COPYRIGHT
ARTICLE  
By Tim O’Shea, Solicitor, Michael Simkins LLP  

Last week’s conviction of the four men behind rogue BitTorrent tracker The Pirate Bay has been widely applauded by the music and film industries. The Stockholm District Court convicted the defendants of aiding and abetting breaches of copyright by facilitating the making available of copyrighted material via The Pirate Bay service. The defendants were sentenced to one year in prison and ordered to pay SEK30million (£2.5million) in compensation to various rightsholder groups.

The trial
The Pirate Bay site enables internet users to find and exchange files. Its user-friendly interface and search function enables other users to search for specific content or to browse organised lists of music tracks, films, games and other content. It also provides a number of related “trackers” that assist users in connecting to listed content and downloading it. The case was a criminal prosecution. Initially the defendants were charged with direct infringement (in addition to the charges of aiding and abetting for which they were convicted). An early coup for the defendants came when the charges relating to direct infringement were dropped by the prosecution shortly after the trial began. The individuals based their defence on the following basic propositions: the site did not host any infringing content; the service had legitimate uses; the defendants were unaware of the availability of links to the specific works referred to in the charges; the division of roles between the defendants was such that no one individual could be held responsible for the whole site; and the defendants were unaware that the search facility was used primarily for accessing infringing content (perhaps the least convincing of the arguments, given the service’s name).

The judgment
The court based the convictions on the following findings. It held that the users of The Pirate Bay had committed crimes by making available copyrighted works, and even where those users were located outside Sweden, for the purposes of aiding and abetting convictions under Swedish law, those crimes could be deemed to have taken place in Sweden. The court went on to state that The Pirate Bay’s actions had a more extensive effect than the primary infringement committed by the individual users making the works available in the first place.

The judgment emphasised that the service was under constant development and regularly updated to make it more efficient to access and transfer material. It was not necessary for the operators to have known about the availability of links to the specific works in the charges – it was sufficient for them to have intended that copyright protected material would be available on the service. In not taking any action to prevent infringement, the defendants were held to have deliberately participated in the individual users’ crimes. It was also emphasised that the site was a commercial operation financed by advertising. Significantly, the court found persuasive the evidence presented by the prosecution to show the individuals involved in the service conducted an operation designed to generate substantial revenues for themselves. The submissions in this connection included evidence of advertising revenue, a signed agreed between the defendants concerning sharing the proceeds of advertising revenue, and the establishment of offshore bank accounts.

The individuals have indicated that they intend to appeal the conviction and any sentence will not take effect until any such appeal is heard. In the meantime, since the case was a criminal prosecution, the convictions themselves do not end the operation of the service and a series of further legal steps are understood to be underway in both Sweden and across the world to protect rightsholders from the continued operation of the service.

Significance
For the creative industries, the significance of the trial lies in the size of The Pirate Bay’s operation. It is believed to be the world’s biggest BitTorrent tracker and is available in 34 languages. In February 2009, the site reportedly had 22 million simultaneous users, and one of the defendants said in an interview in July 2007 that 50 per cent of all torrents on the internet used The Pirate Bay trackers. In April 2009, the service displayed around 1.6 million torrent files linking to films, music tracks and other media. In terms of its legal significance, more will be clear when an English translation of the judgment becomes available. It should however be noted that this was a criminal case brought under Swedish criminal law and will have no direct application beyond Sweden. However, courts elsewhere in the world have recognised the illegality of The Pirate Bay. In November 2008 a Danish court ordered an internet service provider to block access to the site. A judgment against the service has also been secured in Italy. Nor is this the first successful case against a BitTorrent Tracker service and its uses – see the Finnreactor case in Finland. The findings of the Swedish court may be seen as a continuation in a line of earlier cases involving principles of copyright law similar to the Swedish concept of the facilitation of copyright infringement. Under UK copyright law, the comparable principle is that of authorising infringement. In the US, it is inducement and contributory or vicarious copyright infringement.

Previous high profile cases concerning the authorisation of infringement in the online world have been directed against the creators and operators of peer-to-peer file sharing networks, including Napster (2002) and Grokster (2005) in the US, Kazaa in Australia (2005) and Soribada in Korea (2007). These recent cases compare with those from the pre-digital age, where the issues concerning authorising infringement (or its US equivalents) were considered in relation to the now seemingly prehistoric technologies of VCRs (Sony v Universal City Studios [US, 1984]) and tape to tape cassette recorders (CBS v Amstrad [UK, 1988]).

One on level, the trial demonstrates the importance of the concept of authorising infringement and the role this principle of copyright law (and its equivalents in jurisdictions around the world) has to play in helping the content industries protect their rights in the online world. The convictions have reinforced the already established position that providers of technology that primarily aids infringement of copyright material can be liable for authorising infringement. On another level, and given the nature of the BitTorrent Tracker services offered by The Pirate Bay, some commentators have questioned whether the judgment might potentially extend the concept of authorising infringement to online search engines, such as Google. From the line of cases referred to above, of which The Pirate Bay may be viewed as the latest addition, the issue of liability for authorising infringement seems to turn on a number of factors. These factors include the existence of commercially significant non-infringing uses of the technology in question (Sony v Universal City Studios), the extent to which the creators/operators of the technology are able to assert control over the uses (CBS v Amstrad), whether the creators/operators have any continuing interest in their customers’ use of the product or technology (CBS v Amstrad), whether there is a clear intent to induce infringement (Grokster), and whether any attempt has been made to develop filtering tools to reduce infringing or to communicate the basic principles of copyright to users (Grokster, Kazaa). In light of the factors listed above, the key to liability for authorising infringement in the online world seems to be whether an organisation that enables file sharing acts responsibly – by communicating the relevant provisions of copyright law to its users, and by making reasonably efforts to restrict unlawful usage. From the submissions it seems The Pirate Bay did not act in any way that could be viewed as responsible. Taken together, the Pirate Bay’s stated views on the value of copyright law, its failure to make any effort to restrict infringement or to communicate legal restrictions to users, and its revenue-generating advertising, were its undoing.

This update is © Michael Simkins LLP but you are welcome to forward it to anyone who may be interested. This bulletin is for general guidance only. Legal advice should be sought before taking action in relation to specific matters.www.simkins.com

An English translation of the Pirate Bay decision can be found at:
http://www.ifpi.org/content/library/Pirate-Bay-verdict-English-translation.pdf
(This is a translation commissioned by the IFPI and not a court record of the Stockholm District Court)