IN THE HIGH COURT OF JUSTICE CLAIM NO. HC11

Transcription

1 IN THE HIGH COURT OF JUSTICE CLAIM NO. HC11 CHANCERY DIVISION INTELLECTUAL PROPERTY B E T W E E N : (1) TWENTIETH CENTURY FOX FILM CORPORATION (2) UNIVERSAL CITY STUDIOS PRODUCTIONS LLC (3) WARNER BROS. ENTERTAINMENT INC. (4) PARAMOUNT PICTURES CORPORATION (5) DISNEY ENTERPRISES, INC. (6) COLUMBIA PICTURES INDUSTRIES, INC. (the members of the Motion Picture Association of America Inc., on their own behalf and on behalf of all other companies that are controlled by, controlling of or under common control with such members (together the Group Companies ) that are the owners, or exclusive licensees, of the copyright in films and television programmes) Claimants -and- DAVID HARRIS Defendant Draft/PARTICULARS OF CLAIM 1. The Claimants are members of the Motion Picture Association of America Inc. and carry on business in making, distributing or otherwise commercially exploiting motion pictures and television programmes. They sue in a representative capacity on behalf of themselves and on behalf of all other companies that are controlled by, controlling of or under common control with such members (together the Group Companies ) that are the owners, or exclusive licensees, of the copyright in films and television programmes. 2. For some time a website known as Newzbin has operated. It is directed to members of the public in the United Kingdom and has a very large number of members who use its services. Its sole purpose is to make available to its users unlawful copies of copyright works including (but, for the avoidance of doubt, not limited to) movies and television programmes. 1

2 3. The Claimants commenced an action ( the Newzbin action ) against Newzbin Limited, the company operating the Newzbin website, on 25 November 2008 (Case No. HC08C03346), which was tried by Kitchin J on dates in February and March In the Newzbin action: (1) Newzbin Limited was represented by the Defendant, a barrister, on a direct access basis. (2) The Defendant was responsible for settling the statements of case for Newzbin Limited. (3) The Defendant prepared the evidence for Newzbin Limited. 5. Further, as emerged during the course of the Newzbin action, the individual who uses the pseudonym Geeklawyer is the Defendant. The Claimants rely on the following facts and matters: (1) The following evidence which emerged in cross-examination of Mr Hurst on day 2 of the trial of the Newzbin action (see the extracts from the transcript in Appendix 1, at page 87, lines of the transcript for that day): Q. Over the page to 1240, who is Geeklawyer70? A. I don't know who Geeklawyer70 is. Q. You don't know who Geeklawyer is? A. No. Q. Where did you get this from then? A. This is from my lawyer. Q. So Mr Harris gave it to you? A. Yes, he did. Q. Is any of it stuff which is not generated by Mr Harris? A. Mr Harris generated all my evidence -- all my exhibits on my behalf. (2) The following tweets from Geeklawyer which appear on a document entitled GeekLawyer on Twitter as at 9 Feb 2010 (Appendix 2): (a) "trying to write my skeleton: brain not co-operating. Damned broken brain." - 26 January The Defendant served his Skeleton Argument in the Newzbin action late at 22.15pm on 29 January (b) "No, I'm getting trial bundles delivered from t'other side." - 26 January The Claimants solicitors in the Newzbin action ( Wiggin ) prepared and sent trial bundles to the Defendant on that date. 2

3 (c) "A long way from opponent. Christ knows how I'm gonna get all this to court. More perils of not having instructing solicitors." - 26 January Newzbin Limited and the Defendant did not instruct solicitors until later in the Newzbin action. (d) "Nelson v Rye [1996] FSR 313. I need the text of para 337 re authorisation to infringe. Wld be MUCH appreciated" - 28 January That paragraph of this authority was referred to at paragraph 13(iii) of the Skeleton Argument prepared by the Defendant in the Newzbin action. (e) "I am bollock knackered. Dear RCJ please don't phone me tomorrow. kthxbai. Wuv GL XXX" - 28 January The trial of the Newzbin action was floating from 1 February 2010, and the start date of that trial was confirmed on 29 January (f) "I could do with another month to prepare ;)" - 28 January As set out above, the Defendant served his Skeleton Argument in the Newzbin action the following evening; at this time the trial of the Newzbin action was floating from 1 February (g) "Bugger judges chancery division hassling me for my skeleton. Trial is on monday. damn" - 29 January The trial of the Newzbin action took place in the Chancery Division. The Defendant was late in serving his Skeleton Argument. On 29 January 2010 Wiggin notified the Defendant that the trial would commence on Monday 1 February 2010, as was confirmed by the Court that day. (h) "I did my cross-examination of expert yesterday. Bugger wouldnt cooperate but I had him" - 2 February The Defendant cross-examined the Claimants' expert witness in the Newzbin action on 1 February (i) "today I are mostly listening to opponents cross examination. It was a bit cross" - 2 February The Claimants counsel began his cross-examination of the Newzbin Limited's witnesses in the Newzbin action on 2 February (j) "left robes in hotel once. Judge permitted me to appear unwigged, he invited other barrister to appear likewise: prick refused" - 5 February The Defendant appeared unrobed during the trial of the Newzbin action. (k) "my closing submissions are tomorrow" - 7 February The Defendant would have been due to make closing submissions in the Newzbin action on 8 February 2010, although in light of submissions that he made on the morning of that day, the trial was adjourned until 10 February (l) "Oh my re-examination powers were WEAAAKKK today" - 8 February The Defendant re-examined the Newzbin Limited's witnesses in the Newzbin action on 8 February

4 (m) "amending Company Articles so that IRC, Twitter & Facebook are legit methods of holding board meeting. This may be a corporate first!" - 8/9 February The minutes of a meeting of the board of directors of Newzbin Limited, which are at page 1 of the exhibit to the Defendant s statement made in the Newzbin action dated 18 February 2010 (Appendix 3), record at paragraph 1 that a resolution was passed that board meetings were to be by "any form of electronic communication including without limitation , irc, Twitter or Facebook". (n) The following tweets concerning Wiggin (referred to in those tweets as "Wiggin Slimebags") (Appendix 4) that were made on 25 February 2010 at 17:21 GMT: ha! ew I being spied on! You slimebags are sooo fucking obvious and a minute later ha! new I being spied on! You w**gin slimebags are sooo fucking obvious. This was the same day as the Claimants supplemental Skeleton Argument was lodged at court and the first time that the Claimants and Wiggin disclosed to the Defendant their knowledge of the Geeklawyer tweets in that reliance was placed on one of those "tweets" as demonstrating that UK users of Newzbin were using the Newzbin website to download infringing content because Geeklawyer had tweeted that he had downloaded and watched a film the previous evening. (o) The letter from Wiggin to the then solicitors for Newzbin Limited ( Kirwans ) dated 25 March 2010 referred to, and enclosed, tweets made by Geeklawyer concerning the draft judgment in the Newzbin action before that judgment was made public (Appendix 5). Kirwans did not respond to this issue. The privacy settings on the Geeklawyer account were changed on that day. 6. In addition, as emerged from the cross-examination of Mr Hurst and Mr Elsworth on 2 February 2010 and 3 February 2010 respectively (see the extracts from the transcript in Appendix 1), the Defendant was a director of, and owned and controlled, Newzbin Limited. 7. Further to paragraph 6 above: (1) The Defendant was a director of Newzbin Limited from 17 December 2009 using the alias David Bahan. In this regard: (a) According to documents lodged at Companies House (Appendix 6), David Bahan has two different addresses, one of which is the same as an address given for the Defendant (28, Sillwood House, Brighton BN1 2LE). (b) Further, according to those documents [and the documents in Appendix 7], David Bahan has 3 different dates of birth (6/5/59, 1/12/63, and 4/11/64), one of which is the same as the Defendant s date of birth (namely 6/5/59). 4

5 (c) At the meeting of the directors of Newzbin Limited held electronically on 9 February 2010, at which the Defendant was appointed as a director Newzbin Limited (Appendix 8), the Defendant was present and David Bahan was absent (such that they were not both present at the same time). (d) According to the directors report, signed by the Defendant, in the draft accounts for Newzbin Limited for the year ended 31 December 2009 (Appendix 9), David Bahan was appointed a director of Newzbin Limited on 17 December 2009 and resigned as a director on 15 February 2010, and the Defendant was appointed as a director on 15 February 2010 (such that they were not both directors at the same time). (e) Mr Elsworth, a director of Newzbin Limited until his resignation on 9 February 2010, stated during cross-examination that he did not know who Mr Bahan was and that Mr Bahan was appointed as a director without his knowledge (Appendix 5). (2) Alternatively, the Defendant was the sole director, alternatively a director, of Newzbin Limited from 15 February The Claimants rely upon: (a) Paragraph 7(1)(d) above. (b) The Defendant s witness statement dated 18 February 2010 made in the Newzbin action (Appendix 3). (3) The Defendant was and became the owner and controller of Newzbin Limited from December 2009, as set out on page 11 of Appendix 9: As of December 2009 the company was controlled by the sole shareholder, Mr David Harris. 8. Further, as also emerged in the course of the trial of the Newzbin action (see Appendix 10): (1) The Defendant used the Newzbin username UKITLaw and had the status of Editor Administrator on the Newzbin website, that is to say he was one of the individuals responsible for managing, and creating guidelines for, so-called editors who were engaged by Newzbin Limited to post reports of infringing content on the Newzbin website. (2) Accordingly, the Defendant was active in the operation of the Newzbin website. 9. By his Judgment in the Newzbin action dated 29 March 2010 ([2010] EWHC 608 (Ch)) (Appendix 11), Kitchin J held that: (1) There are approximately 700,000 members of the Newzbin website [15]. (2) The Newzbin website is a substantial business generating in excess of 1million turnover [15]. (3) The operator of the Newzbin website encourages editors to include films the vast majority of which are commercial and likely to be copyright protected [78]. 5

6 (4) The members of the Newzbin website use the website to download those films and in doing so are infringing copyright and the operator of the Newzbin website was aware of this [78]. (5) The members of the Newzbin website are very substantial in number and primarily interested in films. In the circumstances, the inference that the members had in fact infringed copyright by downloading films, including those examples specifically identified in the proceedings, was overwhelmingly likely [97 and 124]. (6) The operator of the Newzbin website (a) infringed copyright by (i) authorising users to make copies [102] (ii) procuring users acts of infringement (copying) and participating in a common design with the users [112] and (iii) communicating the copyright works to the public [125]; and (b) had engaged in a deliberate course of conduct well knowing that the vast majority of the materials in the Movies category were protected by copyright and that the users of the website who download the materials are infringing copyright [128]. 10. By Order in the Newzbin action dated 14 April 2010 and sealed on 16 April 2010 (Appendix 12) Kitchin J: (1) Restrained Newzbin Limited from further acts of copyright infringement. (2) Directed an inquiry as to damages to include an inquiry as to additional damages pursuant to section 97 of the Copyright, Designs and Patents Act 1988 ( the 1998 Act ). (3) Ordered that Newzbin Limited pay the Claimants costs on an indemnity basis. (4) Ordered that Newzbin Limited should make an interim payment of 230,000 to the Claimants on account of those costs by 4pm on 28 April Thereafter: (1) On 15 April 2010 Kirwans wrote to Wiggin stating that: as at 14 April 2010, [Newzbin Limited] has a cleared balance of 5, in its HSBC current account. Moreover, this represents the entirety of our client s current cash.... It is therefore clear that [Newzbin Limited] is not in a position to make the interim payment of 230,000 within 14 days. (2) By letter dated 26 April 2010 (Appendix 13), the Defendant (in his capacity as a director) gave notice to creditors of Newzbin Limited that the Directors [sic] of Newzbin Limited had decided to commence liquidation proceedings. (3) On 17 May 2010 a meeting of the creditors of Newzbin Limited took place and Mr Wykes, a representative from Smith & Williamson, attended as proxy for the Claimants and took notes (Appendix 14). At that meeting (among other things) the Defendant stated: 6

7 (a) That, in addition to the payment of equity dividends in the sums of 400,000 (2008) and 415,000 (2009) disclosed by the draft accounts of Newzbin Limited for the year ended 31 December 2009 (Appendix 9), further payments of between 200,000 and 250,000 had been made to former shareholders in Newzbin Limited. With regard to these further payments, the Claimants contend (i) that they contradict the evidence of Mr Elsworth at the trial of the Newzbin action (see Appendix 5) that the transfer of shares to the Defendant was for no consideration (ii) that, as appears from the letters with enclosures dated 18 and 24 June 2010 to Wiggin from the liquidator of Newzbin Limited (Appendix 15), these payments comprised part of the consideration that the Defendant agreed to pay Messrs Elsworth, Skillen and Hurst (the former shareholders and officers of Newzbin Limited) for their shares (iii) these payments include a payment of 2,000 that was made to Mr Skillen on 2 April 2010, and payments of 4,000 and 1,200 that were made to Mr Elsworth and Mr Hurst respectively on 12 April 2010, shortly before Newzbin Limited was ordered by Kitchin J to make an interim payment of 230,000 to the Claimants on account of their costs in the Newzbin action and before Kirwans wrote as set out in paragraph 11(1) above. (b) That 290,000 had been paid to the Defendant personally in respect of legal fees, as to 60,000 on his acquisition of the shares in Newzbin Limited in December 2009, as to 180,000 in respect of his legal fees for defending the Newzbin action, and as to a further 50,000 for a second legal bill following the trial of the Newzbin action. However, by his witness statement dated 9 July 2010 (Appendix 16) served by him in response to the Claimants application for an order for the compulsory winding up of Newzbin Limited, the Defendant contends that this figure of 290,000 is incorrect, and that the total sum that he was paid in respect of legal services that he provided to Newzbin Limited between 2006 and early 2010 amounted in total to 260, (4) Also at that meeting, the Defendant voted in respect of a claim for 555,340 on the basis that he had been given a proxy in that regard by HKB Operations Limited ( HKBO ), a Hong Kong registered software development company. As to the legitimacy of the debt claimed by HKBO, the Claimants contend as follows (see Appendix 17): (a) An unsigned copy of an agreement apparently entered into between Newzbin Limited and HKBO dated 11 April 2009 ( the HKBO Agreement ), together with related funding letters ( the Funding Letters ) were provided to Wiggin by the liquidator of Newzbin Limited by letter dated 18 June (b) The HKBO company letterhead refers to the domain "HKBOps.hk". A "WhoIs check" conducted using the search facilities provided at confirms that HKBOps.hk is not a registered domain. 7

8 (c) The physical address of HKBO appears to be shared by many other businesses, which accords with it being nothing more than a mail drop address. (d) The number of development hours listed in the Funding Letters comprise 240 hours (funding letter of 12 June 2009); 1,377 hours (funding letter of 16 October 2009); and another 1,377 hours as well as a further 2,800 projected development hours (funding letter of 19 December 2009). The total amount of these hours appears excessive. Further, so far as concerns the projected development hours listed in the 19 December 2009 funding letter, no material changes reflecting this amount of development time were made to the operation of the Newzbin website in this period or before the Newzbin website ceased to operate. (e) The approval of funds for the projected development hours listed in the 19 December 2009 funding letter was provided by an individual who identified himself as Mr Bahan, apparently only two days after he was appointed a director of Newzbin Limited on 17 December With regard to whether the Defendant and Mr Bahan are one and the same person, paragraph 7(1) above is repeated. (f) Although HKBO purportedly provided software development services and bandwidth to Newzbin Limited, no mention of HKBO was made during the trial of the Newzbin action, despite cross-examination of the witnesses for Newzbin Limited concerning the source code and operation of the Newzbin website. Further, Newzbin Limited provided no disclosure of any document that related to HKBO. Although the HKBO Agreement states that "Because of the litigation against Newzbin this agreement is highly confidential and must remain confidential to protect the commercial viability of both this agreement and the positions of the parties", the commercial activities envisaged by the HKBO Agreement are unclear, and it is also unclear whether there is or was at any material time a legitimate operation trading as HKBO at all. (5) Also at that meeting, the Defendant confirmed that the domain name at which the Newzbin website was located, together with a further domain name ( ( the Domain Names ) were sold to a company called WCIS Limited ( WCIS ) by him shortly after the Judgment in the Newzbin action was handed down to preserve the status quo. In this regard, the Claimants contend as follows (see Appendix 18): (a) This comment reflected the Defendant s intention to ensure that the Newzbin website could continue to operate in infringement of copyright in spite of the findings in the Judgment of Kitchin J and the Order of Kitchin J in the Newzbin action. (b) It appears from a report by the domain-based research service provider WhoIs in respect of the newzbin.com domain that the transfer of the domain to WCIS 8

9 was effected on 1 April Further, the liquidator of Newzbin Limited has confirmed that the company received a payment of 40,000 from WCIS on 24 March (c) In light of the fact that the accounts of Newzbin Limited give a net book value of 169,660 for software development as at 31 December 2009, it appears that this sale to WCIS was made at an undervalue. (d) According to a report prepared for Wiggin by Dun & Bradstreet ( D&B ) dated 26 June 2010, (i) the registered office address of WCIS is c/o Intershore Consult (Pty) Ltd, (ii) capital and shareholder information in respect of WCIS was not available and this information was declined, (iii) Mr Nicolas Boulle, who is understood by Wiggin to be the General Manager of Intershore Consult (Pty) Ltd, declined to provide financial information to D&B and, to date, has not responded to correspondence sent to him by D&B. Accordingly, details regarding WCIS are opaque, it is unclear who is behind WCIS, and the legitimacy of WCIS and this transaction are open to question. (6) On or about 18 May 2010, the Newzbin website was taken down and Newzbin Limited went into liquidation. (7) On or about 28 May 2010 the website was reinstated at the same domain name ( 12. Further to paragraph 11 above: (1) Save that it has now dropped the pretence that it offers a useful service in respect of text only messages, the website operates in exactly the same way as the Newzbin website; its appearance is exactly the same (save for an addition of the number 2 to the graphic of the name making it Newzbin2 ). (2) The Newzbin2 website uses the same code and databases as was used to generate and operate the Newzbin website. (3) In short, the Newzbin2 website is the same as the Newzbin website; its purpose is the same; and the use to which it is put by its members is the same. 13. As appears from the documents in Appendix 19: (1) The Newzbin2 website is being operated by persons who have taken care to maintain their anonymity (they use pseudonyms taken from the Reservoir Dogs motion picture). (2) Further, these persons claim to be different to the individuals previously involved in the operation of the Newzbin website and claim to have obtained access to (or stolen) the code and databases used to generate and operate the Newzbin site and which they are using to generate and operate the Newzbin2 website. 9

10 (3) The Newzbin2 website is being operated from servers situated outside the jurisdiction, currently in Sweden. 14. Notwithstanding paragraphs 13(1) and 13(2) above, and contrary to the Defendant s denials contained in his witness statement dated 9 July 2010 (Appendix 16) served by him in response to the Claimants application for an order for the compulsory winding up of Newzbin Limited, the Claimants contend that: (1) The Defendant is and was at all material times the operator of, alternatively one of the operators of, the Newzbin2 website. (2) The Defendant set up the operation of Newzbin2, including (as the Claimants will invite the Court to infer) by transferring to the operation of the Newzbin 2 website, the source code and database code and databases used to generate and operate the Newzbin site. 15. Further to paragraph 14 above, the Claimants rely upon the following facts and matters: (1) In February 2010 Geeklawyer tweeted as follows (Appendix 20): Just realised: business I've been busily setting up servers & offshore companies for: haven't sorted pricing model out. Doh! #planningfail. (2) The following comments posted by users of the Newzbin2 website in relation to an article entitled: Newzbin is back with same domain, data & codebase. Mr White releases statement (Appendix 21), from which it appears that Newzbin2 cannot be operating in reliance on a source code stolen from Newzbin Limited alone: (a) From initial looks at the site earlier, the newest reports were a mere 21 days old (edit: incorrect, see update 3)[corrected in Update 3 to 15 days]; meaning that the database theft /backup occurred only 6 days before the actual shut down on the 18 th May. (b) The code and database can t be that long like some have speculated it to be. They seem to have my [sic] roughly my right amount of credit days remaining from when the original Newzbin suspended credits. (c) All my saved searches were restored, including one which had been created on or after April 20. So the user database theft could not have occurred any earlier than that -- ie. less than a month before Newzbin shut down. (3) As appears from records at Companies House (Appendix 22) the Defendant is the sole director of a company called Kthxbai Limited (company registration number is ) which was incorporated on 21 December (4) As appears from the documents included in Appendix 23: 10

11 (a) (b) (c) (d) (e) (f) At all material times, users of the Newzbin2 website were able to make payments through that website by PayPal and credit card. The recipient of PayPal payments is Kthxbai Limited. The address provided on the PayPal payment receipt as at 21 June 2010 was This was amended to on or before 11 November The fileorgy.com domain registration lists geeklawyer in its contact details. The registration history of fileorgy.com suggests that Mr Harris acquired the domain on 5 March A job vacancy at Kthxbai Limited was advertised online at The Defendant was listed as the relevant contact. (5) Contrary to the Defendant s denials contained in his witness statement dated 9 July 2010 (Appendix 16), served by him in response to the Claimants application for an order for the compulsory winding up of Newzbin Limited, the Claimants contend that his involvement with Kthxbai Limited, and the fact that this company receives payments as set out above, shows that, alternatively supports their case that, he is operating the Newzbin2 website. 16. On the basis that (a) a substantial number of members and users of the Newzbin2 website use the services of British Telecommunications plc ( BT ) to connect to the Internet and gain access to the Newzbin2 website (b) those individuals use BT s service to infringe copyright by making copies of copyright works without the consent of the copyright owners (including the Claimants) (c) the operators of the Newzbin2 website also use BT s service to infringe copyright in the 3 ways identified by Kitchin J in his judgment in the Newzbin action (d) BT has actual knowledge that its service is being used by other persons to infringe copyright and (e) especially as the Newzbin2 website is being operated from servers outside the jurisdiction, BT is best placed to bring the aforesaid infringing activities involving BT s services to an end, the Claimants sought and obtained an injunction against BT pursuant to section 97A of the 1998 Act requiring BT to takes steps with a view to preventing its service being used by users and operators of the Newzbin2 website to infringe copyright, as appears from the Judgments and Order of Arnold J dated 28 July 2011([2011] EWHC 1981(Ch)) and 26 October 2011 ([2011] EWHC 2714(Ch)) (Appendix 24) ( the Newzbin2 action ). 17. At the hearing in the Newzbin2 action before Arnold J on 14 October 2011, which was concerned with argument as to the form of Order which ought to be made against BT, there was before the Court an application notice dated 6 October 2011 supported by a witness statement of the same date in the name of Desmond McMahon ( Mr McMahon ), who claimed to be a BT subscriber who would be adversely affected by the proposed Order. The Claimants case with regard to these matters (see Appendix 25) is as follows: 11

12 (1) The address given for Mr McMahon is not recognised by the Land Registry or the Royal Mail. (2) In response to the contention that Mr McMahon lives on a houseboat, (a) the houseboat is said to be opposite a public house, which has been closed for a long time, and (b) it is not accepted that Internet access would be available to someone living on a houseboat. [Name of the boat was referred to inconsistently. I think FACT located a boat of a similar name but this was not suitable for navigating the channel as stated] (3) The same Counsel (Jane Lambert) was instructed by Mr McMahon in the Newzbin2 action as had been instructed by the Defendant in the Newzbin action. She stated in conversation in Court before the hearing on 14 October 2011 began that she had never met or spoken to Mr McMahon, that she had no evidence to suggest that Mr McMahon was not the Defendant and that it had crossed her mind that they might be one and the same person. (4) The second version of Mr McMahon s witness statement was delivered as a word document. The document s metadata states the author to be Desmond, but the last-saved-by field reads David Harris. (5) The exhibits to Mr McMahon s witness statement were created, in part, by Casual Editors of the Newzbin2 website, and some of the evidence that is relied on in the first version of that witness statement (which was provided by Mr McMahon to BT under cover of a letter dated 30 September 2011) was not in existence at the time the first version was made and appears to have been created for the purpose of Mr McMahon s application. (6) The Defendant was seen at Chancery Court listings on or about the day on which Mr McMahon s application was issued. (7) On 11 October 2011, Geeklawyer commented on a blog that Usenet is often faster than torrents. The same point is made at paragraph 10 of the second version of Mr McMahon s witness statement. (8) In the premises, in truth and in fact Mr McMahon does not exist and it was the Defendant who took the steps summarised above, alternatively (if Mr McMahon does exist) those steps were taken by Mr McMahon at the instigation of the Defendant or with the participation of the Defendant. 18. As appears from their own postings on the Newzbin2 website (Appendix 26), and in spite of the Judgments and Orders of Kitchin J and Arnold J in the Newzbin action and in the Newzbin2 action respectively, the operators of the Newzbin2 website (comprising or including, as the Claimants contend, the Defendant): 12

13 (1) Determined to carry on infringing the Claimants copyrights using and through the medium of the Newzbin2 website in the 3 ways identified by Kitchin J in his judgment in the Newzbin action. (2) Took steps to defeat, circumvent or impede the efficacy of the Order of Arnold J in the Newzbin2 action. 19. For the reasons and in the circumstances set out above, since at least December 2009 (see paragraph 7 above) the Defendant has infringed and continues to infringe the copyrights of the Claimants and the Group Companies in films and television programmes: (1) Jointly with Newzbin Limited, without the licence or consent of the Claimants or the Group Companies, (a) authorising users of the Newzbin website to make infringing copies of such works, (b) procuring those users to make infringing copies of such works and participating in a common design in that regard with those users, and (c) using or through the medium of the Newzbin website, communicating those copyright works to the public. (2) As the sole operator of the Newzbin2 website, alternatively jointly with the other operator or operrators of the Newzbin2 website, acting by reference to the Newzbin2 website in each of the ways identified in paragraph 18(1) above. 20. Further: (1) The Claimants and the Group Companies had an equitable proprietary interest in their copyrights and in the products of the infringement of their copyrights in the hands of (a) Newzbin Limited and (b) the operator(s) (comprising or including the Defendant) of the Newzbin 2 website. (2) In dealing with those copyrights in the manner complained of above, further or alternatively in causing or permitting those products to be disposed of or otherwise dealt with as set out in paragraph 11 above, both (a) Newzbin Limited and (b) the operator(s) (comprising or including the Defendant) of the Newzbin 2 website acted in breach of trust. (3) The Claimants admit and aver that others whose copyrights were infringed in the like manner to the infringements complained of above have like claims to those set out in subparagraphs (1) and (2) above, and will contend in this regard (a) that it is not open to the Defendant to rely upon these matters in defence of the relief claimed herein although (b) if and to the extent that any recoveries effected by the Claimants relate to the infringement of the copyrights of others, those recoveries will be held on trust for those others by the Claimants and/or the Claimants will not be entitled to deal with or dispose of those recoveries without further order(s) of the Court. 21. Further, the Defendant: 13

14 (1) Knew or ought to have known that the transfers to him of the monies representing or derived from the unauthorised and infringing exploitation of those copyrights which are referred to in paragraph 11(3)(b) above were made in breach of trust. (2) Was not a bona fide purchaser for value of the monies he received without notice of the claims to the same of (among others) the Claimants and the Group Companies. On the contrary, for the reasons and in the circumstances set out above, the Defendant received and/or retained the products of the unauthorised and infringing exploitation of the copyrights of (among others) the Claimants and the Group Companies knowing of circumstances giving rise to the above trusts, and, in any event, in circumstances which would make it unconscionable for him to retain the same. 22. In the premises: (1) Newzbin Limited and the operator(s) (comprising or including the Defendant) of the Newzbin2 website are each liable for breach of the fiduciary duties that they owed as trustees. (2) Further, they are each liable to reconstitute the above trusts and/or to pay equitable compensation to make good the loss and damage caused by their breaches. (3) Further, the Claimants and the Group Companies are entitled to trace and/or follow the above trust assets into the hands of the Defendant. (4) Further or in the alternative to sub-paragraph (3) above, the Defendant became bound by the above trusts, further or alternatively he is liable for knowing receipt of that part of the above trust assets that he received and/or retained. (5) Further or in the further alternative, each of (a) Newzbin Limited and (b) the operator(s) (comprising or including the Defendant) of the Newzbin2 website and (c) the Defendant are liable to reconstitute the above trusts with and/or to account in equity to the Claimants and the Group Companies severally in respect of that part of the above trust assets that they each severally received and/or retained. (6) Further or alternatively, the Defendant was involved in the dissipation of the above trust assets, and he is liable for dishonest assistance in the breaches of trust of (a) Newzbin Limited and (b) the operator(s) (other than the Defendant himself) of the Newzbin 2 website. 23. Further or alternatively, the Defendant was a party to a conspiracy or conspiracies with (a) Newzbin Limited and (b) the operator(s) (other than the Defendant himself) of the Newzbin 2 website to injure the interests of (among others) the Claimants and the Group Companies by unlawful means, that is to say by infringing copyright and by inducing or assisting in the breaches of trust complained of above. 14

15 24. Further, the Claimants are entitled to, and claim, interest (including compound interest) in equity and/or pursuant to section 35A of the Supreme Court 1981 at such rate and for such period(s) as to this Court seems just and apposite to be assessed. And the Claimants claim: 1. A declaration that the Defendant has infringed the copyrights of the Claimants and the Group Companies in films and television programmes that are owned by or exclusively licensed to them ( the Claimants Works ) 2. An injunction to restrain the Defendant from infringing the copyrights of the Claimants and the Group Companies in the Claimants Works, including and in particular by doing the following acts or any of them without the licence of the Claimants or the Group Companies,that is to say: (a) authorising users of the Newzbin2 website to make copies of the whole or any substantial part of the Claimants Works, (b) procuring users acts of infringement (copying) and participating in a common design with the users, (c) communicating the whole or any substantial part of the Claimants works to the public, and (d) authorising any other person or persons to do any of the foregoing or any other acts restricted by the copyright in the Claimants Works 3. An inquiry as to damages for infringement of copyright in the Claimants Works, or, at the election of the Claimants, an account of the profits made by the Defendant by reason of those infringements of copyright, including (for the avoidance of doubt) additional damages pursuant to section 97(2) of the 1998 Act 4. A declaration that all assets representing or derived from the exploitation by (a) Newzbin Limited and (b) the operator(s) (comprising or including the Defendant) of the Newzbin 2 website of the Claimants Works are and were at all material times held on trust for the Claimants and the Group Companies 5. An order that those assets be transferred to the Claimants forthwith 6. An account of the use or application of, and any profits, investment income, growth and interest earned on, those assets, from their recovery or receipt by the Defendant to the taking of the account 7. An order that the Defendant do pay to the Claimants the sums found to be due on the making of the above inquiries and/or the taking of the above accounts 8. Equitable compensation for dishonest assistance in the dissipation of those assets 9. Damages for conspiracy to injure by unlawful means 10. Interest (including compound interest) in equity and/or pursuant to section 35A of the Supreme Court 1981 at such rate and for such period(s) as to this Court seems just and apposite to be assessed 11. Costs 15

16 12. Such further or other relief as to the Court may seem just or apposite RICHARD SPEARMAN QC Served on [ Solicitors for the Claimants. ] 2011 by Wiggin LLP of 10 th Floor, Met Building, Percy Street, London W1T 2BU. STATEMENT OF TRUTH The Claimants believe that the facts set out in these Particulars of Claim are true. I am authorised to sign this statement of truth on behalf of the Claimants. Signed Dated.. 16