Criminal prosecutions for copyright infringement – custody for copying?
Criminal prosecutions for copyright infringement – custody for copying?
The recent case of R v Wayne Evans  ECWA Crim 139 reinforces the ominous but often overlooked possibility that a copyright infringer may have committed a criminal act attracting a custodial sentence on conviction. The Court of Appeal’s guidance will provide judges with much-needed steerage when sentencing offenders convicted under the Copyright Designs and Patents Act 1998 (“CDPA“) and as a result, we are gradually getting a clearer picture of when CDPA convictions are likely to result in a custodial sentence. There are three key elements to consider when weighing up whether an infringing act has the potential for a custodial sentence:
- Was the infringement criminal in nature?
- Is a defence available?
- Does the severity of the offence (in particular by reference to the recent judicial commentary in Wayne Evans) justify a custodial term?
WAS THE INFRINGEMENT CRIMINAL?
Whether the infringement is criminal or just tortious (i.e. a civil wrong which would not in itself carry a threat of criminal prosecution) depends on the perpetrator’s actions. Broadly speaking, the CDPA identifies two types of tortious copyright infringement: primary infringement (contained in sections 16 to 21 of the CDPA) and secondary infringement (sections 22 to 26). Many of the primary and secondary acts of infringement may also constitute criminal offences. Often the upgrade from a civil act of infringement to one which is criminal requires the presence of an additional (aggravating) ingredient, for example knowledge that the act itself is infringing the rights of the aggrieved victim. As we will see, however, this is not always the case.
Primary infringement includes, for example, reproducing a photograph (s17) or playing a song in public without permission of the relevant rights holder (s19). Secondary infringement includes, for example, importing copyrighted works into the UK without the rights holder’s permission (s22) or providing means for creating infringing copies (s24).
Generally speaking, the primary infringer commits the infringing act themselves whereas the secondary infringer knowingly assists or profits from the primary infringer’s actions. The line between civil and criminal infringement is less clear-cut than as between primary and secondary infringement. This can be illustrated using the same examples of infringement as above:
- Making a reproduction of a copyright protected photograph for sale and in the knowledge or having reason to believe that doing so infringes copyright in the original photograph is a criminal offence (s107(d) CDPA).
- Playing a song in public in the course of business and in the knowledge or having reason to believe that doing so infringes copyright in that song is a criminal offence (s107(2A)). Even if the infringing party is not acting in the course of business, they are still criminally culpable if the infringement was to such an extent as to affect prejudicially the owner of the copyright provided they did so in the knowledge or having reason to believe that the act constituted an infringement of copyright (s107(2A)(b)).
- Importing copies of copyright works into the UK in the knowledge or having reason to believe that the act constituted an infringement of copyright is a criminal offence (s107(1)).
- Manufacturing for sale or hire, selling, offering for sale, possessing or distributing any device, product or component primarily designed, produced or adapted for the purposes of enabling or facilitating the circumvention of anti-copying technology is a criminal offence (s296ZB).
The broad theme of the criminal offences is to catch commercial infringers who know and/or understand (or in the eyes of the law should understand) that their behaviour constitutes infringement. That said, a number of the criminal offences are identical to their counterpart acts of civil secondary infringement. For example, knowingly importing copies into the UK under s22 is identical to the criminal offence contained in s107(1) of the CDPA.
There are also certain ‘freestanding’ criminal offences in the CDPA which are not extensions of the primary and secondary acts of infringement. Of notable example is s198 which criminalises behaviour relating to ‘illicit recordings’. Illicit records are recordings of the whole or a substantial part of a performance, otherwise than for private purposes, without the consent of the performer, i.e. bootleg recordings (s197 CDPA). Section 296ZB, which relates to producing and possessing devices designed for circumventing copy protection, is another example.
What if a company is the infringer?
Where a ‘body corporate’ (which includes companies incorporated in and outside of the UK) commits a copyright infringement offence, any director, manager, secretary or other officer (or a person purporting to act in any such capacity) who consented to or connived in the committing of the offence will be guilty of the offence in addition to the body corporate itself (s110(1) CDPA). The corporate veil will therefore not protect a company’s officers from criminal proceedings to the extent that those officers consented to the infringing act, whether expressly or tacitly. Officers who believe infringing actions may be taking place will be personally motivated to ensure infringing behaviour ceases, lest they be exposed to criminal consequences. It is not a defence to have watched from the side lines. Knowledge of the infringement and a failure to act on that knowledge to stop said infringement will be paramount considerations for establishing an officer’s liability.
Risk of criminality and enforcement
As we have seen, a business or individual acting in the course of business can quickly (and often unwittingly) find themselves exposed to criminal liability under the CDPA.
That said, committing a criminal act does not necessarily result in prosecution. The police (who pursue a prosecution through the Crown Prosecution Service (“CPS”)) and Trading Standards (acting on their own volition and/or information supplied by a third party) are the principal enforcers of CDPA criminal offences. Of course, in the absence of an active investigation, the police or Trading Standards may never become aware of an infringing act unless a third party (often the rights holder) reports them. Given the already-stretched resources of both bodies, prosecutions are typically reserved for high-value and systematic infringers where the considerable expense of bringing a case to trial is more easily justified. In practice, this criteria means it is often larger scale counterfeiting and piracy activities (as see in the Wayne Evans case) which result in an appearance before a magistrate or judge.
Whilst it is relatively unlikely that an isolated and relatively low-value offence under the CDPA will make its way to the criminal court due to the costs involved, incensed rights holders who have found little support in the police, CPS or Trading Standards may choose to bring a private prosecution against the infringer. In 2012 Anton Vickerman, owner of illicit streaming website sufthechannel.com (which attracted 400,000 users per day at its peak) was convicted on two counts of conspiracy to facilitate copyright infringement. The conviction was for a ‘related offence’ (discussed in the next section) but the circumstances of the case would have also have supported a CDPA prosecution. The copyright lobbyist group, the Federation Against Copyright Theft, brought the private prosecution against Vickerman. He was sentenced to 4 years in prison for the group’s efforts.
Commentators expect that the ever-increasing strain on police, CPS and Trading Standards budgets will only increase the number of private prosecutions brought for CDPA offences. Public funding available to build criminal infringement cases is expected to be increasingly reserved for the highest value cases, leaving victims of criminal copyright infringement to seek justice themselves in the majority of cases.
Additionally, marginal cases of infringement may fail to meet the public interest test for prosecution by the CPS. The burden of proof at a criminal trial is also much higher than in civil proceedings. The accused must be demonstrated to be guilty beyond reasonable doubt compared with on the balance of probabilities in a civil claim. Both these factors will have an impact on the number of CDPA prosecutions brought before the court.
As a general rule, a successful private prosecutor can recover their costs from the state’s central funds for criminal proceedings (s17 of the Prosecution of Offences Act 1985). An unsuccessful prosecutor (i.e. where the defendant is acquitted) will generally not be liable for the defendant’s costs provided the prosecution was brought in good faith. If the prosecutor is found by the court to have had no prospect in the case then the prosecutor will typically be found liable for the defendant’s costs (R (on the application of Aisling Hubert) v Manchester Crown Court v Dr Prabha Sivaraman  and s16 of the Prosecution of Offences Act 1985). It should be noted that in any significant prosecution, the party bringing the prosecution is expected to have sought quotations before choosing a solicitor and/or advocate to represent them. The prosecuting party therefore has a duty to demonstrate that both the incurring of costs by them and the amount of those costs are proper and reasonable in the case (Regina (Virgin Media Ltd) v Munaf Ahmed Zinga ). The prosecuting party cannot simply engage the most expensive advisers in the expectation that all costs will be fully recoverable from central funds by default.
As seen in the Vickerman prosecution, an offence under the CDPA may also constitute an offence under separate legislation or at common law. By way of example, enforcement agencies have historically relied on the Fraud Act 2006 and the common law offence of conspiracy to defraud in order to secure longer sentences than were previously available for copyright infringement under the CDPA. Times have since changed and following the controversial implementation of the Digital Economy Act in late April 2017, many offences under the CDPA now carry sentences of up to 10 years on indictment. Time will tell whether harsher sentences are handed down in practice and whether the prospect of a harsher sentence will tempt prosecutors away from pursuing related offences in favour of CDPA prosecutions.
IS A DEFENCE AVAILABLE?
Permitted acts under the CDPA
The CDPA sets out a number circumstances were acts which would otherwise constitute copyright infringement are instead explicitly permitted (s28-76). These circumstances are referred to as ‘permitted acts’. Examples of permitted acts include taking photographs of buildings or public sculptures (s62) and the making of accessible copies by disabled persons (s31A).
Strictly speaking, the permitted acts do not operate as defences to infringement but rather as exceptions. If a permitted act applies then there is no copyright infringement. If there is no infringement then most of the criminal offences in the CDPA, which are extensions of tortious primary or secondary infringement, will not apply. If the relevant CDPA offence does not require proof of infringement (e.g. s296ZB – devices to circumvent technological measures) then a permitted act will not save the accused.
Statutory and general defences
Certain of the criminal offences contained in the CDPA have their own statutory defences (i.e. the defences for that offence are set out in the CDPA). For example, the section 296ZB offence which relates to manufacturing, importing and commercially dealing in devices and services designed to circumvent copy protection technology carries a maximum sentence of 2 years on indictment but it is a defence under s296ZB(5) if the defendant can prove they did not know and had no reasonable ground for believing that the offending device or service enabled or facilitated the circumvention of the relevant copy protection systems. It should be noted that the burden of proof is the criminal standard of proof, i.e. ‘beyond reasonable doubt’ which makes the defence inherently more difficult to establish than the ‘permitted acts’ in the civil context.
Of significant note is that section 107 (making or dealing in infringing articles) has no statutory defence despite its maximum sentence on indictment being 10 years for offences under subsections 1(a),(b), (d)(iv) or (e). General criminal defences (such as duress or even insanity) may nevertheless be available in certain circumstances, depending on the facts of the case.
The ‘innocent infringer’ defence contained in s97 operates to prevent a civil claimant from obtaining an order for damages against the accused where the accused did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates. The defence operates without prejudice to any other remedy and therefore will not prevent the claimant from pursuing another order (e.g. for an injunction) if they are successful. In civil proceedings, the evidential burden for the claimant to prove knowledge on the part of the defendant is relatively low. As a result, the defence has been applied very narrowly in practice (see for example Hoffman v Drug Abuse Resistance Education (UK) Ltd ).
If a criminal defendant can demonstrate that they did not know their actions to be infringing then that lack of knowledge may be a saving grace for some, but not all, offences under the CDPA. Otherwise, the ‘innocent infringer’ defence itself will not offer protection to the criminally accused.
IS A CUSTODIAL TERM JUSTIFIED?
If a criminal offence has been committed, prosecuted, if no defence was available to the infringer and they are accordingly convicted, the key issue becomes sentencing.
In Wayne Evans it was reiterated that there are (currently) no formal sentencing guidelines for the criminal offences under the CDPA. This is somewhat disconcerting given that some offences carry a custodial sentence of up to 10 years. To counter this, the Court of Appeal in Wayne Evans suggested 7 non-exhaustive considerations which a judge should take into account when calculating an infringer’s sentence. The suggested considerations were expressed as being limited to the particular offences Mr Evans was convicted of but it is generally expected that they will nevertheless hold persuasive precedent for judges handing down sentences for other CDPA copyright offences.
The considerations were as follows:
- “First, illegal downloading and distribution is very often difficult to investigate and detect. It can give rise to serious problems and losses (none the less real for not being readily quantifiable) to the music and entertainment industry. Deterrent sentencing in such a context is appropriate.”
Convictions for online distribution and downloading of copyright materials are therefore likely to justify a deterrent (harsher) sentence than similar offline offences. Tougher penalties make online infringement riskier and the Court clearly hopes that will deter would-be offenders.
- “Second, the length of time (and including also any continuation after service of cease and desist notices) of the unlawful activity will always be highly relevant.”
Infringers who disregard notice of their infringement will be treated more harshly by the court. This suggests that continuing infringement after receiving a cease and desist notice will be treated as a flagrant disregard for the law.
- “Third, the profit accruing to the defendant as a result of the unlawful activity will always be relevant.”
Not all copyright offences under the CDPA require the infringer to have acted commercially. An infringer can receive up to 10 years in prison for knowingly distributing copyright material which prejudicially affects the owner of the copyright even if they do not receive a penny for doing so (s107(1)(e)). Nevertheless, if the infringer profited from their criminal activity then their sentence is likely to be increased relative to the profits made.
- “Fourth, and whether or not a significant profit is made by the defendant, the loss accruing to the copyright owners so far as it can accurately be calculated will also be relevant: as will be the wider impact upon the music industry even if difficult to quantify in precise financial terms: because wider impact there always is.”
In addition to whether a significant profit has been made, the length of sentence should also reflect the loss suffered by the victim. There appears to be a presumption that the impact of infringement will be wider than the victim will be able to substantiate.
- “Fifth, even though this particular type of offending is not the subject of any Definitive Guideline there may be cases where it will be helpful to a judge to have regard to the Definitive Guidelines on fraud, bribery and money laundering offences. In some cases, such as the present, that will positively be required because one or more of the counts on the indictment, as here, will be a count which comes within the ambit of the guideline itself. But even where that is not the position there may be some cases where a judge, at least if only as a check, may wish to refer to the Definitive Guideline to get a feel, as it were, for the appropriate sentence. However, there will be other cases where the Definitive Guideline may be of marginal, and perhaps no, assistance at all. That will be a matter for the assessment of the judge in the individual case. Where the Definitive Guideline is required to be taken into account because one of the counts on the indictment is within the ambit of the guideline, that of itself will no doubt lend assistance in deciding what the appropriate overall sentence will be.”
Where there are convictions for related offences not contained in the CDPA (such as for fraud, discussed above), the relevant sentencing guidelines for that offence should be consulted and may (depending on the facts) assist with the sentencing of the CDPA aspects of the conviction.
- “Sixth, personal mitigation, assistance to the authorities and bases and pleas of guilt are to be taken into account in the usual way.”
Mental illness, youth, having had only a minor involvement in the offence, entering an early guilty plea, showing genuine remorse and co-operating with the authorities compel more lenient sentences. The seven considerations set out in Wayne Evans should be treated as being complimentary to the generic aggravating and mitigating factors published by the Sentencing Council.
- And finally, “Seventh, unless the unlawful activity of this kind is very amateur, minor or short-lived, or in the absence of particularly compelling mitigation or other exceptional circumstances, an immediate custodial sentence is likely to be appropriate in cases of illegal distribution of copyright infringing articles.”
On the facts of Wayne Evans and by reference to the 7 considerations handed down by the Court of Appeal, the significant mitigating factors were that: Mr Evans did not make a financial gain (point 3); he had mental heath issues (point 6); and he pleaded guilty (point 6). Notable aggravating factors were that: the music industry was deemed to have materially suffered from Mr Evans’ activity due to the number of illegal downloads he facilitated (point 1); and he had continued to operate his website despite having received cease and desist notices (point 2).
CONCLUSION AND COMMENT
As a result of the Wayne Evans decision we have a clearer picture of the factors to be taken into account by a magistrate or judge when sentencing a copyright infringer. Simply put, the more aggravating factors and fewer mitigating factors (in particular, of the 7 types stated above) the longer a custodial sentence has the potential to be.
Custodial sentences are not, however, the only sentencing option available to magistrates and judges. A community sentence (i.e. unpaid work) and/or a fine will often be more appropriate for low-value offenders (assuming such cases get to court to begin with). Certain offences under the CDPA carry potentially unlimited fines which affords additional flexibility when sentencing offenders. The largest fines can be expected to be reserved for infringement-for-profit cases (such as counterfeiting operations) as a mechanism for denying perpetrators of their ill-gotten gains.
Company officers should be particularly careful of their potential liability under s110. A motivated prosecutor will not be deterred from pursuing the directors of a criminally infringing company if the directors sat idly by in the knowledge of the infringement. Tacit consent or connivance is equal grounds for criminal liability (although a lack of direct involvement may be a mitigating factor when it comes to sentencing).
All that said, the vast majority of criminal infringers are unlikely to find themselves in court. Stretched public sector budgets and the often unappealing prospect of bringing a disproportionately expensive private prosecution mean that low level and one time offenders are relatively unlikely to be pursued to the full extent of the law. Many businesses which fall victim to copyright infringement will be satisfied with the offending party paying civil compensation, their legal costs and giving an undertaking (complete with indemnity) that they will not repeat the behaviour. Typically, only where the offender is repeatedly and persistently hurting a business’ margins or has otherwise acted in a particularly flagrant manner will a prosecution result. Prosecutions brought by the CPS/Trading Standards are often used as a tool for deterring other offenders, hence deterrence being a key theme in the Court of Appeal’s decision in Wayne Evans, specifically in point 1 of the 7 principles.
If you suspect that you may be the victim of copyright infringement or if you simply wish to know more about the law on copyright and intellectual property rights generally, please contact Paris Smith’s Head of Intellectual Property, Laura Trapnell (by telephone on 02380 482114 or by email.
Similarly, if you are a business or individual and are concerned about potential exposure to proceedings for copyright infringement (including personal liability under section 110 of the CDPA in the case of a director), or you wish to know whether you can use certain materials (be it written works, recordings, film, music or any other form) for a particular purpose, please get in touch for an informal conversation to discuss how we can assist.
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