Tel Aviv Court Refuses to Endorse Out-of-Court Settlement Between Service Providers and ISPs requiring that the ISPs Block Site Offering Software for Facilitating Downloading of Copyright Protected Material

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ZIR”A Organization for Internet Copyright LTD, United King Film Distribution 1990 LTD, DVS Satellite Services 1998 LTD, Hot Telecommunications, Keshet Transmissions, The Noga Net LTD and Noga Telecommunications LTD sued Anonymous, Bezeq International LTD, Partner Telecommunications, 012 Smile Telecommunications LTD, 013 Netvision LTD, Hot Net Internet Services and Internet Rimon LTD.
Broadly speaking, the case is one of content providers suing Internet Service Providers, and the not identified owner of a website allowing downloading of a piece of software that enables accessing and downloading content.

The content providers sued for a temporary injunction against the service providers and for details of the surfers.

Popcorn is software that allows both streaming content for online viewing and downloading content for future viewing. The plaintiffs sought to stop this service and to require ISPs to prevent access to the website allowing downloading of the software. A temporary injunction issued on 19 May 2015. On 3 June 2015 a hearing was held and on 11 June 2015, the plaintiff announced that it had reached an agreement with 013 Netvision LTD, Hot Net Internet Services an Internet Rimon LTD.

Judge Magen Altuvia of the Tel Aviv District Court ruled that there was no place to issue a temporary injunction to block access to Internet sites that allow downloading of software programs that allows viewing of creative works for which copyright protection is alleged. Such an injunction is ineffective and damages the free flow of information, the right of the public to know, freedom of expression and provides power to Internet Service Providers to determine what may or may not flow through the Internet Conduit. Other issues are the fight of anonymity and of privacy on the internet.

In consequence of the above position, the temporary injunction requested by a website and by an Internet Service Provider to prevent the use of the Program Popcorn was denied. It appears that many Internet service providers had come to an understanding with the plaintiffs, but one held out. The one that held out was vindicated. Furthermore, the agreement reached by the plaintiffs with the other ISPs would not be ratified by the court and the temporary injunction was cancelled.

The Court ruled that by law, the court is not able to order a temporary injunction against a third party to reveal the identity of an anonymous surfer that allegedly has committed an offence. It appears that the plaintiffs themselves were tardy in requesting the injunction and this indicates that the temporary injunction is hardly significant to the plaintiffs and there is thus no justification in issuing it.

The balance of interests does not favor the plaintiffs where there is no clear legislation that allows action against Internet Service Providers. Closing down the website will not prevent the downloading and installing of Popcorn and will have no action against those Internet surfers who have already downloaded the program, and there are opposing values of free flow of information, right of the public to know, freedom of expression.

Plaintiff’s Position
On 29 June 2015, the plaintiff requested that an agreement made with Partner Telecommunications, 012 Smile Telecommunications LTD, 013 Netvision LTD, Hot Net Internet Services and Internet Rimon LTD be ratified by the court. Bezeq International held out and the plaintiffs requested a temporary injunction again them.

According to the plaintiffs, United King Film Distribution 1990 LTD, DVS Satellite Services 1998 LTD, Hot Telecommunications, Keshet Transmissions, The Noga Net LTD and Noga Telecommunications LTD held copyright in various programs and none of them had authorized Anonymous or Bezeq International to use the protected content via the Popcorn website or program.

Anonymous is not known to the plaintiffs [the ruling uses both verbs to know, i.e. conaitre and savoir, knowing in the Biblical sense does not seem to be intended]. The name Anonymous relates to the owner of the Popcorn website that allows surfers to choose to watch programs without the plaintiff’s permission, thereby infringing copyright under the Copyright Act 2007, and being guilty of unjust enrichment under the Law of Unjust Enrichment 1979.
The ISR is the bottleneck that has the cheapest and simplest way to stop access to Popcorn’s website from Israel based Internet browsers.

On 14 May 2015, and again on 17 May 2015, the plaintiffs contacted all the internet service providers but these were ignored.

On 28 April 2016, the Chancery Division of England ruled on Popcorn’s website and in that ruling, determined that the Popcorn sites infringed copyright and Internet Service Providers should block access. Twentieth Century Fox Film Corporation and Others vs. Sky UK and others. Case No: HC2014-00229, EWHC 1082 (ch). According to the plaintiffs, Judge Gidon Ginat (also of the Tel Aviv District Court) adopted the UK decision in his ruling of 12 May 2015, T.A. 11-333227-13 NMC United Entertainment LTD. Et. Al. vs. Bloomberg et al. In that instance, the Court found that by allowing conversion from view only format to saveable MP3 format, Mr Parpori had aided and abetted copyright infringement and that Internet service Providers should block access to the site. See here for my analysis of that case.

According to the plaintiffs, both the Fox decision and the Papori decision support their position that access to the Popcorn site should be blocked. Due to the ‘unacceptable ease of infringement and the fatal wounding of their rights’ there is a need to grant the requested injunctions as soon as possible to preventthe daily infringements.

Bezeq International’s Position
Bezeq International claims that the plaintiff’s filed suit following the ruling in the UK against Popcorn, despite the software being available from much earlier. Suit was filed only in May, so this case cannot be considered urgent.
Bezeq International claims that the plaintiffs do not have a single damages claim against them and therefore there is no room to grant an injunction against them. There are a number of Supreme Court precedents that prohibit issuing injunctions against third parties.

Bezeq considers that such a third party injunction would do them damage whilst would not have an effect on Popcorn since they would simply open up further sites allowing content to be downloaded.
In the appeal considering obligations of ISPs 4447/07 Rami Mor vs. Barak ITC (1994) Bezeq international, Judge Rivlin of the Supreme Court related to whether the Court had the authority to force a third-party to reveal the identity of an anonymous surfer who committed an offence.

There judge Rivlin ruled:

“My position Is that the Courts should not issues such injunctions without a proper hearing. Until there is specific legislation that that allows the requested injunction in cases of slander, there is no alternative but to inquire into whether there is a general framework that allows such third party injunctions. In other words, anonymous Internet surfing should be treated like anything else, and there has to be either specific legislation or general legislation and there is no justification to invent such a framework by judicial legislation.
In the current instance, there are three parties. There is the plaintiff who claims to have been slandered. There is the anonymous slanderer and there is the third party who may know the identity of the anonymous slanderer. This scenario of three parties is not unique to Internet slander. In other contexts, a party may consider himself damaged by an anonymous damager and may suspect that a third party may know the identity of the culprit. The question in front of us is thus wider than anonymous internet surfing. The question is whether Israel civil law allows forcing a party to identify a damager so that suit may be filed against him.

One possible source for contemplating forcing the revelation of the identity of the third party is Section 75 of the Law Courts Law 1984. Section 75 grants wide posers to the courts one the infringement is proven. It does not provide rights outside of a civil proceedings. The law does not contemplate court rulings in the air, but court rulings against parties being prosecuted.
Where A damages B, B may obtain an injunction against A. However, where A damages B, B cannot obtain an injunction against C who is not connected to A or to B. This would require special authorization. In other words, one cannot pull oneself up by one’s bootlaces and cannot create a civil matter against a third party by legislation designed to provide recourse against actual infringers.
This logic is good for Sections 71-75 of the Civil Tortes Ordinance, also considered as a possible basis for action. These Sections deal with the courts authority to provide retribution for civil damages and to give injunctions to act or to refrain from acting, but are not relevant in this instance. The injunction requested against the Internet Service Provider is not with respect to actions by the Internet provider. There are no charges for damages case against the ISP and no grounds for requesting compensation in these clauses so there is no grounds for revealing his identity.

Judge Rivlin went on to refer to another UK case, Norwich Pharmacal, where the court ruled on the revealing of an anonymous infringer in a separate proceeding:

…it should be emphasized that this principle does not have an anchor in Israel law and does not dovetail with any judicial framework recognized in Israel. The opposite is true. It contravenes the spirit and purpose of the judicial framework established by the primary and secondary legislators for Civil Court procedures. Such a change should come from the primary or secondary legislators. [i.e. the Knesset or the Ministry of Justice].

Judge Rivlin’s position was opposed by Judge Elyakim Rubinstein but was endorsed by Judge A.A. Levy.

Judge Magen Altuvia considers that the principles laid out by Judge Rivlin in the Mohr case are appropriate in this instance where the temporary injunction is identical to the main injunction and the rights of the plaintiff and defendants have not been clarified, and where there is no case against the defendant alleging infringement of the rights of any of the plaintiffs. Furthermore in the Appeal 1622/09 Google Israel vs. Brokertov et al. Judge Rivlin reiterated the position in Mohr and stated that “these differences don’t solve the issue of court authority to sanction a third party who is not guilty of any direct claims.

The Plaintiffs rests their case on the Parpori issue. From the way things developed it appears that the plaintiffs only decided to file suit after the Papori ruling on 12 May 2016. Thus only on 14 May 2015, a couple of days after Judge Ginat’s ruling, the plaintiff wrote to the ISPs (defendants 2-7) and requested that access to the Popcorn site be blocked. The law suit was only filed a week later, on 19 May 2015.

It will be appreciated that Tel Aviv District Court rulings are not binding precedents to the Tel Aviv District Court and the Court can ignore the Parpori ruling, whereas the Mohr case is binding precedent. Furthermore, without expanding, Judge Altuvia considers the Parpori scenario rather different. In this instance, there is a difficulty for the plaintiff to identify Anonymous and to prevent alternative websites being set up, so it is not clear that ordering the ISPs to block the site is efficient. Neither Parpori or the UK ruling are binding on the Tel Aviv Court. Indeed, in Mohr, the Supreme Court reviewed UK and US caselaw that allowed action against third parties such as ISPs and didn’t adopt the approach.
In Parpori, the main culprit had the opportunity to defend himself. This is not the case here as the main culprit isn’t identified.

Temporary injunctions are an exception to general procedure and are only appropriate where there is an urgency, which clearly wasn’t the case here, as the plaintiff was tardy in pressing charges.
The program Popcorn does not itself infringe. It merely aids and abets the downloading and viewing of copyright material. Blocking the site does damage to the ISP’s image and other ISPs can choose not to block access.
Clause 9 of the Statement requires the ISP to block future sites. This requires them to be a policeman and a censor for the plaintiffs. This policeman is not to generally police the net but to take action against a specific entity who has not had the opportunity to defend himself in court.

The reluctance of the court to convert ISPs into policemen outweighs the copyright of the plaintiffs.

In view of the above analysis, it would be wrong to endorse the out-of-court agreement as it is not a simple contractual obligation but has in rem aspects. The desired censorship would have consequences for the public and the Legal Counsel to the Government (Perhaps better translated as the Attorney General, has not addressed the issue, despite being invited to do so.

Conclusion
The temporary injunction granted by the court is voided and the plaintiffs are obliged to compensate Bezeq ben Leumi 40,000 Shekels for costs and legal fees.
Civil Action 37039-05-15 ZIR”A et al. vs. Anonymous, Bezeq Ben Leumi et al. Ruling by Magen Altuvia of Tel Aviv District Court, 1 July 2015.

COMMENTS
With all due respect to Judge Gilad Ginat who I consider to be the most competent IP judge in the District Courts and probably in any of Israel’s Courts now that Judge Gronis has retired, I think that Judge Altuvia is correct. In my comments on Civil Ruling 33227-11-13 NMC United Entertainment LTD et al. vs. Bloomberg et al. Tel Aviv District Court by Judge Ginat, 12 May 2015 I criticized the decision as ultra-vires judicial activism. I don’t accept that there is a lacuna that the legislators forgot about, but rather the current state of the Law reflects conscious government policy, not least due to the fact that when the new copyright act being passed, Israel was regularly being criticized in the US 301 Special Report also here for not having ISPs required to police the net.

I think that Judge Altuvia is correct that this is an instance where the Attorney General should present the government’s position. I think that the Attorney General is supposed to attend to such matters. It seems that Attorney Yehuda Weinstein views things differently and believes that his job is to dictate government policy and to keep the government in line with the positions of the Supreme Court.
For example, at present there is a contentious issue to be debated by the Knesset – the Death Penalty for terrorists. I have no problem with the Knesset debating this issue from time to time. I have no problem with lawyers in private practice, clerics, academics and journalists, human rights activists, victim support groups and the lay public expressing strong opinions, whether for and against. However, I find it totally unacceptable that the Israeli press reports that the Minister of Justice is considering supporting the legislation despite the opposing views of the Attorney General. Sure the Attorney General is entitled to have opinions and to express them to the government ministers. He should do so in a discrete manner and the public and press have no business knowing his personal opinions. The government is selected by the ruling coalition that represents a majority of the members of Knesset who are elected democratically. The Attorney General is an appointee. The current proposed legislation is a private member’s bill with some support from government back-benchers. But Weinstein also speaks out on government policy. This case and many others are not legal issues, but moral, ethical, strategic and tactical ones. If Weinstein is unhappy with supporting a government policy, he should either be professional and do his job to the best of his ability, as Barak apparently did as Attorney General, or he should resign. There are a number of cases where the Attorney General seems to have dictated policy or ignored the government. This is, in my opinion, grounds for dismissing him.

I am very critical of judicial activism, which seems to be justified to protect democracy from the people’s representatives. Thankfully Justice Aharon Barak’s term as president of the Supreme Court has ended and some of the damage to fidelity of the Law and to the democratic process has been reversed. I am pleased that Judge Magen Altuvia and Judge Rivlin have seen fit to take a formalistic stance in this instance.

As to judicial legislation for enhancing enforcement of IP infringement, the Supreme Court has accepted contributory infringement and aiding and abetting infringement in schori vs. Regba (Apppeal to Israel Supreme Court 7614/96) and in the Rav Bareach (Appeal to Israel Supreme Court 1636/98) Crook Lock case.  In the US, the CFAC and the Supreme Court have moved away from these judicially created indirect torts. Arguably both cases are legitimate workarounds. We’ve seen the courts moving away from A.Sh.I.R. which provided legal grounds for sanctions for unregistered designs under the amorphous value of Unjust Enrichment. In absence of amendments to the Patent Law, perhaps it is about time that Srori vs. Regba and Rav Bareakh were reversed?

In the last election I did look for a party with a strong IP position. Unfortunately, it was difficult to find a party with a clear stated position on anything, and none seemed to mention intellectual property in their manifestos, bumper stickers TV commercials. The Knesset is, nevertheless, updating its IP laws. I think we should lobby them to do more rather than give the courts legislative powers. Whilst there are ministers without portfolios, maybe there is room to have an IP Minister or Czar, or a Deputy Minister in the Ministry of Justice or that of Trade and Industry with specific IP responsibilities. Other countries, including the US and the UK have such a position.

One final point, Internet Rimon advertises itself as a religious ISP that blocks pornography, gambling and other websites deemed immoral, objectable under Jewish law and values and damaging. I believe such a pious company should take copyright infringement seriously and block sites such as Popcorn as well, or at least provide the option to parents to elect to block copyright infringing sites.

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