ACS:Law's Notices of Discontinuance Ruled An Abuse Of Process

Matt Lonsdale is a JD candidate at Dalhousie University.

In the recent British case of Media CAT Ltd v Adams & Ors, significant media attention created a public relations nightmare for the copyright holders who want to enforce their rights but do not wish to be perceived as bullies picking on sympathetic defendants.  Ultimately, the court weighed in on the matter.

The claimant Media Cat contracted with various rights holders to obtain “all rights necessary to allow Media CAT to inquire, claim, demand and prosecute through the civil courts where necessary any person or persons identified as having made available for download” the works of the rights holders. They hired an unaffiliated company to monitor file sharing networks and identify instances of the unauthorized distribution of these works, and applied for the necessary court orders to obtain the personal information of the users from the ISPs involved. They then wrote letters to tens of thousands of individuals, threatening litigation if their demand for 495 pounds was not met.

By November 2010 Media CAT had initiated 27 lawsuits for copyright infringement. As the cases were almost identical, the court on it’s own motion convened them to be heard at a single hearing. A few days prior to the hearing, ACS:Law filed notices of discontinuance in all 27 cases. They cited a desire to amend their claims, as well as harassment resulting from the media attention the case had received as their reasons for doing so.

This brought up the question of whether Media CAT could unilaterally discontinue the cases. Media CAT’s relationship with the rights holders was a unique one which had not been previously tested before the courts. They had not purchased the rights to any works, but only the bare right to bring legal action on behalf of the rights holders. Relying on section 102(1) of the Copyright, Designs and Patents Act and Civil Procedure Rule 19.3(1), counsel for the defendants argued that the case could not proceed unless Media CAT obtained leave of the court or joined the rights holders as parties.

While ACS:Law argued that discontinuance was the opposite of proceeding with an action, Judge Birss was not convinced. “In my judgment the court’s permission is required for a licensee to take a step in the case and in my judgment a notice of discontinuance is such a step”. The judge held that to allow the cases to be discontinued would grant “unwarranted collateral advantage” to Media CAT and ACS:Law.

Firstly, as the copyright holders were not parties in the cases, a discontinuance would not prevent them from reissuing similar claims against the same individuals at a later date. Parties to the case would require the permission of the court to reissue the claims. Secondly, it would allow Media CAT and ACS:Law to avoid judicial scrutiny. Judge Birss was critical of a number of aspects of the way the case was being handled, including (but not limited to) ACS:Law’s failure to submit relevant documents, the slow pace at which the claims were being pursued and the use of inappropriate court procedures to seek default judgements.

Consequently, the notices to discontinue were set aside as an abuse of process. Following the hearing, ACS:Law submitted to the court a letter indicating that they would not be pursuing any further legal action in regards to the allegations of copyright infringement. They would no longer be representing Media CAT, or indeed anyone else, as they would be closing permanently. The letter also stated that Media CAT themselves had become insolvent.

For copyright holders, pursuing legal action against users of Internet file-sharing networks sharing unauthorized copies of their works can be a difficult task. There are a variety of evidentiary issues which must be dealt with before they can even work out who it is they are trying to bring legal action against. These and other considerations came to a head in this case and the court indicated that potential plaintiffs have to tread carefully.