The Swedish Supreme Court has in a recent ruling (T 6015-11) decided on how the amount that constitutes reasonable compensation, shall be calculated according to the Swedish Act on Prohibition of Certain Kinds of Decoder Equipment (2000:171; the “Act”).
The circumstances in the case were that two persons, unauthorized, had made encoded TV broadcasts available to others (so called card sharing). For this reason, they were charged and convicted of crimes against the Act. The companies which held the rights in the TV broadcasts requested compensation for the unauthorized use of their services. Therefore, the main issue in the case was how the amount that constitutes reasonable compensation shall be calculated according to the Act.
The Supreme Court concluded that the assessment of what constitutes reasonable compensation shall be based on the fee that would have been paid if an agreement had been signed between the service provider and the persons for whom the services were made available by the card sharing. The fact how often the services had actually been used was considered irrelevant, i.e., it did not matter how many broadcasts had been watched. Instead, what is crucial, is that the services were made available for the persons and were used to some extent. Furthermore, the Supreme Court stated that the calculation shall be based on a time period during which the wrongful use in fact took place, meaning at the longest until the last day the service was available. The service provider’s argument that since it only accepted agreements of minimum two years, the compensation should be based on the cost of such agreements, even though the actual card sharing was limited to a shorter time period, was not accepted by the Supreme Court. In practice, this alignment by the Supreme Court on the calculation of reasonable compensation may be of relevance also in cases concerning calculation of compensation due to intellectual property infringements.