Business News Labels & Publishers Legal Top Stories

Ministry puts sue-the-fans litigation on hold

By | Published on Thursday 4 November 2010

Ministry Of Sound has decided to suspend its previously reported sue-the-fans litigation campaign because a delay in the legal process means a substantial amount of the data the company needed to access from BT has now been deleted, and, the label says, because of economies of scale – the legal costs for getting the data that remains are too high.

As previously reported, Ministry announced earlier this year it was breaking rank from the rest of the UK music industry and would sue for damages web-users that had illegally shared music in which the clubbing company’s record label had an interest. Such litigation is usually based on the principle that the vast majority of those targeted will settle out of court, meaning the label can make a profit from damages payments even after the legal men have taken their cut.

Although the sue-the-fans approach was industry standard in the US for years, and became the norm in Germany too, in the UK, while trade body the BPI did sue just over 100 file-sharers back in the day, most label bosses have advocated a three-strikes style system for tackling online piracy, and have invested most of their energies into getting that on the statute book, which they did earlier this year in the Digital Economy Act, though the system is yet to actually go live.

Ministry hired law firm Gallant Macmillan to handle its litigation, with 25,000 BT customers the first to be targeted. Unfortunately the campaign hit a set back in both legal and PR terms when, just days before Ministry’s lawyers were due in court to force BT to hand over the names and addresses of suspected file-sharers, another London legal firm – ACS Law – which has been trying to turn sue-the-fans into a stand-alone business, committed one of the biggest data breaches in data protection history.

While dealing with a Distributed Denial Of Service attack on its website by the pro-file-sharing community, the shambolic ACS accidentally put online the names, addresses and other private information relating to thousands of the suspected file-sharers they had been targeting on behalf of various clients, including content owners from the porn industry.

Using the ACS shambles as ammunition, when Gallant Macmillan faced BT in court, the phone firm asked that the case be adjourned so that it could review the way ISPs provide customer information to content owners pursuing copyright infringement actions, so it could be assured data protection rules would be adhered to. The case was set to continue in January with BT due to propose an alternative process for the ways net firms assist content owners in this kind of action.

But yesterday Ministry announced that it was suspending its litigation, because it had learned that of the 25,000 incidents of file-sharing it had spotted, BT had now deleted records relating to 20,000 of them. BT says that it is standard practice to delete such records after 90 days for privacy and data protection reasons. This means that even if the phone company was forced to hand over the names and addresses of the suspected file-sharers Ministry had identified, it could only do so for 5000. This, Ministry say, isn’t cost efficient.

In a statement, Ministry Of Sound CEO Lohan Presencer told reporters: “Whilst Ministry of Sound were happy to incur substantial legal costs to access 25,000 names, it is simply not economic to pursue the 5000 remaining illegal uploaders. It is very disappointing that BT decided not to preserve the identities of the illegal uploaders. Given that less than 20% of the names remain, and BT costs have soared from a few thousand pounds to several hundred thousand pounds, it makes no economic sense to continue with this application”.

But Presencer insisted that, despite the setback, his company remained committed to targeting file-sharers with copyright infringement litigation, adding: “We are more determined than ever to go after internet users who illegally upload our copyrighted material. We will be making further applications for information from all ISPs. Every time that a track or album is uploaded to the web it is depriving artists of royalties and reducing the money which we can invest in new British talent”.

Speaking to TorrentFreak, a BT spokesman said that the 90 day record deletion process was standard, and that Ministry’s lawyers knew about this process. In a later statement the spokesman also mused that the company was disappointed that – with the Ministry litigation now cancelled – it wouldn’t have the chance to present to court their proposals for how ISPs should work with content owners when it comes to revealing the identities of suspected file-sharers.

Mr BT: “The Ministry of Sound’s decision is clearly a matter for them. It’s a shame though that, in this instance, our concerns over the current process will not be examined by the court. However, it remains our intention to ensure our broadband customers are adequately protected so that rights holders can pursue their claims for copyright infringement without causing unnecessary worry to innocent people. BT therefore intends to write to ACS:Law and Gallant MacMillan seeking their agreement to a revised approach to previously granted orders before disclosing any further customer details”.