Golden Eye: "If you are reading this, then more than likely you have infringed our rights already"

The Kats engage in purr-to-purr file-sharing

A little more than a year ago, the IPKat reported on Golden Eye (International) Ltd and others v Telefonica UK Ltd, Consumer Focus intervening [2012] EWHC 723 (Ch). In short, Golden Eye and its fellow claimants were the owners of the copyright in a number of pornographic films which, they suspected, had been the subject of unauthorised peer-to-peer file-sharing by some 9,124 users of Telefonika's 02 internet services which infringed the copyright in those films. In order to enforce its copyright and the rights of its licensors, Golden Eye sought disclosure from various internet service providers of details of their subscribers under a Norwich Pharmacal order so that they could then write to the persons whom it suspected of this activity -- once it knew who they were -- and to threaten to sue them if they didn't pay up the handsome sum of £700 by way of compensation. The letter that Golden Eye intended to send to computer users spelled out that they were responsible for any copyright infringement that took place via their internet connection even if it was committed by someone else. Golden Eye stood to collect between 25% and 37.5% of the money it collected for the other claimants.

At the time, Arnold J was unimpressed with the draft letter which Golden Eye proposed to send.  It failed to state clearly that the merits of the infringement allegations had not yet been considered by the court; it said the recipient was liable for the infringement without clearly stating that that person might not be responsible for the infringing acts (the infringement might have been perpetrated by a visitor or a hacker, or the internet subscriber might be a publicly accessible site); it listed the dire consequences if it sued for copyright infringement and won, but didn't mention the claimant's fate if it lost; it made the unsupported suggestion that there might be other intellectual property infringements; it required a response within 14 days, which was unreasonable; its threat to slow down or terminate the recipient's internet connection was unjustified.

While Golden Eye proposed to give an undertaking not to disclose recipients' names to the public without their consent until they became defendants to proceedings, this could still cause unnecessary distress since it could be read as an implicit threat of publicity once proceedings were commenced. Further, the £700 demand was quite unsupportable for many reasons: (i) an unknown percentage of its recipients would be non-infringers and (ii) the scale of any infringement was unknown. That sum was chosen to maximise the revenue obtained from the letters and was not a realistic estimate of recoverable damages. The proper course was to require internet users who admit infringing to disclose information about the extent to which they did so, then negotiate a settlement on a case-by-case basis.

Time has passed, and this Kat is receiving word that Golden Eye is sending out letters demanding payment of £350 or £700, depending on the number of allegedly infringed titles they decide to put in their 'report'. He is also hearing rumours that Golden Eye's demands somewhat closely resemble those which received judicial criticism from Judge Birss QC (as he then was) in Media CAT v Adams.  He has also been given to believe that recipients of these letters of demand -- which are in effect speculative invoices --  from Golden Eye are indeed distressed and are quite uncertain as to what they should do about them. Some have been told to consult their local trading standards offices though it is by no means certain that trading standards offices would be able to do much more than offer sympathy.

Discussion with a couple of this Kat's learned friends at the Bar has not led him very much further in his investigations.  There is a sentiment that Norwich Pharmacal orders just weren't designed to deal with this kind of process. More significantly, the Kat's friends report that, so far as they are aware, Golden Eye hasn't actually commenced legal proceedings against anyone, despite insisting that this is precisely what they are going to do.

The IPKat would like to get to the heart of the matter and find out what's really going on. Is Golden Eye merely sailing close to the wind or has it crossed the bounds of legal propriety? Are the sums demanded merely a fair estimate of the damage done to the an infringed copyright plus the cost of enforcement, or are they a demonstration of greed by an unabashed copyright troll? The message on Golden Eye's website takes the moral high-ground:

"Golden Eye International, the holder of numerous film copyrights, has long taken the stance that the unlawful distribution of copyright material is detrimental to the film and creative industries. The continued use of peer-to-peer file sharing networks has grown to such proportions that we are left with no other alternative but to pursue those who infringe our copyrights and to seek financial retribution, for our losses, through their unlawful activities. While every attempt will be made to seek a settlement out of court we will not hesitate to enter into court proceeding with those who fail to acknowledge our intellectual rights. We use the latest technology to identify those IP addresses from which our films and content are being uploaded to peer-to-peer networks and through rigorous and legal means contact the offenders notifying them of our intent to get them to cease any similar activities in the future as well as negotiate an equitable settlement for the losses caused by their unlawful practises.

If you are reading this, then more than likely you have infringed our rights already. If you wish to settle our claim against you prior to court proceeding taking place please click here. We advise recipients of our letters to seek independent legal advice".

But is this where the company belongs?  Readers, do please tell us.