Sky Network Television Ltd v Pullan [2018] NZDC 12918

Published 25 March 2019

Reserved Judgment — misleading representations — Kodi software application — Fair Trading Act 1986, ss 9 & 41 — Copyright Act 1994, ss 16, 29 & 33 — Stichting Brein v Willems (2017) 127 IPR 302. The plaintiff sought a declaration and injunction against the defendants for alleged misleading representations about the legality of the media players sold by the defendants, breaching the Fair Trading Act. The plaintiffs supplied television services to subscribers throughout New Zealand and held the relevant rights in New Zealand to copy and communicate to the public various Copyright Works. The first defendant was the registrant of the Fibre TV NZ website and was an administrator of the “Fibre TV Support” Facebook page. The defendants were in the business of selling media players for a profit and their business model necessarily involved representations that their media players could be lawfully used to stream copyright content without the consent of the Copyright Holder, allegedly in breach of the plaintiff’s (and others) rights as copyright licencees. The defendants charged a premium for their media players, which were pre-loaded with software add-ons that enabled access to websites streaming copyrighted works. The media player functionality included a search function, an indexing system and a user-friendly facility for streaming material found by the software application from the player to a television. The defendants’ service includes providing links to new material found. The Judge considered the the relevant provisions of the Copyright Act, ss 16, 29 and 33, which lay out the acts restricted by copyright, the infringements of copyright, and the infringements by communicating to the public, respectively. The Judge found the defendants were in breach of those provisions by communicating the copyrighted works to the public by selling media players for the purpose of streaming copyrighted content, copying copyright works by enabling users of the media players to stream video data over the internet and to view it on televisions without the authorisation of the copyright owner, and authorising purchasers to use media players for the purpose of streaming copyrighted content. The Judge then assessed whether the defendants had liability under s 9 of the Fair Trading Act, which deals with misleading and deceptive conduct. The defence argued that while s 9 of the Fair Trading Act applied to the defendants as the vendors, they had a defence that the representations made were not misleading or deceptive. However, the Judge held the defendants did engage in conduct that is misleading and deceptive by breaching the plaintiff's copyright and by representing to purchasers that streaming copyrighted content on their media players did not infringe the plaintiff’s copyright when that was not true. The Judge did not decide on whether the defendants had engaged in conduct that was misleading and deceptive or likely to mislead or deceive by procuring infringements of copyright. The Judge was not persuaded by the defendants' argument that they have nothing to do with the actual breaches of copyright by their users, as it was contrary to the evidence of their own marketing. The Judge also found the first and second defendants status as partners in the business sufficient to make them both jointly and severally liable. The Judge ordered an injunction against the first and second defendants, and inquiry as to damages and costs to be awarded. Judgment Date: 3 July 2018.