UK: The Sinking Of Pirate Bay

Last Updated: 28 May 2009
Article by Nick McDonald

Summary of Article

  • This judgment is certainly significant. However, whilst tempting, it is premature to state that this judgment necessarily has wider effect.
  • Illegal downloading has thrown the creative arts industry into crisis.
  • Pirate Bay is a BitTorrent Tracker, ie it does not store copyright infringing material in any way.
  • The 4 individuals (Neij, Warg, Lundstrom and Sunde) have been convicted of "assisting making available copyrighted content".
  • One of the key issues is whether they are entitled to rely upon the E-Commerce Directive as "mere conduits" of infringing material.
  • The fact that they have not been able to do so does throw into question whether sites such as Google, YouTube, or eBay could be similarly criminally liable.
  • However, this decision is inevitably going to be appealed and the ultimate decision remains uncertain.
  • Even if the 4 individuals are ultimately convicted, the finding that they have "assisted" the dissemination of infringing material is a decision on its facts to some extent.
  • Moreover, it is unlikely that decision would be repeated in other jurisdictions, such as the UK, where caselaw has found that the charge of authorising copyright infringement has a high threshold.

Introduction

The decision by a Swedish court to convict Frederik Neij, Gottfrid Svartholm Warg, Carl Lundstrom and Peter Sunde of assisting making available copyrighted content" is potentially significant, but caution needs to shown in immediately suggesting it will have wider effect.

Facts Of The Case

Pirate Bay is a well-known Swedish filesharing site, which uses BitTorrent technology to allow its users to share and therefore download content.

Pirate Bay has been the target of the music industry, and the Swedish authorities, for some time. On 31 May 2006, the website's servers were raided by the Swedish police, causing the site to close down for three days.

Despite mounting pressure, however, the site remained generally operational, and its founders have consistently argued that the site is doing nothing illegal.

However, on 31 January 2008, charges were filed by Swedish prosecutors against four individuals, Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundstrom, for "promoting other people's infringements of copyright laws".

There followed a high profile trial, dubbed a 'Spectrial' by Pirate Bay itself (a combination of spectacle and trial).

On 17 April 2009 the four mean were convicted and each sentenced to one year in jail each and ordered to pay a total of 30 million SEK (3.6 million USD). Inevitably, an appeal has now been lodged.

Crisis In The Music Industry

The case is yet the latest round in an ongoing battle between the creative arts industry and filesharers.

It is a widely held view that the creative arts industry, and the music industry in particular, is in crisis because of the decline in CD sales and exponential rise in copyright infringement over the internet. A report by Enders Analysis from last year estimated that global CD sales, for example, are likely to stabilise at around £23 billion in 2009, down from a high of £45 billion in 1997.

Put simply, the internet has created a bootleg crisis in the creative arts industry that threatens to overwhelm it.

Filesharing

Principally, illegal downloads are effected through filesharing: the activity of trading digital files with other users over the internet. First generation filesharing protocols, such as Napster, used a central server to access materials. It was thus easy to identify a central source of copyright infringing materials. Second, third and fourth generation filesharing protocols do not use a central server. Instead of users being dependent upon receiving content from a central source, they are able to exchange data with each other. Moreover, they can achieve anonymity by routing traffic through other users' clients.

Fourth generation filesharing allows streams instead of files to be transmitted over a P2P network. Therefore, it is possible, for example, to listen to live video or audio without any server being involved. In order to do this, swarming technology is used, which involves use of the BitTorrent protocol to download segments of data from a variety of other users and then put it together to create the data stream.

Pirate Bay operates on this basis, and indeed is widely regarded as the world's largest Bit Torrent Tracker.

The Legal Context

It is important to remember that online infringement can never be looked at within the boundary of a single jurisdiction. It is a multi-jurisdictional, international issue. Copyright protection in other jurisdictions, whilst unified to extent through the Berne Convention and the Universal Copyright Convention, is not subject to the same tests.

That said, copyright works generally must be original, and they must have a fixed material form. They do not, however, generally need to be registered. Therefore, no forms need be completed nor are there any fees payable to obtain copyright protection.

As such creative works such as music or videos invariably attract copyright protection, which means that such works downloaded from sites such as Pirate Bay in an unauthorised manner infringe the copyright of the owner of those works (artists, or more often, record companies and musical producers' organisations).

Infringement of copyright can occur in numerous different ways. In the UK, copyright infringement is governed by s.16 Copyright Designs and Patents Act 1988. Primary acts of infringement include:

  • Copying the work;
  • Issuing copies to the public;
  • Renting, lending the work to the public;
  • Performing, showing or playing the work to the public;
  • Communicating the work to the public;
  • Making an adaptation of the work or doing any of the above in relation to an adaptation.

...or authorising any of the above acts, which is a key point.

Secondary acts of infringement include:

  • Making;
  • Importing into the UK;
  • Possessing in the course of business;
  • Selling or letting for hire.

Deliberate copyright infringement is, under s.107 the Act, a criminal offence.

Similarly, in Sweden, criminally infringing acts include assisting copyright infringement and assisting making available copyrighted content. It was these offences that were brought against Neij, Warg, Lundstrom and Sunde. On the second day of the trial prosecutors were forced to drop the charge of assisting copyright infringement because they were unable to prove that .torrent files submitted as evidence used The Pirate Bay's tracker, nor were they able to fully explain the technology involved to the Court.

However, the charge of assisting making available copyrighted content (Or "Assisting in violation of copyright law" as an English translation of the judgment reads) remained (as did "Preparing for a violation of copyright law"). Neij, Warg, Lundstrom and Sunde were convicted of "assisting" but cleared of "preparing for".

There is no legal difference between a hard copy and a digital copy of a copyright work. To that extent, copyright is technology neutral.

However, there are some differences in the extent to which copyright infringement of such material will occur. Clearly, whilst the transmission of physical copyright works can be easily tracked, that is less easy with electronic works. The question is the degree of involvement that websites such as Pirate Bay have in facilitating the downloading by individual users of infringing copyright content.

The EU directive 2000/31/EC (the E-Commerce Directive) provides that information society services providers are not liable for damages in certain circumstances, where that provider is a "mere conduit" of that content, is involved in "caching" that content, or is a "host" of such content.

Article 15 states that there should be no obligation on such entities "to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity".

However, member states may "establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements". Therefore, there is an obligation on such information society service providers to institute systems for dealing with copyright complaints.

These 'safe harbour' provisions have been used in defence of internet service providers. They have also been used to defend eBay and Google. In Belgium, for example, the Lancôme/Ebay judgment of the Brussels Court of Commerce found that Ebay qualified as a "host" under the E-Commerce Directive, that it benefited from 'safe harbour' provisions in the E-Commerce Directive and was entitled to rely on Article 15 in its defence against claims that it had allowed sales of trade mark infringing goods.

It was also the 'safe harbour' provisions, and in particular Article 12, upon which Pirate Bay's lawyers – in part - relied in arguing that they were not liable for any damages. On the third day of the Trial, in what has become known as the "King Kong Defence", defence attorney Per Samuelson stated to the Court:

"EU directive 2000/31/EC says that he who provides an information service is not responsible for the information that is being transferred. In order to be responsible, the service provider must initiate the transfer. But the administrators of The Pirate Bay don't initiate transfers. It's the users that do and they are physically identifiable people. They call themselves names like King Kong.... According to legal procedure, the accusations must be against an individual and there must be a close tie between the perpetrators of a crime and those who are assisting. This tie has not been shown. The prosecutor must show that Carl Lundström personally has interacted with the user King Kong, who may very well be found in the jungles of Cambodia..."

In finding that Pirate Bay was indeed a commercial information service provider, the Court held that the failure by Pirate Bay to establish a system for dealing with copyright complaints meant that it could not rely upon the 'safe harbour' provisions.

What Does This Decision Mean?

Per Samuelson argued that, under Swedish law, the charges must be brought against individuals and there must be a close tie between the perpetrators of an offence (the downloaders of copyright infringing material) and those accused of "assisting". Per Samuelson argued that, importantly, Pirate Bay can be used for downloading legal files as well as illegal files.

Clearly, the Swedish Court has taken a different view. The immediate and obvious response is therefore that sites like Google, eBay and sites containing user generated content (UGC sites) may also be criminally liable for IP infringements.

However, it is impossible to state – at this stage – that the Pirate Bay decision is either right, is not merely limited to its own facts, or that the application of legal principles is necessarily applicable across other jurisdictions.

Firstly, it is important to understand that the case relates to criminal liability, and therefore involves the fusion of copyright infringement (or rather assisting copyright infringement), which is essentially a civil offence, and criminal liability for assisting that essentially civil offence. Further, as regards damages it involves a rejection of the argument that liability can be discharged by the 'safe harbour' provisions set out in the E-Commerce Directive.

Moreover, the Swedish statute being applied is a new category of copyright infringement termed (in the Google translation of the Swedish Judgment at least) as "transfer to the general public", which is perhaps similar to "Communicating the work to the public" under UK law. This was only introduced on 1 July of 2005 by implementation of the EU Copyright Directive, and therefore remains relatively untested by the Swedish Courts.

Further, the conviction is actually for more than just copyright law. One of the defendants, Gottfrid Svartholm Warg was also charged and convicted of a "Violation of the law banning certain health-hazardous goods", ie possession of amphetamines, that no doubt swayed the Court to some degree.

All sorts of other issues were raised during trial, such as whether the defendants had acted in concert or independently. The chaotic structure of Pirate Bay contributed to these arguments. Fredrik Neij and Gottfrid Svartholm Warg essentially ran the site. Peter Sunde Kolmisoppi's liability stems from advertising payments and the issuance of invoices. Carl Lundstrom purchased servers and bandwidth. Therefore, since this matter is going to appeal, this issue will be tested again.

In reality, Pirate Bay is a fairly extreme example, as a website which – arguably at least - openly allowed its users to access infringing material. The factual position is much different for sites such as Google, eBay, and YouTube, for which such infringements are – even if widely known about – genuinely inadvertent. Recital 42 of the E-Commerce Directive makes clear that the 'safe harbour' exemptions are only intended to cover cases where the activity of the information society service provider is limited to the technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient:

"...this activity is of a mere technical, automatic and passive nature, which implies that the information society service provider has neither knowledge of nor control over the information which is transmitted or stored."

Therefore, Pirate Bay, whose very name arguably implies its aim is to facilitate pirate copies of copyright works, is not the sort of entity whom that legislation was envisaged as protecting from damages payments. Even in that context, it is far from certain that the prosecutions of Neij, Warg, Lundstrom and Sunde will be upheld on appeal.

Moreover, even if they are, the legal position is not necessarily the same across other jurisdictions. We do not, for example, have a law in the UK for facilitation of copyright infringement, although authorisation of copyright infringement is an offence and has a higher threshold than merely facilitating. In the well known case of CBS Songs –v- Amstrad (1988) RPC 567 the House of lords held that a twin cassette deck that could be used making copyright infringing tapes did not constitute the authorisation of copyright infringement because the cassette deck has legitimate uses. The decision mirrors a similar decision in the US, Sony –v- Universal City Studios 104 US 774 (1984) in which the legality of a Betamax video recorder which could both play recorded films was upheld.

That is not to say that copyright owners have no form of redress in the UK. The 'safe harbour' provisions, or example, merely prevent liability for damages or any other pecuniary measure, or for criminal sanctions. They do not however, prevent the possibility of injunctive relief. The Copyright Directive, which was implemented in UK through the Copyright and Related Rights Regulations 2003 inserted s.97A into the Copyright Designs and Patents Act 1988. S.97A gives the High Court the power to grant injunctions against internet service providers where there is actual knowledge of a third party using its services to commit a copyright infringement offence. Such knowledge can be effected through a notice to the ISP from the copyright owner. The Electronic Commerce Regulations require ISP's provide such contact details so that notices can be served.

However, the possibility of criminal liability in the UK for individuals such as in the Pirate Bay case is much more remote.

Conclusion

The Pirate Bay decision is a high profile, somewhat unexpected, and significant decision in a relatively new area. It is therefore a landmark decision of sorts. It potentially creates a new landscape for downloaders of infringing copyright material and providers of technology and services to assist that process. To that extent, the creative arts industry has won a major battle and will no doubt trumpet its success.

Yet, it is unwise, at this stage, to draw wider conclusions. It will be interesting to see what outcome emerges from the appeal (which could take up to 6 years) and even if the convictions are upheld the facts of this case are, to an extent, unique.

However, this is certainly a decision that will send shockwaves through the internet community. Moreover, it perhaps heralds a day, not too far distant, when internet users will no longer have easy access to free, illegal copyright material. For an internet generation that has grown up expecting such easy access, that may be a difficult prospect to contemplate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.