EasyInternetcafé settles CD burning action, but Stelios is undeterred

Under the settlement, which also covers cafés outside the UK, easyInternetcafé will pay the BPI £80,000 in damages for copyright infringement plus the BPI's legal costs. The company was given leave to appeal the decision, but decided instead to settle out of court – although statements from each party suggest the deal is far from amicable.

EasyInternetcafé had argued that it was not breaking the law, attempting to rely on a provision of the Copyright, Design and Patents Act of 1988 which allows for recording of material for broadcast at a later date, known as timeshifting, as in the use of a video recorder.

Unabashed at abandoning his appeal and paying the BPI, Stelios said in a statement:

"The BPI originally asked for a million pounds' damages so at least they've settled for a 92% reduction. Every legal case has a settlement value and I have five companies to launch in the next year."

He added:

"What is interesting is that they preferred to settle rather than to test whether they can continue to enforce the prohibition of music downloads. I think this is the warm up lap since I suspect I will be back in court with the same people, the media giants, when easyCinema has to sue the film distributors for basically the same thing, restrictive practices at the expense of the consumer."

But Peter Jamieson, BPI's executive chairman, inevitably put a different spin on the settlement:

"EasyInternetcafé is liable for a clear and profound breach of copyright and I am glad that Stelios has seen sense and agreed to settle this case. The irony should not be lost on anyone that someone who aggressively protects their own intellectual property, as is the case with Stelios and the Easy Group, should seek to offer a commercial music service without paying the creators of the copyright."

In January's summary judgment, the judge dismissed all of easyInternetcafé's defences, including its argument that what it was doing was exempted as timeshifting. The timeshifting exception in the 1988 Act is narrow. It was specifically introduced to allow viewers to record programmes for watching at a more convenient time.

The BPI points out that, in easyInternetcafé's case, this defence was clearly not relevant since it was offering a commercial service. Nor does the exemption cover unlicensed on-line services and CD burning for domestic purposes. It concluded, "the law is clear and there are no loopholes."

As a result of this agreement, the judge's decision will stand.