The Mere Conduit Defence

The interplay between Reg.17 (Art.12 E-Commerce Directive) and s.28A CDPA 1988, has been flagged as inappropriate by some.²³⁵

Refreshing one’s recollection, Reg.17 states that OSPs that transmit information provided by a recipient of the service, or provide access to a communications network, are principally exempt from liability if they did not initiate the transmission,²³⁶ select the receiver of the transmission,²³⁷ or select or modify the information contained in the transmission.²³⁸ Expressly included in these acts of transmission are automatic (in the ordinary operation of the technology), intermediate (in the course of a transmission) and transient (limited time) storage of information; provided this is done only for the purpose of carrying out the

233 Part2,ChapterD.

234 Part2,ChapterD(V).

235 Larusson,(n186),131.

236 Recital 43; The OSP may be the transmitter of the information but not start off the process.

237 Recital 43; Whereas a OSP may direct the information to the recipient this must be automated and the recipient not selected.

238 The exception to this and would be manipulations of a technical nature taking place in the course of a transmission being necessary.

89 transmission in the communication network and where such information is not stored longer than is reasonably necessary for the transmission itself. The definition of this defence in the UK Regulations mirrors that of the Directive.

In terms of intrinsic guidance for interpretation for judges and lawyers alike, the Recitals to the Directive clearly specify that OSPs are only to benefit from the defences, in particular “mere conduit” and “caching” where OSPs are not involved either with the information being transmitted or modified. The exception to this would be technical manipulations to aid the transmission itself.²³⁹ Interestingly, in terms of 3PCL, the Directive states expressly that OSPs that deliberately

“collaborate” with the recipients of their services, with the effect of their actions being illegal in nature, will not be able to benefit from the “mere conduit” or

“caching" defences.²⁴⁰

As mentioned above, the defence also relates to other torts/crimes and not just copyright infringement.²⁴¹ From a copyright perspective, the contextual similarities between s.28A and Reg.17 have led some commentators to identify an overlap, which certainly exists.²⁴² Other more aggressive commentators such as Larusson have attacked this position, suggesting that such is only arrived at by looking at both from afar, possibly without spectacles.²⁴³

Deconstructing Larusson

Given the requisite descriptions above there is an area of overlap between both defences, since there can be situations when both could conceivably apply.

Larusson is wrong to state otherwise. This is however not to say that both provisions have the same aims or indeed scope. Furthermore, contrary to the reading of some commentators, it may be argued that where EC Regulations conflict with amendments made to the CDPA 1988 made as a result of the EUCD;

the former do not automatically prevail due to the E-Commerce Directive

239 Recital 43.

240 Recital 44.

241 For example in libel actions: Metropolitan International Schools Limited -v- Designtechnica, Google Inc and Google UK Ltd,[2009]EWHC1765(QB).

242 Copinger,(n91),[9-17].

243 Larusson,(n186),131.

90 (Extension) Regulations 2004 merely because these were brought into force in relation to the Sexual Offences Act 2003.²⁴⁴

Whereas it may accurately be noted that one of the main differences between both defences is the s.28A requirement of “independent economic significance”, it an interpretation of such could yield significant similarities with the spirit of Reg.17 in particular as it relates to the length of storage in Reg.17(2)(b) when taking into account Kitchin J’s thoughts in F.A.P.L. v QC Leisure concerning data slices.

There are three other differences between the two defences. Reg.17 delineates the actual attributes of any transmission by an OSP in more detail, especially regarding the selection of the transmission and the length of its storage; whereas at the same time it also applies not only to literary works but also, importantly for this thesis, to sound recordings and films and also not only to alleged infringements of the reproduction right, but again importantly for this thesis, to the making available/communication to the public right. As such Reg.17 applies to a much broader range of liability situations for OSPs, which is not to say that it would ultimately yield the desired result.

What this means in practice for OSPs

In terms of the practical impact on OSPs it is worth reiterating that the defence of mere conduit applies to all actions taken by the service provider, that is to say the defence is not limited to transient reproduction, but will also cover;

a) the storage of infringing copies (if necessary for and the intermediate transmittal purposes of the service);²⁴⁵ as well as

b) acts of communicating works/making available works to the public.

It is of course logical that the defence does not apply to acts by an OSP falling into the category of joint tortfeasorship, as hinted at in the above reference to recital 44 and “collaboration”.

244 H Larusson,(n186),131. Moreover, Larusson’s statement regarding the words in Reg.17 “if he otherwise would” is arguably also incorrect, since it may by some be read independently, especially bearing in mind that this is a transposition.

245 Storage otherwise may fall within the “hosting” defence covered by Reg. 19 EC Regulations.

91 Interestingly, especially with a view to a later comparison to the US position however, any imputed or knowledge of actual fact that an OSP’s services are being used as a conduit for infringing material, is immaterial to the operation of the defence insofar as such falls short of the above-mentioned standard of

“collaboration”/joint tortfeasorship.²⁴⁶ The impact of this is that the defence operates in the realm of primary liability for copyright infringement.

There is not, at the time of writing, in England and Wales, much case law available dealing with the mere conduit defence. Fortunately for this thesis however, those cases which have featured a consideration of such, despite predominantly dealing with torts of libel or defamation, are in a digital context and may be used to extrapolate principles of the legislation in action.

In Bunt v Tilley,²⁴⁷ a claimant had at first instance sought remedies for defamation against six defendants, the first three being individuals and the second three their respective ISPs.²⁴⁸ This case was noteworthy because the defamation that had occurred on USENET notice boards, for the most part was not hosted by the latter three defendants, they only provided access.²⁴⁹ The judge in the High Court had to consider the operation of the mere conduit and caching defences, and accepted the definition in Gatley that caching is a ‘sort of halfway house between the transmission and “hosting”’.²⁵⁰ The learned judge agreed with the proposition that ISPs that only provided Internet access to individuals that used such access to post defamatory comments on the USENET message board in question, were able to rely on the mere conduit defence. Incidentally, the judge highlighted the difference between the classification of mere conduit and “hosting” by agreeing with Gatley that e-mail provided by an ISP that passes through said ISPs system would fall within the definition of mere conduit, whereas ISPs that operate web based e-mail services such as Googlemail and who thus store said messages on a more permanent basis until they are deleted by relevant users, fall within the category of “hosting”.²⁵¹ The judge struck out the claims against the ISP applicants in accordance with CPR Part 3 and that there was ‘indeed no realistic prospect of

246 Part2,ChapterD(IV).

247 [2006]EWHC407;[2007]1W.L.R.1243.

248 AOL UK Ltd, Tiscali UK Ltd, British Telecommunications Plc (which had carried out some limited posting of USENET newsgroups on its servers).

249 Bunt,(n247),[8].

250 Ibid,[51];Eady J,citing Gatley on Libel and Slander,(10th edn)[6.29].

251 Ibid,[49];Eady J,citing Gatley on Libel and Slander,(10th edn)[6.28],[17.08].

92 success on any of the causes of action’ and held the criteria under CPR Part 24 as fulfilled.²⁵²

Metropolitan International Schools Ltd v Designtechnica Corporation.²⁵³ concerned claims regarding allegations brought by, Metropolitan International Schools, a large European provider of adult distance learning courses against three defendants, the first, Designtechnica, provides “news, professional reviews, and opportunities for public discussion”²⁵⁴ on bulletin boards online, the second and third defendants were Google UK Ltd and Google Inc respectively.

Concerning the mere conduit defence, it will be important to note that Google’s liability for publication of allegedly defamatory “snippets” in its searches was examined. Despite the fact that the judge considered that Google would not be liable for publication and thus the E-Commerce defences would be of no relevance, Eady J noted in obiter that ‘it is unclear whether this protection would extend to a cached index, such as that of the Third Defendant, which is created automatically (by the so called “knowledge bots”) and in relation to the operation of the search engine.’ The judge also noted that in Austria recent amending statutory provisions have extended the protection in Art.12 of the E-Commerce Directive to search engines and that this was referred to in a Department for Trade and Industry consultation document in 2005. As such, it is respectfully submitted that some practitioner commentators were not entirely correct in their submission that Eady J doubted that the defence of mere conduit would extend to a cached index created automatically in relation to the operation of the search engine.²⁵⁵

The E-Commerce Directive and thus the EC Regulations contain two other defences that OSPs may avail themselves of, already alluded to above, namely those relating to “caching” and “hosting”, these will be examined below.

2) The Caching Defence

252Ibid,[77]; CPR Part 3, Case Management Powers, Rule 3.4(2),(strike out-no reasonable gorunds)http://www.justice.gov.uk/civil/procrules_fin/contents/parts/part03.htm#IDAML0E C (30 January 2011), note Part 24 refers to Application for Summary Judgment.

253 Designtechnica,(n241).

254 Ibid,[3,4].

255 Copinger,(n91),[21-107].

93 The first of the two further legs of the E-Commerce Directive /EC Regulations tripod that are of great import for UK OSPs relates to acts by OSPs that can be classified as “caching” as covered by Art.13 E-Commerce Directive; Reg. 18 EC Regulations.

The purpose of the defence of “caching” was admirably defined by Eady J in Bunt v Tilly and is as stated above to protect and facilitate OSPs’ operations.²⁵⁶

Reg.18, states that OSPs that transmit information provided by a recipient of the service are principally exempt from liability for automatic, intermediate and a temporary storage of information for the sole purpose of dealing with a transmission to other recipients upon their request more efficiently.²⁵⁷ There are however certain additional qualifications²⁵⁸ which the OSP must comply with, the most relevant of which, for the purposes of this thesis, are the requirements that the OSPs did not modify the information and that said acted expeditiously to remove or disable access to stored information upon obtaining actual knowledge for example where a court or other authority has ordered such removal or disablement.²⁵⁹

The caching definition is tailored to its “half-way house” purpose and as such does not include the language in the mere conduit defence concerning the initiation of transmissions or selecting the receivers. The inclusion of such would have merged the definition of ‘mere conduit’ with that of ‘caching’.

Reg. 18 closely mirrors Art.14 E-Commerce Directive. As such it will be relevant that Recital 43 reiterates that the defence is available where OSPs are “in no way is involved” with the information transmitted. It is stated, as noted above, that the requirement of non-modification of the information does not include manipulations of a technical nature taking place during the transmission as these do not alter the “integrity” of the actual information comprising the transmission.

Commentators have observed that the most problematic aspect of the caching defence is the requirement concerning knowledge, or the lack thereof, by the OSP, in conjunction with the duty to act expeditiously to remove or disable access to

256 Bunt,(n247),[52].

257 Reg.18(a).

258 Reg.18(b).

259 Reg.18(b)(i) and (iv). On how caching works see Bunt,(n247)[52].

94 stored information. Some commentators have gone so far as to suspect that the UK Government was suffering from confusion between the different types of knowledge required for the caching and hosting defences and to what extent each requires “actual” or “deemed” knowledge, since knowledge of whatever kind of unlawful activity is in fact irrelevant to the purpose of the caching defence.²⁶⁰ The UK Government inserted in Reg. 22, defining ‘notice for the purposes of actual knowledge’. As will be seen in later comparisons to the US, the definition of actual knowledge can be quite pivotal.²⁶¹ The problem that some commentators have identified is that the instant regulation applies to both the caching defence (18(b)(v)) and the hosting defence (19(a)(i)) whilst specifying that in its consideration of whether a OSPs has actual knowledge, the court should take all relevant matters into account, in particular notices received by the OSP through its published details as mandated²⁶² which include details of the a) sender; b) location and c) unlawful nature of the activity or information in question. There would seem to be in a contradiction between what actual knowledge is required for the caching defence and this section, since it seems to imply a broader frame of reference i.e. not just of the issues referred to in the above quote. It is in this regard submitted that Reg.22 was simply subject to a drafting error, since by adopting a purposive approach the interpretation of these two conflicting sections it is plainly obvious that they are aimed at different activities. The opposite view could be taken that Reg.22 could be read as being subject to the three subject-matter categories of actual knowledge in Reg. 18, thereby allowing users or content providers to notify and OSP of a court or administrative order. If this contradiction is not amended, the content providing industry will no doubt wish to argue that Reg.22 provides a legitimate extension, and, expansive derogation from the caching defence.

What this means in practice for OSPs

Leaving the unsatisfactory situation concerning the extent of the actual knowledge requirement aside, the operability of the caching defence is perhaps the least problematic of the tripod of defences in the EC Regulations. Concerning the mere

260 Copinger,(n91),[21-114-115].

261 Part3,ChapterC(VI)(5).

262 Reg.6(1)(c).

95 conduit defence, there are few cases dealing with this subject matter. The consideration of one of the defendants in Bunt v Tilley hosting a USENET message board on its servers, on which posts remained for weeks at a time, including the ability to remove access to posts lead to a determination that this could not be described as caching, since this tended more toward the hosting end of the spectrum. Similarly, the judge in Designtechnica stated that the automatic and informational “snippets” produced by Google in response to searches by users of the search engine concerning relevant web sites, were likely to fall outside the defence, since the provision of such involved a process of selection and editing. It is thus submitted that the courts apply a stringent test to the factor of modification in the caching defence.