UK Judge: Giving Hollywood Money From Newzbin2 Would Create Chilling Effects On Innovation

from the oops dept

Hollywood already succeeded in getting UK courts to force ISPs to block access to Newzbin2, a Usenet service that the industry insists could only have been used for infringement. And that led Newzbin2 to eventually shut down. But, the Hollywood studios want more. They've been trying to get money from the operator of Newzbin2, demanding any and all proceeds. But, surprisingly, that effort failed yesterday as the judge noted they had no rights to such profits and, importantly that just handing over the proceeds from a business like that might create chilling effects and stifle innovation:

On [Hollywood's] case, a copyright owner's claim would not even be limited to the infringer's profits: in principle, the entire proceeds of sale would be held on trust for the copyright owner. That might both be unfair and stultify enterprise. The proceeds of an infringement might be out of all proportion to the profits generated (e.g. because of the cost of raw materials used in the infringing product). It might not seem just for even a deliberate wrongdoer to have to pay the copyright owner the amount of his gross receipts, and an infringer need not have known that he was breaching copyright. Further, were Mr Spearman's [lawyer for the studios] submissions correct, a person might be deterred from pursuing an activity if he perceived there to be even a small risk that the activity would involve a breach of copyright or other intellectual property rights. As was submitted by Miss Lambert, that could have a chilling effect on innovation and creativity.

Basically, the judge is recognizing that the entertainment industry is completely overvaluing the content, and arguing that any and all money made is 100% due to the content, and not due to any other factors. And that's ridiculous. The judge used some analogies:

Suppose, say, that a market trader sells infringing DVDs, among other goods, from a stall he has set up on someone else's land without consent. The owner of the land could not, as I see it, make any proprietary claim to the proceeds of the trading or even the profit from it. There is no evident reason why the owner of the copyright in the DVDs should be in a better position in this respect.

The Motion Picture Association responded to this loss by saying that this is just "one particular point" in the case, and that it is planning to appeal. And, either way, they point out, what really matters is that Hollywood shut down Newzbin2. Yes, Hollywood killed another service that had figured out how to distribute content better than Hollywood. And, in the end, isn't that all that really matters? So long as Hollywood can keep killing services who do things better than Hollywood, the rest is just gravy.

Filed Under: copyright, earnings, money, profits, uk
Companies: mpaa, newzbin2