IP private prosecutions guidance

Posted: 27th January 2014

TVIn a decision of huge significance to Internet providers, broadcasters, publishers and others whose income streams depend on intellectual property rights, the nation’s most senior judge has sanctioned the increasing practice of privately prosecuting pirates to see them punished and stripped of their ill-gotten gains.

Virgin Media Limited, which provides telephone, broadband and television services to homes, enables its prescribers to view premium channels through set top boxes. The company faced a pernicious threat to its business due to the sale of illicit boxes that enabled signals to be unscrambled without the required payment.

The company had, in close co-operation with the Metropolitan Police, launched a private prosecution against those responsible. Police officers obtained warrants and carried out a number of arrests to assist Virgin and two men were sentenced to lengthy terms of imprisonment following their conviction of conspiracy to defraud.

Virgin claimed that the illegal activities had deprived of it of revenue totalling £380 million. It launched confiscation proceedings under the Proceeds of Crime Act 2002 (POCA) against one of those convicted. The man’s benefit from his criminal conduct was assessed by a judge at £11.8 million and he was hit with a confiscation order for more than £8.7 million, representing the entirety of his available assets.

In appealing against that order, the man’s lawyers argued that private prosecutors such as Virgin were simply not entitled to bring confiscation proceedings under POCA. It was submitted that only public prosecutors should be permitted to launch such proceedings and that it was not in the public interest that such draconian powers should be exercisable by bodies that were not fully accountable to the state.

Dismissing the appeal, the Lord Chief Justice of England Wales, Lord Thomas, said that there was nothing within the wording of POCA that precluded a private prosecutor from initiating confiscation proceedings. Parliament had clearly been aware of such a possibility arising and had consciously not sought to preclude private involvement in such proceedings. The Court particularly noted that Virgin would itself reap no benefit from the confiscation proceedings in that any sums recovered would go straight into state coffers.