The location of an online market

In the case of Omnibill (Pty) Limited v EGPSXXX Limited (in liquidation) and Robert Carter [2014] at the UK-based Intellectual Property Enterprise Court (IPEC), which concerned copyright infringement, these issues of jurisdiction were at the core of the matter.

Omnibill, a South African company, provides advertising services in the adult entertainment industry through a website on which escorts promote their services to customers. These advertisements are in the form of profiles containing photographs of escorts as well as literary descriptions of the escorts and their respective services. Accordingly, such profiles are protected as artistic and literary works, respectively, under copyright law.

In 2012, a competitor website EscortGPS.xxx launched and, in an attempt to bolster its advertising attraction, it unlawfully extracted some 1,600 photographs from Omnibill’s website and reproduced them on its own. A website with substantial content, such as 1,600 profiles, will immediately attract potential customers, thereby increasing its daily hit statistics and making the business attractive to potential advertisers to promote their services on the new website.

Omnibill immediately objected to this activity, calling for the removal of the offending photographs, but the operators of the EscortGPS website refused to back down. At the time, the EscortGPS business was being operated by a South African citizen, Wayne van Tonder, and assisted by a private investor, UK citizen Robert Carter.

In response to the cease and desist letter, van Tonder and Carter opened a UK company, EGPSXXX Limited, the first defendant in the case. Carter was the sole director of and shareholder in this company. EGPSXXX Limited then responded to the cease and desist letter, accepting full responsibility for the EscortGPS website.

Accordingly, Omnibill filed copyright infringement proceedings against EGPSXXX Limited, as well as against Carter in his personal capacity, at the IPEC. Shortly after proceedings were initiated, EGPSXXX Limited went into voluntary liquidation.

The copyright infringement was not under dispute, but Carter’s defence was that the UK court did not have jurisdiction over the wrangle because the website did not target the UK market. It was alleged that the escorts exclusively advertised their services to the South African market; that the servers on which the offending photographs were held were never located in the UK (they were located in the US and France); and that van Tonder was solely responsible for making the unlawful reproductions in South Africa.

"The copyright infringement was not under dispute, but Carter’s defence was that the UK court did not have jurisdiction over the wrangle because the website did not target the UK market."

Omnibill responded to this argument on a number of grounds. It argued that a website could typically target multiple territories, and different parts of a website may target different territories.

The court accepted that the EscortGPS website, or at least the relevant part of it (being the South African sub-domain of the website) did in fact target the UK, finding that on inspection of the website traffic data, a significant proportion of the visitors to the website came from the UK.

Furthermore, the terms and conditions of the EscortGPS website provide that the “site is operated from the United Kingdom. The courts of the United Kingdom shall have exclusive jurisdiction over all claims or disputes arising in relation to, out of or in connection with this website and its use and these terms”.

The court further accepted that the website should be seen as a single, global website and cannot be deconstructed into parts, with each targeting individual territories. Therefore, as it was found that at least one part of the EscortGPS website was targeting the UK market, because the website is seen as a global website, it can be said that the website, as a whole, sufficiently targets the UK market.

The court noted that the operators of the EscortGPS website earn revenue by generating traffic to the global site and earn money from advertising. So, in terms of advertising revenue, the entire site benefits from traffic from the UK as much as traffic from South Africa.

It was common ground that mere accessibility on the internet is not enough to show infringement, otherwise every website would be potentially amenable to the jurisdiction of every country in the world. However, the court accepted that a finding that the EscortGPS website is, at least in part, targeted to the UK is consistent with the purpose of that concept in copyright law.

Finding that the website targeted, at least in part, the UK, the court found EGPSXXX Limited (now in liquidation) and Carter (in his personal capacity) liable for copyright infringement.

Andrew Papadopoulos is a director at  DM Kisch. He can be contacted at: andrewp@dmkisch.com