Pirate chip supplier gets its just desserts - Court of Appeal upholds copyright conviction but serves up a note of warning on the use of criminal prosecutions in complex copyright cases

Summary

The Court of Appeal has dismissed a pirate chip supplier's appeal against his conviction and has confirmed that the modchips he dealt in did enable the circumvention of technological measures designed to prevent copyright infringement. However, the Court of Appeal has warned that, rather than deal with such complex copyright cases via criminal prosecutions, the issues are better heard in the civil courts where findings of fact can be reliably made by specialist judges and similar penalties are available via the Proceeds of Crime Act 2002 and punishment for contempt of court for breach of any injunction (Gilham v R [EWCA] Crim 2293, 9 November 2009).

Business Impact

• Transient copying of small amounts of a copyright work is likely to be infringing – The Court of Appeal did not find it necessary to decide whether transient copying involved the copying of a substantial part of a copyright work and discussed the varying judicial opinion on this point. However, the Court held that it would have followed the approach of Jacob LJ in Higgs v R (2008) (copying "little and often" being sufficient for infringement) had it felt it needed to decide on this point.

• The Court of Appeal relied on the display of artistic works on screen as evidence of copying of a substantial part of a copyright work in the RAM via the modchip.

• In future such situations appear likely to be dealt with via civil actions rather than criminal prosecutions following the Court of Appeal's reassertion of Jacob LJ's comments in Higgs that complex copyright issues are should be tried in Chancery before specialist judges as they can be dealt with much more efficiently and cost effectively than before a jury.

Background

The defendant had been convicted in September 2008 of a number of offences arising from his commercial dealings in modification computer chips ("modchips") used to modify games consoles (in this case Sony Playstation2, Nintendo GameCube and Xbox consoles) and circumvent the technological protection measures such consoles carry, allowing "pirate" copies of games to be played on them (including an offence under section 296ZB CDPA by virtue of his commercial dealings in modchips which enabled or facilitated the circumvention of effective technological measures).

The Court of Appeal heard Gilham's appeal in October 2009 and dismissed the appeal.

Copyright infringement alleged (post Higgs) but queries over approach to substantial part

In Higgs, the prosecution had argued that the effect of applying and selling the modchips was to encourage a market in infringing products (pirated games)and thereby circumvented effective technological measures. The Court of Appeal had looked at the meaning of “effective technological measures” as defined in section 296ZF CDPA 1988. It held that there should be a restrictive construction placed on this section - technological measures must be those actually designed to prevent copyright infringement not a mere hindrance or discouragement. Higgs’ convictions were quashed, although Jacob LJ described him as “a fortunate man” suggesting there might still be a case in copyright against him since the prosecution had not pursued claims of copyright infringement i.e. that using a modified games console involved copying copyright material into the computer’s memory. Jacob LJ had stated (obiter) that making transient copies of copyright material into a random access memory (RAM) was a restricted act being an infringement of copyright under section 17 of the Copyright Designs and Patents Act 1988 (CDPA).

The prosecution in the present case had learnt the lessons of Higgs (2008) and had alleged infringement of copyright. Copyright is infringed where the whole or a substantial part of a copyright work is copied. This is usually applied as a qualitative rather than quantitative test.  During the playing of a game, data is taken from the DVD or CD-ROM on which the game is sold, into the RAM of the console. The amount of data from the disk that is copied onto the RAM varies but at any one time the Court of Appeal stated that "probably no more than 3 per cent and possibly significantly less of the data on the disk is present in RAM". In Gilham's appeal it was argued that although there may have been copying, such copying was not "the whole or a substantial part" of the games data on the DVD and therefore any copying did not infringe the rights of the copyright owner.

The Court of Appeal was of the opinion that "substantial" was a "difficult word" that may mean "not insubstantial" but could also mean "ample or considerable". The Court of Appeal concluded it was more complex than had been indicated in the judge's direction to the jury at trial. The Court reviewed the definitions of "substantial" discussed in the major copyright text books (Copinger and Laddie) and also judicial authorities such as Kitchin J's comments in the Football Association Premier League v QC Leisure (2008) where foreign decoders were being used to access foreign broadcasts in the UK. The Court commented that Kitchin J's decision in that case that the few frames of a film stored at any one time in the decoder did not constitute a substantial part of the film, was "on the face of it … inconsistent with the approach of Jacob LJ in Higgs" and also of Laddie J in Sony v Ball (2004) another case involving Sony games consoles and modchips where the latter held that transient copies in a RAM chip were infringing articles even if the copy is not retained.

Although Lord Justice Stanley Burnton admits in the final paragraphs of the judgment that if he had had to come to a conclusion on the point, the Court would have followed the "little and often" approach of Jacob LJ in Higgs, the Court of Appeal did not find it necessary to resolve the apparent contradiction of judicial approach it had identified. It was not whole games alone that were being copied "little and often" (about which these issues would have been material) but other copyright works such as the drawings which underly the pictures which are shown on the monitor screen and of which undoubtedly substantial copies were being made. Therefore it followed that even if the contents of the RAM of a game console at any one time was not a substantial copy of the whole game, the image displayed on screen was substantially copied – if the pause button is pressed there is displayed a still image that is a copy of the artistic work generated by the digital data in RAM. "The fact that the players do not normally pause the game is immaterial, since it is sufficient that a transient copy is made". The Court of Appeal found this conclusion "supported" by Kitchin J's judgment in the FA v QC Leisure case.

The Court of Appeal concluded that the appellant had been rightly convicted of the offences he had been charged with under the CDPA and expressed itself satisfied with this decision in that it accorded with the emphasis given to the importance of protecting copyright and related rights in multimedia products outlined in the recitals of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society and also that it "accord[ed] with common sense that a person who plays a counterfeit DVD on his games console and sees and hears the visions and sounds that are the subject of copyright does indeed make a copy of at least a substantial part of the game even though at any one time there is in the RAM and on the screen and audible only a very small part of that work."

Chancery not criminal proceedings more appropriate for complex copyright offences

The Court of Appeal sounded a note of warning on the bringing of criminal prosecutions in relation to this sort of complex copyright infringement. The Court felt that the matter might much better be dealt with using the civil courts, where findings of fact were likely to be more reliable and financial penalties could still be enforced via the Proceeds of Crime Act 2002 with the threat of criminal proceedings for contempt of court for breach of injunction available for added deterrence:

" Lastly, we repeat with emphasis what Jacob LJ said in Higgs about the trial of cases involving recondite issues of copyright law before a jury. Cases that, for example, involve determination of difficult questions whether a copy is of a substantial part of a copyright work, can and should be tried in the Chancery Division before specialist judges. They can be so tried much more efficiently in terms of cost and time than before a jury, and questions of law can if necessary be determined on appeal on the basis of clear findings of fact. In appropriate cases, the Court will grant injunctive relief, and a breach of an injunction will lead to punishment for contempt of court. If the facts proven against a defendant show that he has substantially profited from criminal conduct, proceedings for the civil recovery of the proceeds of his crimes may be brought under Part 5 of the Proceeds of Crime Act 2002".
 

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