Internet cafe chain plans appeal copyright ruling against allowing customers to copy music

Wednesday, January 29th 2003, 12:00 am

By: News On 6

LONDON (AP) _ An Internet cafe chain that allowed customers to copy music from the Internet onto compact disks said Wednesday it would fight a ruling that declared its activities copyright infringement.

Greek entrepreneur Stelio Haji-Ioannou said the court decision against his easyInternetcafe chain failed to consider that recordings for private and domestic use were exempt from Britain's 1988 Copyright, Designs and Patents Act.

``Consumers were recording music in our Internet cafes in order to consume it at a more convenient time, just as they do with video cassette recorders,'' Haji-Ioannou said.

The company had argued that employees were prohibited from looking at the contents of downloaded files and that customers were warned when they logged on about copyright infringement. Any infringement, the company said, was therefore committed by customers.

But High Court justice Peter Smith rejected those arguments Tuesday and ordered an inquiry into damages due to the music companies as well as an account of illegal profits made by easyInternetcafe.

Haji-Ioannou said he would appeal all the way to the House of Lords, Britain's highest court of appeal, if necessary.

The British Phonographic Industry, a trade group representing heavyweights like Sony, EMI, Universal and BMG, filed copyright-infringement charges against easyInternetcafe last year. EasyInternetcafe had stopped offering the service, for which it charged $8 per compact disk, in September 2001.

Sarah Roberts, a spokeswoman for BTI, said the organization had initiated similar cases against other companies, but they were all settled. Details of those cases were confidential, she said.

Haji-Ioannou refused to settle quietly and said BPI initially had demanded compensation of $1.6 million, later reduced to $610,000 and then $160,000.

Music executives say the increasing popularity of copying, or ``burning,'' CDs has weakened global music sales.

Charlotte McConnell, a lawyer at the Bristows law firm in London, said the case represents the latest effort by courts to ``find a commercial entity to blame.''

``As with the Napster litigation in the U.S., in this case, the primary infringers are the individuals downloading the music But individuals are difficult to catch, and are generally not worth pursuing commercially,'' McConnell said. ``By going after the organizations that facilitate the infringement, the music industry gets its point across.''

Music industry officials welcomed the ruling.

``Illegal copying jeopardizes the livelihoods of artists and songwriters, as well as putting at risk the thousands of jobs directly and indirectly created by the recording and publishing of music,'' said BPI chairman Peter Jamieson.

After an inquiry last year, the trade group said popular music tracks from such artists as Jennifer Lopez had been copied onto hard drives at easyInternetcafe stores in Britain. The company also operates cafes in Germany, the Netherlands, France, Spain, the United States and Italy.

Haji-Ioannou controls and operates easyGroup, an investment company built on the success of his low-cost airline, easyJet.