November 2014 brought about a close to a two year and two continent spanning battle involving copyright law.
Both parties provide advertising services in the adult entertainment industry, hosting websites where escorts can advertise their services.
The infringer’s website, xxxx was new to this competitive industry in 2012 and in an attempt to gain a step up, it unlawfully copied some 1600 advertisements from the market leader’s website, sextrader.co.za. xxxx was also unlawfully using Sextrader’s registered trade mark ‘SEXTRADER’ on its website.
Accordingly, a letter of demand was sent to xxxx in June 2012 and at the time xxxx was run by a South African citizen, Mr Wayne van Tonder (who apparently was responsible for all the operations of the xxxx business) and a UK citizen, Mr Robert Carter who claimed to be just a silent investor in the business.
In an attempt to escape liability, xxxx promptly ceased use of the SEXTRADER trade mark and transferred the ownership of the business abroad. Van Tonder and Carter opened a UK limited liability company, xxxx Limited where Carter was the sole director and majority shareholder. The servers of website were apparently being hosted in the US and France and the domain name, for xxxx was held in the US by a Proxy Company in an attempt to hide the identity of the proprietor, which was later disclosed to be Van Tonder.
Although a valiant effort, this convoluted attempt to escape prosecution did not deter Sextrader who were determined to see an end to this unlawful activity. Accordingly, Sextrader instituted proceedings in the UK in 2013 against xxxx Limited, as well as Carter in his personal capacity for infringement of the copyright subsisting in the photographs and the profiles contained in the advertisements.
The photographs were taken, and the profiles were created, in South Africa. Hence, due to an international treaty, the South African Sextrader company could enforce its rights in the UK courts under local copyright laws.
As expected, xxxx Limited subsequently went into liquidation and Carter was left to defend the proceedings himself. Carter’s main defence was that the UK Courts did not have jurisdiction over the matter as the complained about website was directed at the South African market and the servers which hosted the infringing material were held in the US and France. The Court rejected this defence, finding that the website did target the UK market as well as the SA market.
Carter also argued that he should not be personally liable as, firstly, Van Tonder was responsible for the operations of the xxxx business and his participation was limited to an investment of approximately R35,000. Secondly, he was a mere director of xxxx Limited and should not be personally liable for the acts of the company. This too, the court rejected, finding that Carter knew, or ought to have known, what he was getting into when he set up the UK company.
In the result, Sextrader succeeded against Carter (and the liquidated company) on the basis of copyright infringement. Carter disclosed that he had spent more than R630,000 in legal fees before the hearing of the case had even taken place. In finding that Carter was personally liable for copyright infringement, the Court ordered Carter to contribute some R900,000 in legal costs and for Carter to pay damages to Sextrader.co.za.
The damages claim is not yet concluded.
When unlawful activity is conducted through the internet it does make it more difficult to bring infringers to justice as the infringing acts can be spread across numerous territories. However, as shown in this case, it is not impossible for justice to prevail. However, a determined ‘victim’ is the most important component in these types of legal battles. As, whilst copyright law makes justice possible, it is the victim who must chase down the infringer; ultimately making prosecution possible.
Andrew Papadopoulos
23 February 2015