Stockholm District Court Case

B 13301-06

As has been extensively reported, four representatives of ‘Pirate Bay’, a Swedish file sharing site (reports vary as to where it is actually based), were found guilty of contributory copyright infringement on 17 April 2009 by the Stockholm District Court. The claimants in the case were a group of 15 entertainment companies including Sony Music Entertainment, EMI and Universal Music. The case against Pirate Bay has attracted widespread attention because it is one of the world’s largest file sharing sites, boasting some 3.6 million registered users sharing hundreds of thousands of files. The site has long defied attempts to restrict its making available of copyright protected works, often posting received cease-anddesist letters on the site along with their less than respectful responses. More importantly, the technology used by the Pirate Bay site meant that the Court had to consider complicated issues arising under copyright law and penal law.

The representatives of Pirate Bay were not accused of having infringed copyright directly but of furthering copyright infringements by others. Therefore, the Court first had to consider whether the acts committed by others were illegal. If not, the defendants could not have been found guilty since no primary illegal act would exist to “further”. The Court concluded that the primary actions of those individuals who share their files through use of the BitTorrent program should be classified as “communication to the public” under the Swedish Copyright Act. Communication to the public is one of the exclusive rights granted to copyright owners and therefore their consent is required for any such communication. Since such consent was absent in the present case, the Court concluded that there existed primary illegal acts and therefore the defendants were capable of secondary copyright infringement by “furthering” those acts.

The Defence submitted that use of the BitTorrent file sharing program meant that no illegal act took place as no copyright infringing material is actually stored on Pirate Bay’s servers - the Pirate Bay’s site merely provides a platform and software which enables individual users to share files. The Defence also argued that they had been unaware of the existence of “trackers” (links) on the site to the 33 files that formed the subject of the case. However, the Court held that the consistent lack of concern for copyright protection that was demonstrated by the defendants was so reckless as to fulfil the criterion of intent to further the primary infringement.

The Court found the defendants criminally liable for acts which infringed the Swedish Copyright Act. It then had to address the issue of whether the defendants could benefit from protection from liability conferred on service providers by the E-Commerce Directive (2000/31/EC) and its implementation in Swedish law.

The Court held that Pirate Bay did amount to a “service provider” within the meaning of the E-Commerce Directive. However it held that Pirate Bay was not a “mere conduit” (within the meaning of Article 12) and the service being provided was not “caching” (within the meaning of Article 13). Despite falling outside of both Articles 12 and 13, the hosting provision within Article 14 had to be considered by the Court as it can still apply in such circumstances. Article 14 provides a hosting defence which requires that the service provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent, or, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information. The Court held that the defendants, despite the fact that the use of BitTorrent program meant that no copyright materials were actually stored on Pirate Bay’s website, were not entitled to benefit from the Article 14 defence because they were aware that copyright works were being shared between users through use of Pirate Bay’s platform and software. They also completely failed to take any action in relation to the infringements known to them. The defendants asked for a referral to be made to the European Court of Justice (ECJ) concerning whether they should be entitled to benefit from the Article 14 service provider defence. However, the Court ruled there was no need to refer to the ECJ the question of service provider protection from liability as the legislation was sufficiently clear.

The Court found the four men guilty of secondary copyright infringement and they were each sentenced to a year in prison (although they have not yet been remanded in custody due to their appeal which is currently pending). They were also found jointly liable for damages in the concurrent civil case to an amount of approximately SEK 30 million (approximately €2.7 million) and will have to pay the claimants’ legal costs as awarded by the Court at approximately SEK 3 million (approximately €270,000). The claimants had sought a much more substantial sum but the Court applied conservative methods in calculating damages.

The convicted men appealed to the Svea Court of Appeals and also entered a claim that a mistrial should be declared and the matter referred back to the District Court. The mistrial claim was raised when it transpired that the trial judge, as well as several of the claimants’ lawyers, were active members of both the Swedish Association of Copyright and the Swedish Association for Protection of Industrial Property. The Defence alleged that these affiliations constituted a conflict of interest. The mistrial claim was dismissed by the Court of Appeal on 25 June 2009 – it was decided that membership of the copyright associations is a valid method of gaining knowledge of the topic and does not constitute bias, and therefore no mistrial would be declared. The main appeal case is still pending.

The initial verdict of the Court in the Pirate Bay trial answers the much debated question as to whether use of the BitTorrent protocol, characterised by its peer-to-peer piecemeal transfers, should actually be deemed to constitute an infringement of copyright at all and in the future the decision may come to be seen as “the end of the beginning” of the battles against internet piracy.

Currently, the judgment appears to have had little effect on Pirate Bay’s web site - the site continues to operate and its blog urges readers to keep sharing files. Nordic telecom operators have so far refused to block access to the Pirate Bay site following the judgment on the basis that the matter is under appeal. However, as regards the effect of the judgment internationally, it is reported that BT and other UK mobile broadband providers now deny users access to the site “in compliance with a new UK voluntary code”, and Eircom, the major Irish telecom operator, indicated in February 2009 that it was ready to begin blocking sites such as Pirate Bay.

This article has been adapted from an article that was first published in the World Media Law Report, April 2009.