not represent the copyright owners in the sense that it brings the proceedings in a representative capacity nor do I understand it to act on behalf of the copyright owners in the sense that its acts can bind the copyright owners by a form of agency. Mr Ludbrook did not seek to persuade me that Media CAT was any of these things.
  6. So who is Media CAT? At best it is a company with a contract which gives it "all rights necessary to allow [Media CAT] to inquire claim demand and prosecute through the civil courts where necessary any person or persons identified as having made available for download a film for which [an agreement] has expressly licensed". The expression quoted comes from clause 1.1.1 of an agreement between Media CAT and a company called Sheptonhurst Ltd dated 19th November 2009. According to the agreement Sheptonhurst are the owners of copyright in the films (clause 2.2) and the agreement purports to give Media CAT the right I have described. It also purports to give Media CAT the "sole and exclusive right to demand collect and receive all revenues in respect of illegal file sharing" on the terms of the agreement. The extent to which it is legally possible for a company like Media CAT to acquire the rights it claims in relation to copyright is open to question and has not been tested in court.
  7. The cases arise as follows. Media CAT entered into agreements of the kind mentioned above with copyright owners like Sheptonhurst Ltd. The idea is that Media CAT would obtain a list of IP addresses linked to the use of P2P file sharing software and linked to a particular film. IP addresses are numerical references used to identify entities on the internet. In the context of this case the entities may be computers or home broadband routers. A company called NG3 Systems Ltd is mentioned in the Particulars of Claim as having conducted an exercise of "monitoring the unauthorised exploitation of the work on the P2P network" (paragraph 4, Particulars of Claim). As a result NG3 Systems prepared a report which links a particular film, an IP address on a given date and time and a P2P network (see Particulars of Claim paragraph 4(3)). Although there are many parallel cases, the Particulars of Claim in all of them are essentially the same and this judgment will not distinguish between them unless it is necessary to do so.
  8. There is no dispute that P2P file sharing software can be used to infringe copyright (see e.g. Polydor Ltd v Brown [2005] EWHC 3191 (Ch)) but that can be said of many things. Proof that a person owns a photocopier does not prove they have committed acts of copyright infringement. Mr Davey submitted that the technique used in this case to link IP address, film and P2P network does not establish that any infringement has taken place at all. He said the IP address had come from a central tracker system. In broad terms the central tracker system keeps track of the IP addresses from which a file (such as a film) is available on a given P2P network. But there is more to it than that. He said trackers were not assiduous in keeping their lists up to date, that IP addresses get reallocated and that an IP address may end up on the tracker list even when a person starts downloading a file onto their home system but then stops immediately. No file is downloaded (or so little of the file as to be irrelevant) but the tracker system has logged the IP address as a node on the P2P network. Whether Mr Davey's points are right or wrong cannot be decided on this occasion. They would plainly be matters to explore with proper evidence, no doubt including the evidence of computer experts. Mr Davey submits that it has never been established whether Media CAT's approach does in fact reveal that copyright infringement has actually taken place.
  9. It might be thought that Polydor Ltd v Brown (above) shows that using P2P software amounts to copyright infringement but that would be an error. Assuming (which is not clear) that the defendant in that case was identified as a possible infringer using a technique similar to the one Mr Davey has described, paragraph 4 of the judgment of Mr Justice Lawrence Collins (as he then was) indicates that a sample of files were then downloaded from the computer of the defendant Mr Bowles by the BPI and then Mr Bowles was sent a letter of claim. (The BPI is a trade body. The initials formerly stood for British Phonographic Industry.) The defendant admitted he had used P2P software on his computer but had been unaware that he was distributing music from his computer as a result. He was shown to have made more than 400 audio files available to other users on the Nutella (or rather Gnutella) P2P network. Collins J held that the admitted acts were indeed infringing under s16 (1)(d) and 20 of the Copyright Designs and Patents Act 1988. The fact that Mr Bowles did not know or have reason to believe that what he as doing was an infringement was not a defence.
  10. In its pleaded case and letter of claim, Media CAT contends that whoever these IP addresses relate to has been involved in copyright infringement relating to a copy of particular films belonging (for example) to Sheptonhurst. Indeed based on paragraphs 4 and 7 of the Particulars of Claim, the material derived from the monitoring exercise (plus the defendant's name) are the "best particulars" of infringement of copyright that Media CAT is able to give at the stage of pleading out the Particulars of Claim. It is all it has.
  11. Polydor v Brown shows that P2P software can be used in such a way as to infringe copyright but it does not show that the material relied on to support the Particulars of Claim in these proceedings establishes any such thing. Mr Davey's submissions may be all wrong but the fact remains that the point has not been tested. It would require significant technical evidence to do so. The Chancery Division of the High Court and this Patents County Court are well able to handle evidence of that kind as and when required but as yet it has not happened.
  12. In any case Media CAT obtained the list of IP addresses from the monitoring exercise and applied to the Chancery Division of the High Court (Chief Master Winegarten) for orders under the Norwich Pharmacal jurisdiction. Norwich Pharmacal Co. v Commissioners of Customs & Excise [1974] AC 133 arose from a patent case about a compound called furazolidone which was incorporated into chicken feed. Furazolidone was covered by the patent. The patentee could see that consignments of furazolidone were being imported into the UK but could not tell who as responsible. None of the imports were licensed and thus were infringing. The patentee applied to the court for an order that Customs, who had in their possession documents which identified the importers, should disclose these identities so that Norwich Pharmacal could take proceedings for patent infringement against them. Customs argued on various grounds that Norwich Pharmacal had no right to the information. The House of Lords held that a person innocently caught up in the wrongdoing of another so that he is more than a mere witness can be compelled to disclose the identity of the wrongdoer so that proceedings may be brought against the proper defendant. The identities were disclosed.
  13. Norwich Pharmacal was decided in 1973. I have always understood – although note that the report does not say so in terms– that the judgment of Graham J decided in 1976 and reported as Morton Norwich v Intercen [1978] RPC 501 was a follow up case which arose as a result of the information obtained from Customs. In Morton Norwich Graham J addressed the question of whether a Dutch defendant who consigned furazolidone by air from Holland on terms cif Gatwick but denied liability for patent infringement was liable in English patent proceedings. He held that they were liable as joint tortfeasors. The judgment records that validity of the patent was admitted and there was no argument the relevant claims claimed the substance itself however made (see p510 line 19-23). Norwich Pharmacal's underlying cause of action was tested in court against the persons identified, who were obviously free to take whatever point was properly open to them and defend themselves.
  14. The Norwich Pharmacal jurisdiction has been considered and used in many further cases and wider contexts. It plays an important role in the courts armoury to see that justice is done. It is not a requirement that the applicant will be bringing court proceedings, see British Steel v Granada Television [1981 AC 1096 HL, Lord Fraser at p1200 C-G and Ashworth Hospital Authority v MGN Ltd [2002] UKHL 29 [2001] 1 WLR 2033, Lord Woolf CJ at paragraphs 41-47. In Ashworth the reason for seeking the identity of the person in question was to discipline the person, which in practise would mean they would be dismissed (see paragraph 19).
  15. Nevertheless there is a potential difficulty with the Norwich Pharmacal process which is put into focus by the cases before me. The respondent to the Norwich Pharmacal application for disclosure - while obviously wishing to ensure that an order is not made when it would be inappropriate to do so – has no direct interest in the underlying cause of action relied on. The respondent is not going to be sued. A Norwich Pharmacal application is not and cannot be the place in which to try the cause of action. That happens when the person's identity is revealed and then usually proceedings are commenced. Even if proceedings are not commenced – in a situation like Ashworth where a single name is being sought in order to discipline the person – no doubt that person would be able to take whatever steps to defend themselves they wished to and if necessary the matter could come to an appropriate court or tribunal.
  16. Chief Master Winegarten made Norwich Pharmacal orders in the present case. The respondents were internet service providers (ISPs) whose records can identify the names and addresses of their subscribers based on IP addresses at a given date and time. Amongst other things Media CAT presented Chief Master Winegarten with statements from technical experts to support their case. The Norwich Pharmacal orders were made and as a result the ISP provided the names and addresses of subscribers which the ISP stated represented the various IP addresses identified by Media CAT. Tens of thousands of names and addresses have been produced to Media CAT as a result of the 3 or 4 relevant Norwich Pharmacal orders, the earliest of which was in November 2009. There have been other similar Norwich Pharmacal orders in recent years, before November 2009, which although not sought by Media CAT have been based on the same general approach. It is remarkable therefore that the underlying causes of action on which all these cases are based has not been tested at trial.
  17. Mr Crossley's first witness statement stated that the claimant's position had been made completely clear to Chief Master Winegarten. Mr Crossley explained how matters had proceeded before the Chief Master and refers to the fact that the agreements and the letter of claim were placed before him. I understood the point of Mr Crossley's evidence to be that Media CAT's case and proposed approach had been explained to Master Winegarten and been ratified on that basis. I should record that Mr Ludbrook in his submissions to the court put the matter in a different way. He submitted that the test which should have been and doubtless was applied by the Chief Master was that a wrong must have been carried out or arguably carried out by an ultimate wrongdoer in order to grant the Norwich Pharmacal order. Mr Ludbrook's point was that this was quite different from the test to be applied by the court at trial to determine whether liability in tort had been incurred by a given defendant in relation to particular conduct. Thus he submitted that unless it was clear to the court that some manifest injustice had been perpetrated in relation to the Orders of the Chief Master, it should form no part of the court's consideration of the issues arising now, to consider whether what was before Chief Master Winegarten (which was self evidently sufficient to satisfy the Chief Master) would actually succeed or fail at a trial. I accept Mr Ludbrook's submission in that the question before the Chief Master was not and never could be whether Media CAT would succeed at trial and I also accept that the question before me is not whether the material before the Chief Master would succeed at trial. I can only deal with the matters before me as they appear today. It is no part of my function to second guess Chief Master Winegarten. Insofar as there is any difference between us it may be due to the different perspectives we have and the different parties before the court on each occasion. The Respondents before the Chief Master were the ISPs, who were not themselves accused of infringing copyright. The counter-parties before me are defendants being sued for copyright infringement.
  18. Once Media CAT had the names and addresses the real exercise began. Media CAT's solicitors ACS:Law have written letters to tens of thousands individuals. The first letter (the "letter of claim") consists of 6 pages of legal and technical discussion, three attachments and an invitation to look on ACS:Law's website for "Notes on Evidence". A claimant or potential claimant in a civil case is not required by the law to write a mealy mouthed or apologetic letter to a potential defendant. Robust correspondence between lawyers and sophisticated parties is part of the legal process. However letters which deal with issues of the complexity of the ones arising in this case need to be considered very carefully if they are addressed to ordinary members of the public.
  19. The letters assert Media CAT is a copyright protection society (which it is not) and the exclusive territorial licensee of rights granted by the copyright owner (which it is not). The copy of the letter of claim before me names Darker Enterprises Ltd as the "Original Rights Owner". The IP address information is provided as well as a spreadsheet sent from the ISP identifying the individual. The letter would be understood by many people as a statement that they have been caught infringing copyright in a pornographic film, that Media CAT has evidence of precisely that and that a court has already looked into the matter (a copy of the Order of Chief Master Winegarten is provided). They may think that their own ISP has decided that they are indeed infringing. The letter states that "our client's evidence shows you are responsible for committing one or more of these infringements whether directly yourself or by you authorising (inadvertently or otherwise) third parties to do the same."
  20. A sum of £495 is demanded as compensation. This sum is said to include damages as well as "ISP administration costs (and its legal costs where applicable), a contribution to our clients legal costs incurred to date and all additional costs". However no breakdown of the figure is given. The letter states that if this sum is agreed no further payment will be sought in relation to the infringement(s) being written about and the matter will be closed. In a section headed "next steps - commencing proceedings" it is made clear that legal proceedings will be commenced if the matter cannot be settled to Media CAT's satisfaction. This court (the Patents County Court) is not mentioned by name but it is clear that the Patents County Court would be an appropriate court in which to bring them.
  21. The letter ends with a statement that "this letter complies with the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes (January 2004) a copy of which is available on our website". That sounds official but there is in fact no formal Pre-action Protocol for Intellectual Property. The CPR includes a Practice Direction – Pre-action Conduct which applies generally and 9 specific pre-action protocols are in force which deal with particular areas of practice. Intellectual Property cases are not one of those areas. There was an attempt some years ago to settle a pre-action protocol for IP cases but the protocol was not adopted by the court. It may be the informal one is being referred to. The absence of an official protocol is the reason why CPR Pt 63 r63.20(2), which relates to proceedings before this the Patents County Court, refers only to the general Practice Direction – Pre-action Conduct.
  22. Perhaps many, maybe more of the recipients of these letters have been squarely infringing the copyright of Sheptonhurst on a major scale and know that they have been doing exactly that. They may think £495 is a small price to pay and settled immediately. That is a matter for them. However it is easy for seasoned lawyers to under-estimate the effect a letter of this kind could have on ordinary members of the public. This court's office has had telephone calls from people in tears having received correspondence from ACS:Law on behalf of Media CAT. Clearly a recipient of a letter like this needs to take urgent and specialist legal advice. Obviously many people do not and find it very difficult to do so. Some people will be tempted to pay, regardless of whether they think they have actually done anything, simply because of the desire to avoid embarrassment and publicity given that the allegation is about pornography. Others may take the view that it all looks and sounds very official and rather than conduct a legal fight they cannot afford, they will pay £495. After all the letter refers to an order of the High Court which identified them in the first place. Lay members of the public will not know the intricacies of the Norwich Pharmacal jurisdiction. They will not appreciate that the court order is not based on a finding of infringement at all.
  23. One odd thing is that if tens of thousands of letters have been sent threatening legal action, where are all the legal actions? The Patents County Court is clearly an appropriate court to bring a claim against an individual for copyright infringement and yet there are only 27 cases pending. Surely out of 10,000 letters it cannot be that only 27 recipients refused to pay.
  24. In any event over a period from August to November 2010 Media CAT commenced 27 cases before the Patents County Court for copyright infringement. In November they applied for default judgment in 8 of them using a procedure almost unheard of in intellectual property cases called a request for judgment (RFJ). It is without notice to the defendant. These came before me on paper and were dealt with without a hearing. On 1st December 2010 they were rejected (see Media CAT v A [2010] EWPCC 017). The judgment questioned whether the RFJ procedure was appropriate for complex copyright cases of this kind. One feature of the RFJ procedure is that it is designed for claims for specified sums of money (and certain other claims) where no judicial decision is required (see The White Book at 12.0.2). As it happens in the Patents County Court there is only a judge to handle all such matters and so a judicial decision was unavoidable.
  25. The judgment also analysed the Particulars of Claim briefly and raised a number of concerns with the way the matter was presented. At that stage neither the letter of claim nor the agreement were available. Notably the Particulars of Claim is rather more accurate than the letter about the nature of Media CAT's rights. Although the document does plead that Media CAT represents copyright owners (when it does not) the Particulars of Claim does not pretend that Media CAT are a copyright protection society or that Media CAT is even really an exclusive licensee. The Particulars of Claim considered in that judgment states that "The claimant has an agreement with the Rights Owner of the exclusive license in the United Kingdom that gives to the Claimant the express right to indentify [sic], pursue and prosecute instances of copyright infringement of various works, including, inter alia the film named "5 Linsey Dawn McKenzie Films on Tape") ("the Work") that take place through peer to peer file sharing networks". (see paragraph 3 of Media CAT v A (above)).
  26. Mr Tritton submitted that this contrast between the Particulars of Claim and the letter of claim showed that it was clear on the face of the Particulars of Claim that the letter of claim had been deliberately misleading in its description of Media CAT's standing to bring a claim. He reasoned that the Particulars of Claim showed that Media CAT's advisers did appreciate that Media CAT had no exclusive copyright licence, all it had was a bare right to litigate. In my judgment he is correct that the letter misrepresents Media CAT's standing to bring copyright proceedings. As to Mr Tritton's reasoning that the misrepresentation was deliberate, I am in no position to make a finding on that on the material before me.
  27. That the true nature of Media CAT's right (as pleaded in the Particulars of Claim) raised a question mark over their ability to be a claimant at all in a copyright case, would be obvious to any intellectual property lawyer. It was raised in paragraph 19(i) of Media CAT v A. The judgment also made the point that on any view the claimant did not appear to have the right to sue without joining the copyright owner under s102 of the 1988 Act. The precise terms of s102 will be addressed below.
  28. The Particulars of Claim also mentioned unsecured internet connections and tied in with that alleged infringement by the individual defendant either by infringing themselves or "by allowing others to do so". The judgment notes that I am aware of no published decision in this country which deals with the issue of unsecured internet connections in the context of copyright infringement and refers in passing to a decision of German Bundesgerichtshof (BGH) on the point. The point about "allowing" is that the word used in s16(2) of the 1988 Act is "authorising" not "allowing". They are by no means the same and the difference may be very important if the allegation is about unauthorised use of an internet router by third parties.
  29. This question of unsecured internet connections and infringing by "allowing others" is a critical one since Media CAT's monitoring exercise cannot and does not purport to identify the individual who actually did anything. All the IP address identifies is an internet connection, which is likely today to be a wireless home broadband router. All Media CAT's monitoring can identify is the person who has the contract with their ISP to have internet access. Assuming a case in Media CAT's favour that the IP address is indeed linked to wholesale infringements of the copyright in question (like the Polydor case (above)), Media CAT do not know who did it and know that they do not know who did it. The Particulars of Claim are pleaded in a way to address a problem which is very old and very well known in intellectual property cases (see e.g. The Saccharin Corp v Haines (1898) 15 RPC 344). There the patentee had patents on all known methods of making saccharin and so, even though the patentee did not know how it was made, the defendant's saccharin must be infringing one way or another. Such saccharin type points arise frequently when a claimant contends that despite a lack of information about some aspect of the matter, one way or another the defendant is liable for infringement.
  30. Media CAT's case on this is in two parts. Of course Media CAT cannot know who actually used the P2P software, so in paragraph 3 of the Particulars of Claim they plead that the software was used either by the named defendant who was identified by the ISP, or by someone they authorised to use the internet connection or someone who gained access to the internet connection "due to the router having no or no adequate security". Then in paragraph 5 the plea is that "in the premises" the defendant has by himself, or by allowing others to do so, infringed. So taken together these two paragraphs show that the Particulars of Claim is pleaded on the basis that one way or another the defendant must be liable for the infringement which is taking place.
  31. But the argument is based on equating "allowing" and "authorising" and on other points. What if the defendant authorises another to use their internet connection in general and, unknown to them, the authorised user uses P2P software and infringes copyright? Does the act of authorising use of an internet connection turn the person doing the authorising into a person authorising the infringement within s16(2)? I am not aware of a case with decides that question either. Then there is the question of whether leaving an internet connection "unsecured" opens up the door to liability for infringement by others piggy backing on the connection unbeknownst to the owner. Finally what does "unsecured" mean? Wireless routers have different levels of security available and if the level of security is relevant to liability - where is the line to be drawn? No case has decided these issues but they are key to the claimant's ability to solve the Saccharin problem and say – one way or another there is infringement here.
  32. Notable again is the contrast between the letter of claim and the Particulars of Claim. The letter simply asserts that the defendant has infringed "either directly yourself or by you authorising (inadvertently or otherwise) third parties to do the same". The letter makes no mention of unsecured internet connections. It does not face up to the Saccharin point. Again the Particulars of Claim is rather more frank than the letter. The Particulars of Claim faces up to the difficulty and tries to put a case which deals with it, but it all based on untested legal and factual propositions and issues of technology.
  33. Conclusions on the letter of claim in the light of the Particulars of Claim

  34. In my judgment, in the light of the material now available and the parties' submissions, the letter of claim does misrepresent Media CAT's standing to bring proceedings. The letter also relies on the untested point about IP addresses. If Mr Davey's submissions about IP addresses are well founded then the letter would materially over state the merits of Media CAT's case. In any event the letter materially overstates the untested merits of Media CAT's approach to showing that "one way or another" the named recipient is liable for infringement (the Saccharin point).
  35. After the RJFs

  36. After the judgment in Media CAT v A on 1st December 2010 the court office received a letter from Mr Billington, a defendant in one of the cases. The letter complains about various aspects of the way in which Media CAT's case was being conducted. The letter is set out in the judgment dated 17th December 2010 (Media CAT v Billington [2010] EWPCC 018). That judgment explains that I took the unusual step of making an order of the court's own motion to convene a hearing in all the 27 Media CAT cases in the Patents County Court files. The hearing was convened for Monday 17th January 2011. The judgment ended with the words: "The parties may wish to consider proposing a timetable for the orderly resolution of this case, disclosure and requests for further information." (paragraph 12).
  37. After that the court received a number of phone calls from unrepresented defendants and some letters. The longest letter was from Mr Batstone (one of the 27 defendants). His case was one of the ones covered by the RFJ judgment. His letter asked that the claim against him be struck out and described it as "extortion via legal process". He says he is completely innocent and described the claim as malicious. The letter includes the following extracts:-
  38. "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."
  39. The letter annexes five pages of further material, referring to a number of websites which apparently contain coverage and commentary about this matter. One striking element in the annexes is a report that "According to Andrew Crossley, ACS:Law had recovered almost £1 Million from suspected copyright infringers by April 2010". Mr Batstone's letter attributes this to the wikipedia website. Whether that figure is accurate or not I do not know but see paragraph 100 below.
  40. Another letter the court received was from a Mr Stone. He was not a defendant. He claims an expertise in computers, particularly on the question of whether IP addresses produced in this way accurately identify people. He said that tests shows that errors arise at least on some occasions for some ISPs. Of course as with Mr Davey's submissions about IP addresses, I cannot resolve such questions on this occasion.
  41. So the position at about Christmas 2010 was that there were 27 parallel essentially identical cases in the Patents County Court, all coming for the hearing together on 17th January 2011. Although in most cases no defence had yet been filed, there were cases in which the defendant had filed a defence and yet no attempt had been made to convene a case management conference (CMC) to obtain directions to bring the cases to trial. A claimant eager to pursue their claim would usually be pressing to organise a CMC to get on with the case.
  42. Then on Thursday 13th January, two working days before the hearing due on the Monday coming a very remarkable thing happened. Mr Crossley of ACS:Law came to the court office with 27 notices of discontinuance. He stated that Media CAT was going to discontinue all 27 claims and then they would all be reissued. He asked the court to vacate the hearing. The hearing went ahead for reasons given in an ex tempore judgment on Monday 17th January.
  43. At the hearing on 17th January Mr Ludbrook appeared for Media CAT and Mr Tritton and Mr Davey appeared for some of the defendants (although slightly fewer defendants than they now appear for). I raised with Media CAT's counsel the question of whether Media CAT needed the court's permission to discontinue. The claimant had assumed that no permission was needed and the claimant's advisers were not ready to deal with that issue on that occasion. The issues were these. First might s102 of the 1988 Act not mean that a claimant in a copyright case who was claiming some form of licence but was not the copyright owner needed permission to proceed to take any step in the action at all without joining the copyright owner? Although discontinuance looks at first sight like the opposite of proceeding with an action – it may be regarded as a step in the proceedings and it might be said Media CAT needed permission under s102. Second CPR Part 19 r 19.3 provides that where a claimant claims a remedy to which some other person is jointly entitled with him, all persons entitled to the remedy must be parties unless the court orders otherwise. So on that basis the copyright owners must be parties and so, although CPR Pt 38 r38.2(1) provides that a claimant may discontinue at any time, r38.2(c) provides that where there are multiple claimants either they all must consent in writing or the court's permission is needed. What happens when there is only one claimant but the rules mandate that there ought to be two?
  44. A particular concern was that although to a lay person discontinuance sounds like the final end of the matter, in fact as lawyers know discontinuance is not the same as a conclusive end of the case. The claimant may restart the very same claim albeit that in some circumstances the court's permission would be needed. As the commentary in the White Book states: (at 38.7.1) "as a matter of common sense a claimant who has brought and then abandoned a claim ought not, as a general rule, to be allowed to start another claim arising out of the same facts." However Media CAT's solicitor had stated that although the claims were to be discontinued, they were all to be reissued. Mr Ludbrook explained that Media CAT wanted to take the course of discontinuing all claims and reissuing them for two reasons. First that it was concerned that the claim forms may not have been served properly in all cases. As to that, although it is quite true that there may well have been some problems with service of some of the 27 claims it was equally clear that in a good number of cases there was no problem at all, because the claims were properly defended or at least had a defendant who had obviously been served albeit that, representing themselves, they had not (yet) filed a defence. The second reason was said to be that Media CAT had considered the issues relating to their pleaded case raised in Media CAT v A (above) and wanted to consider and reformulate their case. However there is a perfectly standard way of proceeding for a party who wishes to deal with problems in their pleading. Amendments are prepared, presented and considered by the defendant and (if necessary) the court, and the case continues without discontinuing anything.
  45. I was provided with a copy of the agreement between Sheptonhurst and Media CAT which purports to give Media CAT the right to bring proceedings. Mr Tritton pointed out that the agreement shows (or appears to show) that a 65% share of all revenues generated from this whole exercise will go to Media CAT's lawyers – ACS:Law. Media CAT receives 15% and Sheptonhurst receive 20% of the revenue. Mr Tritton submitted that the agreement was "champertous" in that it was an assignment of a bare right to litigate and contrary to public policy.
  46. Mr Ludbrook made clear that his client accepted that it would be liable for the defendants' reasonable costs. However Mr Tritton and Mr Davey indicated that they would be seeking costs on an indemnity basis against Media CAT. Based on the Sheptonhurst agreement Mr Tritton questioned the conduct of ACS:Law and indicated that he would be seeking a wasted costs order against the solicitors. He submitted that they were responsible for pursuing a case which they knew or ought to have known was bound to fail (because the agreement cannot give Media CAT the right to sue). He submitted that ACS:Law's conduct brought the legal process and the solicitors profession into disrepute. Mr Tritton and Mr Davey urged me to make an order then and there (called an order to show cause) but I refused to do so since Mr Ludbrook and his solicitor had not had a proper opportunity to deal with the point.
  47. The proceedings were adjourned for a week with an order preserving as far as possible the state of the proceedings – by staying the actions pro tem and suspending the effect of the Notices. The matter to be addressed at the restored hearing was whether Media CAT needed permission to discontinue.
  48. Mr Batstone appeared on 17th January and represented himself. He compromised with Media CAT to have the case against him discontinued with no order as to costs.
  49. The hearing on 24th January

  50. For the hearing on 24th January the claimant filed a first witness statement of Mr Andrew Crossley of ACS:Law dated 21st January 2011. This statement dealt with the Norwich Pharmacal orders (see paragraph 16 above) and explains that ACS:Law inherited clients previously represented by Davenport Lyons. The processes and precedents incorporated by ACS:Law were a direct development of the same processes and precedents used by Davenport Lyons.
  51. The statement explains (paragraph 3) that the Media CAT agreements are not always even with the copyright owner. They are either with the copyright owner or an exclusive licensee. So in some cases the copyright owner does not appear to be involved. When Media CAT's claim is based on an agreement with a mere exclusive licensee it will be all the more important to identify the copyright owner and decide whether or not the case can proceed without them.
  52. The witness statement summarises the proceedings before Master Winegarten and explains that he was shown the letter of claim and proposed a single change to its drafting. The evidence and skeleton arguments before the Master are not before me and (see paragraph 16 above) it is not the function of this court to review that exercise.
  53. In relation to the notices of discontinuance Mr Crossley states that he acted swiftly and appropriately in seeking to protect his client as best he could and "drawing the proceedings to a swift end". Some cases have now been discontinued or dismissed by agreement and will not be reissued. How the claimant decides to deal with the other cases will be a matter for further consideration by it. He explains that his involvement in this work has ended as "I am no longer undertaking this type of work".
  54. Also before the court on 24th January was a witness statement of a solicitor in the firm Ralli, Clare Perchal. This crossed with Mr Crossley's statement but addressed a matter which was not mentioned in Mr Crossley's statement. Clare Perchal's witness statement describes an extraordinary sequence of events. On 13th January ACS:Law had faxed the notices of discontinuance to Ralli for the defendants which Ralli represented. This included Mr Billington. However on the very next day Mr Billington was sent a letter from an entirely new entity called GCB Ltd. In the letter they describe themselves as "agents instructed by Media CAT in relation to infringement of the Work". The letter was an aggressive re-assertion of Media CAT's demand for damages for copyright infringement, including another threat of court proceedings, which was being sent almost simultaneously with the attempt to discontinue the existing proceedings and when Media CAT were stating to the court that the reason they wished to discontinue is that they needed to rethink and reformulate their case. The letter said that ACS:Law had in effect transferred the handling of the case to GCB Ltd. Enclosed with the GCB letter was a copy of a (generic) letter from ACS:Law dated 14th January 2010 confirming that GCB were indeed undertaking this task and that ACS:Law's role in future would be confined to focussing on issuing court proceedings. The GCB Ltd letter also had various annexes. These included a form to fill in with payment details for the recipient to pay GCB Ltd in various ways (by credit card etc.), a copy of the judgment of Collins J in the Polydor case and a copy of a BBC news report from the internet from 2008 of a case about a defendant called Barwinska (see below).
  55. Clare Perchal's witness statement ended with another bizarre piece of evidence. On 18th January Miss Perchal called the telephone number on the GCB letter. The letter describes the number as their "payment centre". There was a recorded message on the line stating "If you have received a letter from GCB Ltd please disregard this letter as GCB is no longer pursuing the matter stated in the letter."
  56. Now apart from anything else Mr Billington was represented by solicitors - Ralli & Co - and ACS Law knew that because on 13th January they had faxed the Notices of Discontinuance for Mr Billington to his solicitors. Accordingly ACS:Law had no business writing to Mr Billington at his home address in these circumstances and neither did GCB Ltd. At the hearing on 24th January Mr Ludbrook was unaware of the witness statement of Clare Perchal and so when asked about it in the course of the hearing he had to take urgent instructions there and then. Mr Ludbrook's submission recognised that Mr Billington should not have been written to in this way because he had instructed solicitors. Apparently Mr Billington was not supposed to have been written to at all because GCB Ltd were only supposed to be writing to individuals other than the 26 defendants. In other words there was no doubt that GCB Ltd had embarked on a campaign of reasserting Media CAT's rights at the same time that Media CAT was telling the court that it wanted to discontinue the cases because it needed to reconsider its case. The only mistake was to have written to one of the defendants then before the court. From the tenor of the submissions it is probable that many such letters were sent out. Apparently former employees of ACS:Law were or had been employees of GCB Ltd (said Mr Ludbrook) although he confirmed that he did not mean they were directors or shareholders of GCB Ltd.
  57. The GCB letter

  58. The GCB letter provides an insight into the way in which Media CAT have been operating in correspondence. The annexes to the GCB letter call for comment. The Polydor case (above) is not an authority which considers whether the particular evidence of involvement with P2P software which is apparent in the present case amounts to copyright infringement. It is not irrelevant but its deployment in this way is capable of leading lay members of the public astray.
  59. The use of a copy of a BBC news report from the internet dated 19th August 2008 of a case about Mrs Barwinska is concerning. The report states that the Patents County Court had given judgment for the claimant (Topwear Interactive) against Mrs Barwinska. The circumstances sound very similar to the present ones (Norwich Pharmacal order, 500 letters to Britons identified as making a game available via file sharing networks, the letter asking for a £300 settlement figure) . The solicitors in that case were Davenport Lyons. The news report includes a quote in the following terms:
  60. "This is a proper intellectual property (IP) court that has made this judgment,"[…] "the previous ones were default judgments where defendants never turned up."
  61. This statement is not accurate. From consideration of the court's file in the Barwinska case it can be seen that the judgment was indeed a default judgment. It was obtained using the RFJ procedure. The case had been issued at the Central London County Court (CLCC) - which is the place in which claims in the Patents County Court are currently issued since the Patents County Court is formally part of CLCC although administered largely separately. The judgment had been entered while the claim was at CLCC under the RFJ procedure. It was not entered by the Patents County Court and it was a default judgment with no notice to the defendant.
  62. After judgment was entered the Barwinska case was transferred to the Patents County Court to handle an inquiry as to damages consequential on the judgment. That matter came before His Honour Judge Fysh QC and he assessed the damages in the sums quoted. So by the time the matter came before HH Judge Fysh QC, the judgment had been entered. While damages were assessed by a specialist IP court, the underlying judgment had already been given. Anyone involved in the Barwinska case must have known that the statement quoted in the news report, that the judgment was not a default judgment, was wrong.
  63. The explanation for GCB Ltd

  64. The explanation given for the GCB Ltd episode by counsel on instructions, which amounts to saying that Mr Billington was threatened by mistake, while it deals with the narrow and by no means trivial question of the conduct of litigation, does not deal with why it is that Media CAT are with one hand telling the court that they need to reconsider their case while on the other hand simultaneously reasserting their claim against other names generated by the Norwich Pharmacal procedure.
  65. A second witness statement of Mr Crossley (which emerged in circumstances set out below) also addressed GCB Ltd to some extent. He said that he will be pleased to clarify the position in a separate statement but can confirm that GCB Ltd is not connected either to himself or his practice in any way other than it happened to employ - albeit briefly - two former employees of his practice neither of whom are solicitors. It has no connection with the claimant other than a contractual engagement to retain it as an agent. He has been informed by David Fisher, director of GCB, and believes that GCB halted work for the claimant on the first day letters were received by identified account holders of internet connections due to abuse and criticism received by GCB Ltd and its auditors. The company has ceased acting and is not accepting any payments.
  66. The actions of Media CAT via GCB Ltd sheds light on Mr Crossley's first statement dated 21st January 2011. At paragraph 7 he addressed the point about whether cases subject to the notices of discontinuance will be reissued. He stated that some cases had settled and would not be reissued and that how the claimant is going to deal with the other cases will be a matter for further consideration by it. One might think a claimant (and their legal adviser) who was giving their claim serious further consideration before perhaps starting it afresh in a different form or dropping it altogether, would certainly not assert the very same claim against other people not (yet) before the court. The GCB episode shows that Mr Crossley's client had every intention of doing precisely that and that ACS:Law were perfectly well aware of it. It is very difficult not to draw the inference that this was nothing more than a last ditch attempt to make some money from the letter writing exercise.
  67. Events at the hearing on 24th January 2011

  68. The purpose of the hearing on 24th January had been to consider the question of permission in relation to the notices of discontinuance. However in the light of the GCB episode, as mentioned above, I asked Media CAT's counsel for an explanation and on instructions he provided the explanation I have referred to.
  69. The hearing adjourned at 1.00 pm as usual for lunch and reconvened at 2.00 pm. Mr Crossley had explained (by counsel) that he was not able to attend court from 2pm because he needed to return home to attend to the needs of his partner and their son, who had been injured in a serious road traffic accident. Of course I did not regard that as any discourtesy at all. However to my surprise at about 3.00pm a second witness statement of Mr Crossley was handed up and, with my permission, read out in court by Mr Ludbrook. The statement addressed matters arising in court that morning. I asked Mr Ludbrook where that left the explanation I had been given for Mr Crossley's absence. I was told that Mr Crossley had tapped out his second statement in court that morning on his lap top and printed it out after 1 pm in order to place it before the court during the afternoon. He had then gone to assist his family.
  70. The notices of discontinuance

  71. The hearing on 17th January had been adjourned in order to deal with the point about whether permission was needed for the Notices of Discontinuance. In their skeleton arguments for this hearing Mr Tritton and Mr Davey raised the wider question of whether the notices were an abuse of process and should be set aside on that basis. CPR Part 38 (r38.4) provides that a defendant in this context has the right to apply to have the notice of discontinuance set aside. One of the bases on which such an application can be made is that the notice is an abuse of process. Faced with point having been raised by Mr Tritton and Mr Davey in their skeleton arguments, Mr Ludbrook had addressed it in a supplemental skeleton and was content to deal with it at the hearing.
  72. It is convenient to deal with both points together. It is clear that the Court has the power to set aside a notice of discontinuance if it would be an abuse of the process of the court. Mr Tritton submitted that these notices were indeed an abuse and Mr Davey supported that submission.
  73. In Castanho v Brown and Root H.L. [1981] A.C. 557 a notice of discontinuance had been served without leave in a case in which the plaintiff (claimant) had secured an admission of liability from the defendant and an interim award of damages. The plaintiff wanted to then sue again in the USA with his lawyers there acting on a contingency fee basis. On the face of it the rules as they then were did not require leave to be given in the circumstances. It appeared that the rules ought to have provided for leave in those circumstances but they did not. It appeared to be a mistake. The first question was whether the courts could make good the mistake by reading in a requirement for permission which was not there. The House of Lords held they could not. Lord Scarman (at 571 B - 571 F) said this:
  74. 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"; [1980] 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.
  75. So a need for permission could not be read into the rules and the question was then whether a notice of discontinuance could be an abuse of the process of the court. On this Lord Scarman continued:
  76. 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]
  77. Thus a notice of discontinuance can be an abuse of process and if it is, it will be struck out. It may be the claimant (plaintiff) will be permitted to discontinue but only on terms. As Lord Scarman put it, 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.
  78. Mr Davey cited Gilham v Browning [1998] 1 WLR 682 C.A. at 688 e – 690E to show that the county court also has this inherent jurisdiction to set aside a notice of discontinuance if it would be an abuse of process too. Two particularly relevant extracts the judgment of May L.J. are:
  79. 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]
    and:
    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]
  80. Mr Ludbrook for Media CAT agreed that this court has jurisdiction to set aside a notice which was an abuse of process but contended that these notices were not abusive. He submitted the defendants would be in no worse a position if the actions were discontinued than if they had never been brought at all and that the collateral advantage envisaged by Lord Scarman must be one gained by the claimant rather than some other party (such as a copyright owner which should have been but was not a party). Mr Tritton and Mr Davey submitted the notices were an abuse on a number of bases. They submitted that a notice which would have the collateral advantage of avoiding the consequences of some other breach of the rules or a statute, was an abuse of the court's process. One collateral advantage they referred to was that - at least in the claims in which a defence had been filed - while r 38.7 meant that Media CAT would require permission to restart the claim, the copyright owner would not. So the defendant could be sued again by the copyright owner without permission being required. They also contended that the wider approach to preventing parties from litigating points which could and should have been raised in an earlier case (the Henderson v Henderson doctrine) might work the same way for defendants who had not yet served a defence. Second they submitted that in this case the claimant was seeking to avoid judicial scrutiny of its claims and these notices were an attempt to do just that. That amounted to an abuse of process.
  81. Breach of the rules or statute

  82. Mr Tritton and Mr Davey relied on two points which they submitted were breaches of the rules or a statute and in relation to which the notice of discontinuance was seeking to avoid the consequences and obtain a collateral advantage: CPR Part 19 r 19.3 and s102 of the 1988 Act.
  83. Breach of CPR Pt 19 r 19.3

  84. CPR Part 19 rule 19.3 provides:-
  85. 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.
  86. Rule 19.3 is clear and mandatory. In the present cases the copyright owners must be parties. They could come into the case as co-claimants or as defendants but they must come in. Mr Ludbrook accepted as I understood it that if the cases were to go forward then that would have to happen but he submitted that at the present Part 38 r38.2 permits the claimant - that is the only existing claimant - to discontinue without permission and then there would be no need to join the copyright owners. He submitted that r38.2 was clear in its own terms. Rule 38.2 provides:
  87. 38.2 Right to discontinue claim
    (1) A claimant may discontinue all or part of a claim at any time.
    (2) However-
    […]
    (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.
  88. He submitted that this should not be interpreted in such as way as to read in a requirement for permission where there was none. Mr Ludbrook cited Sayers v SmithKline Beecham Plc [2004] EWHC 1899 (QB) a case about the multi party proceedings concerned with the MMR vaccines. Those proceedings had multiple claimants who were individuals. A group litigation order had been made. Some of the claim forms named a single claimant and some named multiple claimants even though probably that had only been done to avoid separate fees having to be paid at least in some cases. There was a point about claimants under a disability but leaving that aside the argument was whether the courts permission was required for the notices unless all the claimants in the whole group action consented in writing. The passage relied on by Mr Ludbrook is the sentence I have italicised in the extract from the judgment of Keith J at paragraph 28:
  89. 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.
  90. The situation before Keith J was very different from the situation here. He was not dealing with a situation in which there were missing mandatory claimants and a potential conflict between r19.3 and r38.2. However Mr Ludbrook's real point was that in this passage and elsewhere (paragraph 27 of the judgment) Keith J was making clear that a requirement for permission which was not expressed in Part 38 should not be introduced by reading in words which were not there.
  91. In my judgment Mr Ludbrook is right that a requirement for permission cannot be read into rule 38.2 when it is not there, despite the apparent conflict with rule 19.3. Given what was said in the House of Lords in Castanho albeit about the old Rules of the Supreme Court, and what Keith J held in Sayers v SKB about Part 38 of the CPR, a need for permission should not be read into the rules just because a circumstance has arisen which may (or may not) have been unforeseen when the rule was drafted. Accordingly Media CAT do not need permission under Part 38 to discontinue. Whether permission is needed under s102 is another matter which I will address below.
  92. However Mr Ludbrook's submission about Part 38, which I have accepted, is concerned with the terms of the rules rather than with the issue of abuse of process. Under the mandatory terms of r19.3, the copyright owners must be joined in the proceedings. Without them the case is not properly constituted. Clearly the CPR allows applications to join such parties to be made in the course of the proceedings but to discontinue in this way at this stage avoids the issue altogether. I will return to the consequences of that after addressing the other alleged breach.
  93. Breach of s102 of the 1988 Act

  94. S102 of the 1988 Act provides (so far as relevant):
  95. 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.
  96. Mr Ludbrook accepted the section applies. He accepted that if Media CAT are to proceed with the action, the copyright owner must be joined or Media CAT must obtain the court's permission. Mr Ludbrook submits however that serving a notice of discontinuance is the antithesis of proceeding with the action and no permission under s102 is needed to do that without joining the copyright owner. I do not agree. In my judgment "proceed with the action" in s102 refers to proceeding with a step in the case. Mr Ludbrook submitted that the statute was not concerned with matters of case management and the like and while that may be right as far as it goes, a notice of discontinuance is not mere case management.
  97. The purpose of s102 is obviously related to the purpose of CPR r19.3. Parties with related rights must be part of the action so that the outcome of the case is binding on all of them. This prevents another case starting up a second time in which the same issues are argued out. It is not simply that the court's resources should not be used up a second time, the point is about finality in litigation. The winner knows that they have indeed won and the case is the end of the matter.
  98. S102 also has a further purpose which relates specifically to copyright (there are similar provisions in other intellectual property statutes - see s67(3) of the Patents Act 1977). Copyright is a property right (s1(1) of the 1988 Act) and the owner of the property is the copyright owner, no-one else. An exclusive licensee has a statutory right to bring proceedings for infringement but they have no property right. It is not their copyright. Apart from anything else it may be that the copyright owner has given permission to the defendant to do what he has done which is alleged to be an infringement. If the defendant had the copyright owner's permission then the defendant has not committed an infringement even if the copyright owner was not supposed to have given permission. The exclusive licensee's remedy in that case might be to sue the copyright owner for breach of contract for giving permission when he should not have done so, but it does not turn the defendant into an infringer. This sort of consideration is not a purely theoretical point. In the present case the allegation is about infringement on the internet. Where did the copy of the file alleged to have been transferred in the P2P network come from? Perhaps the copyright owner made it available on the internet in the first place? No doubt Media CAT would contend that they did not but Media CAT is not the copyright owner on any view. This provides an illustration of the reasons why the Act provides that the action for infringement may not proceed without the copyright owner unless the court gives permission.
  99. In the current (17th) edition of Copinger on Copyright the authors state:-
  100. "… 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."
    [paragraph 15-17]
  101. In my judgment the authors of Copinger are correct. One of the purposes of the section is to protect defendants from being vexed twice in relation to the same incident. Thus in some of the cases here it will require Sheptonhurst to be joined, and other companies like Darker Enterprises must presumably be joined in other cases. In some of the cases the exercise will call for more investigation since apparently Media CAT's agreements are not always with the copyright owner at all but just an exclusive licensee. That reinforces the point under s102.
  102. The statute provides an express exception in s102(3) to the terms of s102 (1) but it is specific and limited. The exception is that interlocutory relief can be granted without joining the copyright owner. In my judgment the limited nature of the exception built into s102 shows that the section is widely drafted. No doubt as a matter of case management the court could in a proper case give temporary permission to proceed to a certain stage without joining the copyright owner but that is a different matter. The property owner ought to be before the court at the earliest stage unless there is a good reason why not.
  103. Mr Tritton went as far as to submit that serving a claim form without the copyright owner as a party would need the court's permission under s102. I do not think that is right since the Act seems to me to contemplate that the action can be begun without the copyright owner but just not proceeded with without them. In my judgment the court's permission is required for a licensee to take a step in the case and in my judgment a notice of discontinuance is such a step. I note that in Castanho (above) Lord Scarman referred to termination of process as being "like any other step in the process" i.e. something which could be an abuse of that process. The permission required is not under Part 38, it is permission under s102 of the 1988 Act. By taking the step of terminating these claims without permission, Media CAT are in breach of s102.
  104. Collateral advantage I: re-litigating by the copyright owner

  105. Mr Ludbrook accepted that the notices of discontinuance would mean that the copyright owner could avoid the requirement for permission under r 38.7 for those defendants who had served a defence but he argued that was an irrelevant collateral advantage because it was an advantage to the copyright owner and not an advantage to Media CAT. He pointed out that in Castanho their Lordships referred to a collateral advantage obtained by the party serving the notice which it would be unjust for him to retain. So, said Mr Ludbrook, that means that unless Media CAT obtain a collateral advantage there is no abuse. Any unwarranted advantage to the copyright owner is irrelevant.
  106. In my judgment Mr Ludbrook's submission is wrong. First it seems to me that the concept of abuse of process is not as narrow as Mr Ludbrook submits. If someone is obtaining a collateral advantage from some act which may be an abuse of the court's process then that seems to me to be material. It is another factor to consider. Clearly the nature and identity of the person gaining the advantage is part of the equation and their relationship to the matters in issue will be very important. But I do not accept such an advantage is irrelevant. Second Mr Tritton submitted that the copyright owners in this case are by no means strangers to this litigation. They are parties to the agreement which purports to give Media CAT its right to sue in the first place. The agreement is not a general exclusive licence concerning normal commercial exploitation of the work, the agreement expressly contemplates and refers to civil proceedings which may be brought. Those civil proceedings are these proceedings. Moreover the copyright owner in these cases actually receives a share of the revenue generated as a result of the terms of the agreement.
  107. Related to the matter of collateral advantage, Mr Ludbrook submitted that it was pointless to require the copyright owner to be joined here since they might simply be joined as a defendant. It will be recalled that both s102 and rule 19.3 provide that the party to be joined may be joined as a co-claimant or, if they do not wish to take part in the proceedings any more than is necessary and avoid the potential liability for costs, they can be joined as a defendant. However it seems to me that there is a potential problem with the copyright owner seeking to join these proceedings solely as a defendant and claiming no relief. Section 102 and r19.3 would be satisfied and no doubt no permission to discontinue under r38.2 would be then needed because there would not be multiple claimants. However the real point of these actions is to claim damages for past alleged infringements. The damage was not damage to Media CAT, it was damage to the companies like Sheptonhurst etc. The damage is allegedly a lost sale or more of the films in question. But if the copyright owner refuses to stand as a claimant in the proceedings - where does that leave the claim for damages as compensation for the copyright owner's own loss? Moreover since the Sheptonhurst agreement gives a share of the revenue to the copyright owner it would be absurd if they could stand as a defendant, avoid cost liability and still collect a share of the damages anyway. According to the Sheptonhurst agreement the share to Sheptonhurst is either 20% or thirty percent (the words and figures do not agree).
  108. The notices of discontinuance in this case would give the copyright owners a collateral advantage stemming from a breach of the statute (s102 of the 1988 Act) and stemming from the avoidance of a mandatory rule (CPR r19.3). They avoid being a party at the point the case is discontinued and therefore avoid being subject to r38.7. That way the copyright owner avoids the need for the court's permission to reissue the claims in those cases where a defence has been served. It is an advantage which is unwarranted in the circumstances.
  109. This conclusion only applies to the cases in which a defence has been served. That is the reason why Mr Tritton referred to Henderson v Henderson, in order to make an analogous point for other cases. I am not sure Mr Tritton's submission is right but in the circumstances I do not need to decide that further question and I will not do so.
  110. Collateral advantage II: avoiding judicial scrutiny

  111. Mr Tritton and Mr Davey submitted that what was really going on here was that Media CAT were seeking to discontinue in order to avoid or minimise the degree of judicial scrutiny into these cases. Mr Ludbrook on behalf of Media CAT denied this and Mr Crossley said in his first witness statement (paragraph 6) that it had always been the intention from the outset to litigate in some cases.
  112. Obviously any discontinuance has the consequence of bringing proceedings to an end and thereby inevitably terminating any judicial scrutiny of the case. So it might be said that avoiding judicial scrutiny of a case cannot be a collateral advantage arising from a notice of discontinuance, it is what notices of discontinuance do. However in circumstances like these the matter is not that simple owing to the parallel letter writing campaign based on claims of the same nature. In my judgment the question is whether there is an unwarranted advantage to be gained from the intrinsic effect of the notices of discontinuance which bring judicial scrutiny of the cases to a close.
  113. The factors which, taken together, may support such an inference are as follows.
  114. First, the nature of the case itself raises many questions. I have mentioned some of them above. The issues are as follows:-
  115. 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.

  116. Second the standing of the claimant raises serious questions. There are two issues arising here:-
  117. 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?

  118. Third there is the simple point that a party faced with problems with their pleaded case but intent on taking a case to trial would simply take stock and apply to amend. This happens in the civil courts nearly every day. No good reason why that is not being done in this case has been given.
  119. Fourth the progress and conduct of the proceedings which have been started raises questions:
  120. 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.

  121. Fifth , the position of ACS:Law calls for scrutiny. I asked Mr Ludbrook about the fact that ACS:Law retained 65% of the revenue from the entire exercise. He then informed me on instructions that this did not apply to the court actions but only to revenue generated by the letter writing, although the agreement in court does not say that. Mr Tritton and Mr Davey asked for an order requiring copies of the retainer in order to make that good (since apart from anything else otherwise this might be one of the exceptional cases in which a non-party, ACS:Law, might be personally liable for the costs of the proceedings as someone with a personal interest in the outcome). I did not make that order but Mr Ludbrook indicated a copy of the retainer would provided in any event. It was provided shortly after the hearing.
  122. Set against that is Mr Crossley's statement that it had always been the intention from the outset to litigate on some cases. In his second witness statement Mr Crossley went into this point in more detail. He said that the suggestion that his client was discontinuing to avoid judicial scrutiny by this court could not be further from the truth. He explained that it had always been the claimant's intention to litigate and he said "in relation to me and my firm, it has always been explained to the client that issuing proceedings was an integral part of the instructions received to identify and pursue infringements of copyright through file sharing." Mr Crossley stated that but for the fact that he has ceased conducting this type of work for reasons unrelated to the litigation it was his intention to litigate forcefully the identified infringements. He stated that the cases were issued in a manner "which on reflection needed correcting" and the options open to his client were to continue, amend or discontinue. Upon consideration and on instruction it was decided that the neatest and cheapest way was to discontinue. He said it could have been corrected within the pleadings but on balance discontinuance was the preferable route. He continued by stating that neither himself nor his client fear any judicial scrutiny but they merely wished to halt cases where errors were made. However circumstances unrelated to the present cases have caused him and his firm to halt this type of work. Mr Crossley summarised them:
  123. 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.

  124. I have considered very carefully what Mr Crossley has said in both his witness statements. No-one should be subjected to death threats or bomb threats and inappropriate communication with children would be wholly outrageous and wrong. Without diminishing the significance of such things at all, as Mr Crossley himself puts it, they are circumstances unrelated to the present cases.
  125. The question in my judgment is whether the effect the notices of discontinuance undoubtedly have of bringing these cases to an end and thereby terminating any scrutiny by the court of the claims is an unwarranted advantage to Media CAT amounting to an abuse of the court's process. In my judgment it is the existence of a huge wider pool of parallel claims including but not limited to the 26 now before the court which is a decisive factor here. Problems with the 26 claims before the court of the kind discussed in this judgment are generic to all of them and to all the other claims Media CAT is making against the individuals identified by the Norwich Pharmacal orders in the first place.
  126. Media CAT and ACS:Law have a very real interest in avoiding public scrutiny of the cause of action because in parallel to the 26 court cases, a wholesale letter writing campaign is being conducted from which revenues are being generated. This letter writing exercise is founded on the threat of legal proceedings such as the claims before this court.
  127. The information annexed to Mr Batstone's letter refers to ACS:Law having "recovered" £1 Million. Whether that was right and even if so whether it was solely in relation to Media CAT or other file sharing cases I do not know. Simple arithmetic shows that the sums involved in the Media CAT exercise must be considerable. 10,000 letters for Media CAT claiming £495 each would still generate about £1 Million if 80% of the recipients refused to pay and only the 20% remainder did so. Note that ACS:Law's interest is specifically mentioned in the previous paragraph because of course they receive 65% of the revenues from the letter writing exercise. In fact Media CAT's financial interest is actually much less than that of ACS:Law. Whether it was intended to or not, I cannot imagine a system better designed to create disincentives to test the issues in court. Why take cases to court and test the assertions when one can just write more letters and collect payments from a proportion of the recipients?
  128. Beyond Mr Crossley's statement the only evidence I have seen of Media CAT making good an intention to press the claims in court is the 8 RJFs seeking default judgment in the October/November 2010. Mr Crossley's explanations never refer to a trial and never mention joining the copyright owners into the proceedings. His statements concerning his and his clients intent to litigate would all be true even if all Media CAT ever intended was to go as far as RFJs. I have seen no evidence of actions evidencing a desire to press these claims beyond applications for judgment in default. Furthermore even assuming Media CAT and ACS:Law knew at the start that they would have to litigate some claims sometime to some extent, it is not at all clear what Media CAT intends to do now. Mr Crossley says he was keen to continue the litigation and he stands by the initial letters of claim. In my judgment the letters of claim are flawed and not a solid place to stand. Mr Crossley is keen to continue the litigation but he is not doing so.
  129. The GCB episode is damning in my judgment. This shows that Media CAT is a party who, while coming to court to discontinue, is at the very same time trying to ram home claims formulated on exactly the same basis away from the gaze of the court. That will not do. I find that these notices of discontinuance are indeed an abuse of the court's process. The advantage of discontinuing as opposed to applying to amend is unwarranted in that it avoids judicial scrutiny of the underlying basis for wider campaign orchestrated by Media CAT and ACS:Law to generate revenue under the various agreements such as the Sheptonhurst agreement.
  130. Conclusion on notices of discontinuance

  131. My conclusions relative to the notices of discontinuance are:-
  132. 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 ?

  133. In some cases when a notice is found to be an abuse of process the court will then permit the notice but only on terms. One proposal canvassed before me was that I should either permit the notices to be given but only on an undertaking from Media CAT not to reinstitute any of the cases without permission, irrespective of whether a defence had been filed or not. The proposal favoured by Mr Tritton and Mr Davey was that I should simply set aside the notices and either direct that the copyright owners be joined into the proceedings, or stay the proceedings until that happens.
  134. It is plain that the notices of discontinuance should be set aside. However in the light of events which happened after the hearing on 24th January it is not so plain where to go from here. I will deal with the events after 24th Jan below. Had it not been for that I would have been minded to make an order which would have given Media CAT a short period in which to join the copyright owners or obtain permission under s102 to proceed without them, failing which the actions themselves would be struck out.
  135. An order restraining Media CAT from sending any further letters?

  136. Arising out of the evidence of the letters written for Media CAT by GCB, I raised with the parties whether this might be a proper case in which to make a novel order, requiring Media CAT to stop writing any further such letters (or having them sent on its behalf) at least until they had returned to court with a properly pleaded Particulars of Claim which could be considered. Such an order would be an extraordinary order to make but the circumstances appeared to me to be extraordinary circumstances. After all in my judgment the letter of claim itself misrepresents Media CAT's locus to bring a claim.
  137. Notable was the fact that Mr Crossley's second witness statement which emerged during the hearing stated in terms that he was no longer carrying out this work, GCB had stopped representing Media CAT and as a result Media CAT "has no ability to issue any further letters or issue any claims. There are no new letters pending or data on which new letters can be sent by or on behalf of the claimant. There are no applications pending or planned for a Norwich Pharmacal order." Thus it might be said that an order restraining Media CAT from continuing its letter writing campaign would do no harm to Media CAT least in the short term.
  138. An important element is this. The origin of the entire campaign is a series of 3 or 4 Norwich Pharmacal orders. The letter writing campaign is a well defined exercise from that perspective. The Norwich Pharmacal process is nothing more than a process of disclosure (or discovery is it was called in the case). Norwich Pharmacal itself was based on an old "action for discovery" concept. The court has always retained control over the use of documents and information obtained by the disclosure process. CPR Part 31 r31.22 specifically provides that a party obtaining a document via the disclosure process is not free to use it in any way they please. They may only use it for the purposes of the action in which it was disclosed unless it has been read or referred to in open court or the court gives permission or person who disclosed it (and its owner) give permission. Since the information on which the letter writing campaign is based was provided under a court order, it seems to me to be a much smaller step than it might otherwise appear to hold that the court can regulate the use of that information. An order restraining the use of the information disclosed under the Norwich Pharmacal process could be nothing more than an order varying the original Norwich Pharmacal orders. The county court has power to vary orders of the High Court in a proper case (see s38(1) of the County Court Act 1984 and see also the County Court Remedies Regulations 1991/1222 paragraphs 2 and 3). Whether such an order should be made by a county court or whether the proceedings should be transferred to the High Court in such circumstances is another matter.
  139. Civil Restraint Orders were mentioned by counsel in court and I note that the county court's jurisdiction to make such orders is limited relative to the High Court. The order contemplated is clearly much wider in effect than a Civil Restraint Order in that it related to correspondence and not applications to court or claim forms but it is much narrower in other ways in that such an order would be specific to the use of information itself obtained by means of a previous order of the court. It would not have anything to do with any desire or need on the part of Media CAT to litigate other matters.
  140. In some ways an order of the kind contemplated is no more than an injunction to restrain threats of particular copyright proceedings. There has never been a statutory jurisdiction to restrain threats of copyright proceedings but the courts have statutory jurisdiction to grant injunctions to restrain threats of proceedings in relation to a number of intellectual property rights including patents, trade marks and unregistered design right. An injunction to restrain threats of proceedings for IP infringement is not an order unknown to the law.
  141. However again in the light of events which happened after the hearing on 24th January (see below) there would be no point in making such an order in the present case even if it was otherwise justified. I do not need to embark on a detailed consideration of the Patents County Court's jurisdiction to make such an order or whether on the facts of the case such an order would be appropriate. I will not make an order restraining Media CAT from issuing any further letters in this campaign.
  142. Wider issues - this kind of Norwich Pharmacal order

  143. I cannot imagine that the court making the Norwich Pharmacal orders in this case did so with a view to setting in train an exercise that was to be conducted in the manner that has subsequently emerged. In my judgment when a Norwich Pharmacal order is sought of the kind made in this case, it may well be worth considering how to manage the subsequent use of the identities disclosed. Perhaps consideration should be given to making a Group Litigation Order under CPR Part 19 from the outset and providing a mechanism for identifying tests cases at an early stage before a letter writing campaign begins. When Anton Piller (search and seizure) orders are made the practice is for a supervising solicitor who does not act for the claimant to be closely involved in order to ensure that the orders are not abused. The supervising solicitors are experienced practitioners. Perhaps a court asked for a Norwich Pharmacal order of the kind made here should consider requiring some similar form of supervision from a experienced neutral solicitor.
  144. A party seeking a Norwich Pharmacal order in a case like this should also give serious consideration to s102 of the 1988 Act. Although s102(3) clearly provides that s102(1) does not affect the granting of interlocutory relief a Norwich Pharmacal order has some elements of final relief about it. After all the Norwich Pharmacal action comes to an end once the order is made. In any case just because the court has power to grant the relief without joining the copyright owner does not mean it must do so.
  145. Events after 24th January

  146. On 26th January I received a letter from ACS:Law. It included copies of documents relating to the firm's retainer with Media CAT on the basis that I had asked to see them. In fact I had not asked to see them, the defendants had and I had not ordered them to be produced, ACS:Law had volunteered. In any event the letter also states that Media CAT has ceased trading as it has become insolvent and that ACS:Law is no longer instructed save to perfect consent orders already notified to the court. The letter concludes with a statement that the claimant has asked Mr Crossley to notify the court that it has ceased all activities and will not at any time in the future be sending letters or pursuing anyone in relation to the alleged infringements of copyright. Also ACS:Law will close permanently on 31st January 2011 and there will be no successor practice.
  147. On 28th January the court received papers for applications by defendants represented by Ralli for wasted costs orders. I mention this only to state that those papers have not been read by me beyond the front cover.
  148. On 31st January I received a letter from Lawdit which corresponds to the letter from ACS:Law of 26th January mentioned above.
  149. Conclusion

  150. The notices will be set aside and the stays will be lifted. I will hear counsel as to whether in the circumstances as they now are there is anything would be served in requiring Media CAT to apply to join the copyright owners and I will hear counsel on any other further matters.


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