In what is being heralded as a victory for copyright holders, a Swedish district court has found four operators of the file-sharing service The Pirate Bay guilty of aiding and abetting copyright infringement, fined them US$3.6 million, and sentenced each to a year in prison.

The defendants were involved in the operation of The Pirate Bay, reportedly one of the world's largest bittorrent-tracking website. According to the court, users could upload and store torrent files on the Pirate Bay website as well as search the site’s database for torrent files to download. The service also had a tracker function, which allowed users to contact each other to share the recording or work to which the torrent file referred.

The judge found that The Pirate Bay’s server contained torrent files that related to copyright-protected works and that some of its site’s users used The Pirate Bay’s service to unlawfully share these materials. Therefore, the judge concluded that those users had breached the Swedish Copyright Act and were guilty of copyright infringement.

Since the defendants provided a website with advanced search functions, easy uploading and downloading facilities and a tracker feature, the judge determined that The Pirate Bay operation aided and abetted the users’ breach of the Copyright Act. The judge also found that the defendants acted as a "team" in operating The Pirate Bay, they knew that copyright-protected works were available through the site and were shared through the use of The Pirate Bay’s tracker, and they took no steps to remove the files and prevent the infringement. Therefore, the judge concluded that the defendants were guilty of complicity in an offence.

While the judge accepted that the defendants could be regarded as "service providers" under Sweden’s Electronic Commerce and Other Information Society Services Act, he ruled that they did not meet the requirements for the safe harbour exemptions. That Act grants service providers freedom from liability in instances where the provider is not aware of the infringing activity, or expeditiously takes steps to prevent the infringement upon being notified.

According to media reports, the defendants sought a retrial, claiming that the judge was biased against them because he allegedly belonged to several pro-copyright organizations. However, the Svea Court of Appeal rejected this contention and refused a retrial. Since then, a Swedish software company has agreed to purchase The Pirate Bay’s website and intends to introduce new business models that provide compensation for content providers and copyright owners for content downloaded from the site.