Higgs v R

On 19^th October 2007 Neil Stanley Higgs was convicted in the Bristol Crown Court of 26 offences contrary to s.296ZB of the Copyright, Designs and Patents Act 1988 (“the Act”). He appealed against his conviction with the leave of the trial judge, HHJ Hagen. Following the oral hearing we informed the parties that the appeal would be allowed. These are our reasons for that decision.

Mr Higgs ran a business called “Mr Modchips” selling what are known as “modchips”, fitting modchips to customers’ computer games consoles, and selling games consoles to which he had already fitted modchips.

There are a number of manufacturers of computer games consoles. Sony’s is called a Playstation, Microsoft’s is an X-Box and Nintendo’s is a Gamecube. The computer games themselves are supplied separately on CD-ROMs. The user places this in the machine and the game can be played.

The games consoles contain embedded codes and normally will only allow a game to be played if the CD-ROM contains a corresponding code. The codes on the CD-ROM are not copiable, at least for practical purposes. A principal effect of these measures is to prevent the playing of “pirate” games, that is to say games which have been copied without the permission of the owner or owners of any copyright material contained in the games, including copyright in images, sounds and so on.

Fitting a console with a modchip overcomes these measures. The machine will then allow CD-ROMs which do not have the appropriate code to be played.

Section 296ZB, headed “Devices and services designed to circumvent technological measures” reads so far as is material as follows:

“Effective technological measures” (“ETM”) is defined by s.296ZF which so far as relevant provides:

The prosecution contended that Mr Higgs was providing devices which enabled the circumvention of ETMs. But it is very important to understand the factual basis of the contention. It was not that the use of a modified console to play a game from an infringing CD-ROM itself involved any infringement of copyright. No attempt was made to prove that when such a CD-ROM is placed in a console, the console reads into its memory (particularly its random access memory, its “RAM”) the program and copyright material included with it such as images and sound.

If such had been contended and proved (as it would seem very probable it could have been), it is difficult to see what defence there might have been. After all s.17 of the Act provides:

So much was indeed held to be so in the civil case of Sony v Ball [2004] EWHC 1738, [2005] FSR 9. Laddie J held, on an application for summary judgment, on facts near identical to those in this case, that there was infringement of the civil provisions corresponding to those in question here. The only factual difference is that, unlike this case, before Laddie J it was asserted that transient copying into the console took place – and the defendant so admitted.

But the case as advanced against Mr Higgs was not and is not put on that basis. The case before the jury was not that just playing a pirate CD-ROM involved any infringement. It is true, as Mr Iain MacDonald for the Crown indicated, that there was some evidence given from which it might be inferred that material was copied into the console, but the prosecution did not put its case to the jury on that basis. Besides, the suggested inference from the evidence is not itself clearly inevitable. Mr MacDonald wisely and fairly did not seek to uphold the convictions on that basis.

His point before us, and the point run at trial, was essentially this: that by selling modchips and modified consoles, Mr Higgs was in effect encouraging and exploiting a market for pirate games. No one would make or sell them unless they could be played. Mr Higgs was enabling that, so creating an incentive for the pirate market.

That, Mr MacDonald submitted, was enough to satisfy the definition of an ETM. The measures concerned must be “designed .. to protect a copyright work” (s.296ZF (1)). “Protection of a copyright” work means the prevention or restriction of acts “that are not authorised by the copyright owner of that mark and are restricted by copyright” (in short infringement). So the measures concerned will have the practical effect of preventing or restricting infringement. That, he submitted, is enough to fall within the definition.

If he were right, then the Judge was correct to reject the appellant’s submission at the end of the prosecution case that there was no case to answer and the convictions should stand. But we do not think that is the correct construction of the provision. We say that essentially for the same reasons as the High Court of Australia gave in Stevens v Sony [2005] HCA 58, 21 ALR 447.

Stevens was a civil action under the Australian provisions corresponding to those in the UK about circumvention measures. The case turned on whether modchips were a “technological protection measure” within the meaning of the Australian Act. The definition of this phrase read as follows:

No case about transient storage could be directly advanced because the Australian Act did then not have a provision corresponding to s.17(6) of the UK Act about transient storage. We understand it does now. A more elaborate attempt to run an argument that such storage was an infringement by reason of its being a reproduction in a material form failed and we are not concerned with that.

So the main point before the High Court was whether the measures which the modchips were designed to circumvent were a device etc. .. “designed …. to prevent or inhibit” infringement. The same argument was advanced as here – that modchips opened the market to infringing product and so they circumvented ETMs which prevented or restricted infringement. The argument was rejected by the High Court.

Gleeson CJ, Gummow, Hayne and Heydon JJ said:

McHugh J said:

Kirby J held that the phrase being construed was ambiguous and preferred the narrow view for a number of reasons. These included the fact that the legislation was potentially penal, that the word “inhibit” covers the case where the measure would only be partially successful, that the Australian Parliament had foreign legislation to draw upon if it had wanted a wider definition, and that what was to be inhibited was not use but infringement.

We think that the same reasoning applies to the construction of ETM in the UK Act. We turn to consider the points in more detail

First, the slight difference in the key wording between the Australian and the UK legislation is no more than a distinction without a difference. We juxtapose each to highlight the difference:

Next Mr MacDonald pointed out that Kirby J at least thought the UK legislation was wider in effect than the Australian Act. He said:

We think this makes too much of this passing reference which in no way was essential to Kirby J’s reasoning.

Mr MacDonald then went to what at first sight might be a more formidable objection, that the sources of the two pieces of legislation are different. The UK legislation was by way of an amendment of the Act made to implement an EU Directive, 2001/29/EC on the “Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society.” Accordingly it should be interpreted in the light of that Directive, rather than by what an Australian Court held Australian legislation to mean.

Both sets of legislation owe their ultimate inspiration to two international conventions of the mid-1990s but the conventions are expressed at a fairly high level of generality and the detailed wording in the Australian Act and the EU Directive is not taken from either of these conventions. This can be seen from their provisions:

Neither Treaty contains a definition of “effective technological measures”. One can at least see where the phrase comes from. It is an odd phrase to use in English – in its context it clearly refers to something which is intended to have an effect rather than something which is invariably successful. If it meant the latter, then there would be no need to have a law preventing circumvention. Probably something was lost in translation. Fortunately the context makes the meaning clear.

The trouble with Mr MacDonald’s point is the reasons for the Australian decision apply equally here. So although there are minor differences in language, the logic of the Australian decision applies as much to the construction of the UK Act. One is not using the Australian decision as anything other than as a source of reasoning.

Next we note there is no “purposive” need for a wide construction. On the contrary the narrow construction is enough to cover what Mr Higgs did, if it had been proved that transient copies of copyright works were made in the consoles.

Mr MacDonald then advanced an argument based on the Directive. The relevant language – which is an important aid to construction – is this:

Mr MacDonald pointed out that the language of the Directive is not quite the same as that of the section (Why, oh why do statutory draftsman persist in trying to gloss Directives which are specific about what is to be implemented? See Century Life v Commissioners of Customs and Excise [2001] S.T.C. 38). Juxtaposing the two:

Mr MacDonald suggested that one should really disregard these words because they are not in the Directive and that if one did, one would reach a wider meaning. The trouble with his argument is that that the words add nothing. When speaking of “acts which are not authorised” it is implicit that one is considering only acts which need authorisisation, i.e. acts which are otherwise restricted. To “authorise” a man to do something he is free to do anyway – something which needs no authority - is a meaningless concept. So we think the UK draftsman was merely making explicit that which was implicit in the Directive – and indeed in the original 1966 Treaty obligations.

Mr MacDonald also tried to get something from the travaux préparatoires to the Directive. In particular the Preparatory Text (EU: COM(1999) 250) used slightly different language for the definition of technological measures:

Mr MacDonald suggested one should infer an intention to widen the meaning. He could point to no material so saying, and we do not think the change amounts to anything other than a drafting change – there is no “bull-eye” in the sense used by Lord Steyn in Effort Shipping. v Linden Management [1998] AC 605 at 623E-F:

In the end, therefore, one comes back to the UK Act. Is it enough if the technological measure is a discouragement or general commercial hindrance to copyright infringement or must it be a measure which physically prevents it? To our minds the position is clear – it is the latter. Neither the Directive nor the Act would have been drafted in the way that they are if such a general form of hindrance was enough.

It is for those reasons we quashed the convictions. Mr Higgs is a fortunate man in that it may well be that if the legislation had been less complex and/or the Crown had had greater opportunity to consider the details of copyright law the case would have been proved on the basis that merely playing a pirated game involves making a copy in the console and thus involves infringement. He may also be fortunate that, at least this far, he has not been sued in the civil courts. There the procedure is apt to be much faster, technical slip-ups in evidence can generally be readily cured before final judgment and the remedies of damages, an account of profits, injunction and legal costs are readily obtainable. Breach of an injunction, if serious, can of course itself lead to imprisonment.

We were asked to certify that this case involves a question of law of general public importance. We are willing so to do. The question (agreed by Counsel) which we certify is:

We were also asked for leave to appeal to the House of Lords. This we refused, not least because it appears to us that the correct construction of the Act does not preclude the prosecution of manufacturers or distributors of modchips if evidence of copying in the process of playing is adduced.