Norwich Pharmacal - 'speculative invoicing' and the rights of customers unknown

Norwich Pharmacal - 'speculative invoicing' and the rights of customers unknown

Norwich Pharmacal - speculative invoicing and the rights of customers unknown

“Speculative invoicing” is a term used to describe the practice of obtaining details of alleged file sharers, usually by means of a Norwich Pharmacal order served on the Internet Service Provider (ISP), and then writing letters threatening proceedings unless payment is made.   As described by Judge Arnold in the leading case of Golden Eye (International) v Telefonica[i], the “tactic is to scare people into paying”, and the practice has been much criticised, including by the Citizens Advice Bureau. A High Court decision handed down in July this year serves as a timely reminder to copyright owners making Norwich Pharmacal applications that it is essential to provide cogent evidence demonstrating a genuine intention to obtain redress for copyright infringement rather than to indulge in such a money-making scheme.

 

The case- Mircom & Golden Eye & others v Virgin Media[ii]

The applicants, mainly film production companies, applied for a Norwich Pharmacal order requiring Virgin Media to disclose the names and addresses of tens of thousands of residential broadband subscribers who had been identified by the applicants’ systems as downloading and sharing the applicants’ adult films in breach of copyright. It seemed like exactly the kind of case where a Norwich Pharmacal order could be obtained. However, after consideration of the issues, the Court refused to grant the orders.

Evidence of infringement was unconvincing

The evidence submitted seems to have been very shoddy in that it referred to non-existent attachments, some dates were wrong and some of the evidence was nine years old.  It failed to establish a good arguable case that the relevant subscribers had actually infringed on the dates and times alleged.

The court was not convinced that there was a genuine intention to sue

A further key issue, as mentioned above, is that the court must be satisfied that the applicants genuinely intend to seek compensation for the alleged infringements. In the present case Virgin argued that there was no such genuine intention and that the applicants intended to “continue to ride the ‘gravy train’ of letter-writing in the absence of court supervision”.  The court held that it could not decide on this question without evidence about what the applicants had actually done with the information received following the previous Golden Eye case described above, which involved some of the same parties. For example, in the previous case Arnold J had modified the letter to be sent to the alleged infringers to remove the implication that the recipient had already been found liable and to remove a blanket demand for £700 in settlement, had this letter in fact been used? Had any infringers actually been sued? How many letters had actually been sent? The evidence submitted was unclear on all these points with some suggestions that little had in fact been done.

Implications

In addition to the obvious point that it is important to avoid shoddy paperwork, this case again throws the spotlight on abuse of “speculative invoicing” and highlights that the courts will be alive to potential abuses that can arise in Norwich Pharmacal cases. While it acknowledges that such orders are an essential tool for claimants, it will also wish to see evidence that the information will be used in an appropriate way.

[i] [2012] EWHC 723 and [2012] EWCA Civ 1740

[ii] Mircom International Content Management & others, Golden Eye International & Others v Virgin Media Limited, Persons Unknown [2019] EWHC 14.07.19

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