Twentieth Century Fox Film Corporation & Ors v Harris & Ors

A company director may be liable jointly with the company for copyright infringement where he procures, directs and shares a common design to commit the infringement. Liability is not avoided because the acts were carried out through a company.

An unlawful-means conspiracy may be established where conspirators combine to infringe copyright or commit conspiracy to defraud. Each conspirator need not perform every act. A director may also combine with companies under his control because their separate legal personalities remain relevant.

Intention to injure may exist where loss is used as the means of enriching the conspirators or protecting their own economic interests.

The claimants, copyright owners and exclusive licensees represented by the Motion Picture Association of America, sued David Harris and corporate defendants for copyright infringement and unlawful-means conspiracy. The proceedings followed the earlier N1 action against Newzbin Limited and the N2 action, in which Arnold J granted blocking relief against British Telecommunications plc under section 97A of the Copyright, Designs and Patents Act 1988.

The claimants alleged that Mr Harris controlled Newzbin’s original website, operated its successor, and used associated companies to receive and conceal the proceeds. Mr Harris denied responsibility and relied on the principle in Henderson v Henderson. The issues included his personal liability for the infringements and whether the defendants had combined to injure the claimants by unlawful means.

1. Copyright infringement. The claim against Mr Harris was not an abuse of process. The claimants had not known before or during the N1 trial that he was Newzbin’s sole owner and director, and he had deliberately misled the court about his role.
2. A director is liable as a joint tortfeasor where he does more than perform constitutional functions and instead intends, procures and shares a common design that the infringement occur. The relevant question is whether he has so involved himself in the tort as to make it his own. Applying MCA Records Inc v Charly Records Ltd, CBS Songs Ltd v Amstrad Consumer Electronics Plc and Unilever Plc v Gillette (UK) Ltd, Mr Harris was liable for the N1 infringements between 19 December 2009 and 18 May 2010.
3. Mr Harris was also liable for the N2 infringements between 28 May 2010 and 28 November 2012. The N2 website was materially the same as its predecessor and was designed to continue the infringing activity. He was either the sole tortfeasor or, where others were sufficiently involved, also liable as a joint tortfeasor.
4. An unlawful-means conspiracy requires:
   1. a combination of two or more persons;
   2. action which is unlawful in itself;
   3. intention to cause damage to a third party; and
   4. damage suffered by that party.
   The combination may be tacit. It is unnecessary for every conspirator to perform every act.
5. Separate corporate personality does not prevent a director from combining with the companies he controls. Applying Kuwait Oil Tanker v Al Bader and Digicel (St Lucia) Ltd v Cable & Wireless Plc, the court found a single overarching conspiracy involving Mr Harris and the corporate defendants.
6. Copyright infringement constituted unlawful means. Following Revenue and Customs Commissioners v Total Network SL, criminal conduct, including conspiracy to defraud, may also constitute unlawful means even where it is not independently actionable as a tort against every conspirator. The definition in Scott v Metropolitan Police Commissioner was satisfied by the dishonest appropriation of copyright-related revenue and property.
7. The intention requirement was satisfied. Under OBG Ltd v Allan, loss is intended where it is used as a means to the end of enriching the conspirators or placing assets beyond the claimant’s reach. The unlawful means caused loss to the claimants.
8. The claimants therefore established unlawful-means conspiracy against Mr Harris and the other Effective Defendants, based both on conspiracy to infringe copyright and conspiracy to defraud. Liability was determined, while the precise relief, interim payment and certain ownership issues were left for subsequent consideration.