Pacnet's Win, Odex's Loss: The Grounds, the Future.

Since many blogs and online articles have already posted the different grounds for District Judge Earnest Lau's judgement in the Odex vs Pacnet case, I'll just focus more on the more interesting areas and the potential future impact it might have. You can read a short summary of the Judge's decision in the Today online article. As of today, there does not appear to be a publicly available copy of the 14 page Judgement and it certainly still isn't up on lawnet yet. NMP Siew Kum Hong's blog contains the written oral judgement of District Judge Earnest Lau's decision, you may find it here. Based on this, these points are the more interesting ones.

Grounds of the decision & other interesting points:

1. Odex is only the sub-licensee and not the exclusive licensee. It only appears to be the exclusive licensee for one title, that of mobile suit gundam seed. The Copyright Act only allows either the Copyright owner or the exclusive licensee the right to commence a civil action against the copyright infringement.

2. Odex was not directly authorised by the Japanese animation companies to go after the illegal downloaders. The party they authorized was AVPAS.

3. Standard for releasing subscribers' information was pegged to that for a civil application for an Anton Piller order which requires stringent criteria to be fulfilled and a strong prima facie case against the defendants. In this case, the Judge felt that Odex could not prove that it had 'an extremely strong prima facie case against the wrongdoers'. This standard is thus pegged very high.

4. Evidence filed by Odex was found lacking. There was no concrete proof that Odex had hired BayTSP and there was no evidence from BayTSP in support of Odex's claims. Taking information off the website and submitting it is insufficient in a court of law.

5. Dicta (not a ground of judgement): The Judge noted that while Starhub, at least, had contested Odex's application to compel them to release customer information, Singnet failed to engage lawyers to resist Odex's application and had consented to releasing customer information without a fight.

What this means & the potential impact(points addressed in the order they were raised):

1. The previous legal analysis in Odexed? 8 Things you should Know was based on the premise that Odex was the exclusive licensee for all of its titles which it licensed and that analysis would remain correct if that was indeed the case. However if the finding of fact by District Judge Earnest Lau is not overturned on appeal (as findings of facts seldom are), it would appear that Odex is only a sub-licensee and on the face value of the Copyright Act would not have the right to commence a civil action for copyright infringement.

2. Well this does clarify things further. We get a glimpse of the three tiered structure, Jap animation companies authorize AVPAS, AVPAS authorizes Odex (with or without the active knowledge of the Jap Companies), Odex commences the operation. This does appear to reinforce the notion that Odex was in fact not directly authorized by the copyright owners, the jap companies themselves. Though it would appear from the tenor of the Judge's decision that even if Odex was directly authorized, that would be insufficient as he is of the opinion that only the Copyright owner and exclusive licensee can commence a civil action.

3. This is certainly an important substantive legal point that will need to be determined on appeal by the High Court. First, is the standard for compelling a company to release customers' private information pursuant to alleged copyright infringement pegged to the very high standard required for a civil Anton Piller order? Second, if not what should the standard be and the necessary factors involved in determining whether such a standard is satisfied. As expected, Odex will be appealing against the Pacnet decision and the outcome of the appeal in the High Court will be eagerly awaited.
   It remains to be seen if the appeal will end at the High Court level whichever way it goes, though if the appeal fails at the High Court for Odex, they will almost certainly need to appeal to the Court of Appeal. The decision of which would be binding and would set a precedent for future cases. After all, Odex has everything to lose if it fails to appeal. On a side note, it is highly unlikely that Odex will continue sending out the settlement letters for now, at least until their appeal succeeds because their legitimacy and authority to commence any civil action to protect against copyright infringement have been severely undermined by the grounds given in the Pacnet judgement.

4. This is pretty much an evidentiary issue which could be easily corrected if Odex has indeed really hired BayTSP. Though it does portray Odex as not having all the requisite evidence at hand. This issue is a lot less important than their lack of authority and failing to satisfy the high standard required that were raised earlier. Remedying an evidentiary issue would be of no use if there is a fundamental error with regards to a substantive point of law (that of their authority, lack of locus standi, etc.)

5. The Singnet issue is of course a sticking point. I believe someone made a comment in the previous post that Pacnet shouldn't have contested the Odex court application since the downloaders were infringing copyrights. Let me clarify something, Privacy is certainly NOT a defence to copyright infringement or any kind of offence for that matter. However, it would be equally wrong to state that because Pacnet contested the order out of concern for their customers' privacy this means that they support copyright infringement.
   That is an erroneous logical deduction. Companies have an obligation to protect their customer's confidential information and privacy and should actively do so. The aggrieved party/plaintiff alleging wrongdoing on the part of the Company's customers is entitled to go to court and compel the company to release private information if it can show on the balance of probabilities that it has a good case and has the necessary evidence to back up its claims. A court order will then be obtained.
   

Giving in or not even attempting to contest the plaintiff's application for a court order to compel the company to reveal customer's private information is a dereliction of that obligation and shows that the concept of 'Valuing our Customers' Privacy' is unimportant and only given lip service. By failing to discharge its obligation to its customers to protect their privacy within reasonable limits and be seen to do so, a company loses credibility with its customers who will be understandably unhappy.

And when that happens, the company loses their business. For good.

Update: Singnet's Response: We didn't 'consent'! Ya right....