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Background

The Pirate Bay, based in Sweden, is an online service that directs users by means of hyperlinks to of a huge volume of copyright films, music, books, television programmes, games, software and other content. The service is free to use and is supported by advertising.  

Using the peer-to-peer file sharing protocol BitTorrent, The Pirate Bay site allows users to make a .torrent file or group of .torrent files available to the network. The .torrent files links to content hosted elsewhere. The site then acts as an indexer, tracker and search engine of those .torrent files, enabling users to search for and download the organised .torrent files from their host location. Those in turn allow users to find other people who have what they want and to share the .torrent files amongst themselves. Every BitTorrent user with a copy of the .torrent files contributes a piece to the overall downloading.

The Pirate Bay site is the world's largest BitTorrent tracker with an estimated 22 million simultaneous users. It is available in 34 languages, from Arabic to Slovenian.

Judgment

Communication to the public and jurisdiction

The District Court of Stockholm found that The Pirate Bay file sharing service makes .torrent files linking to copyright protected works available to the public without the permission of the rights holders. The file sharing constitutes an illicit communication to the public of protected works in violation of Swedish copyright law.

Under Swedish law, a crime has been committed if it occurs in Sweden or, when it is uncertain where a crime has been perpetrated, there are reasons to assume that the crime has been committed in Sweden. The Swedish Court decided that a crime which involves the making available of something on the Internet shall be assumed to have been committed in a country where an Internet user can access the information; provided that the making available of the information has an affect on the right holders' exploitation of the works in that country. Taking account of that The Pirate Bay is available in the Swedish language and that its servers are placed in Sweden, the Court concluded that the copyright infringements committed by the users of The Pirate Bay have been committed in Sweden and that they are punishable under Swedish law; irrespective of whether .torrent files are hosted by file sharers in Sweden or elsewhere.     

Complicity in copyright infringement

To be convicted for complicity in crime in Sweden, it is not a requirement that perpetrators behind the main crimes, i.e. copyright infringement, are identified, provided, however, that a crime has been committed. Having decided that copyright infringement has been committed through The Pirate Bay site, the Court turns to the question whether or not the defendants have participated in the illegal sharing of copyright protected material.

By providing a user-friendly interface and search engine, enabling users to search for specific content or to browse the organised lists of films, music tracks, games and other content, and by providing a tracker that helps users connect to that content and download it, the Court finds that the defendants have facilitated and thus aided piracy. The Court acknowledges that their purpose was to make The Pirate Bay a meeting place for file sharers and they worked as a team to develop the site technically and commercially. Although the defendants have denied any commercial motives behind the site, evidence presented by the prosecutor indicates that the defendants construed an operation designed to make revenues for themselves. The evidence includes a signed agreement between the defendants to share the proceeds from advertising revenue as well as offshore bank accounts. As the defendants knew that copyright content was shared on the site and did nothing to prevent the piracy, the Court concluded that the defendants wilfully participated in the illegal sharing of copyright protected material. The one year imprisonment sentence is the longest period of time ever awarded by a Swedish court for violation of the Swedish copyright law, although the maximum sentence is two years.

Civil claim

The entertainment companies' claim of SEK 107 million (£9.3 million) for damages in relation to a sample of the 33 works of music albums, films, television series and computer games selected by the prosecutor, was reduced to SEK 30 million (£2.4 million). The court found that the damages constitute reasonable compensation for the use of the works and for further damages, such as lost remuneration and disturbance of the market for the works.

Comment

The defendants remain unrepentant and have said that they will appeal to the higher Swedish Courts. They have until 8 May 2009 to appeal.

If the judgement is not subsequently overturned, the case has potentially wide-reaching ramifications for all websites available in Sweden that publish hyperlinks leading to infringing material. Rightsholders may now view Sweden as a 'preferred jurisdiction' for bringing action against international sites that include links to infringing material. The judgement may trouble sites such as search engines, which provide users with links to all areas of the web, and social networks, where users are free to post links to whichever online destinations they choose.

However, there is some way to go before we can regard this decision as a basis for the principle that by merely publishing a link to illegal content, you are liable for complicity in copyright infringement. First, the decision will most likely be appealed and the arguments will be heard by at least one higher Court. Second, and more importantly, The Pirate Bay decision is based on an unusual set of facts; the founders were actively involved in a political campaign to encourage copyright infringement in Sweden and set out to provoke copyright holders. By contrast, nearly all search engines and social networks take careful measures to avoid liability for copyright infringement, including operating a legal 'take down' regime, under which they remove an item of content after receiving notification from rights holders that the content has not been authorised. Nonetheless, even though the Swedish Courts cannot set a legal precedent across the globe, if other courts take account of its decision, the case will have ramifications for any business whose operations include the provision of hyperlinks to unauthorised content.

Io, in its attempt to keep Veoh out of the DMCA safe harbor, asserted that Veoh did not implement a “repeat infringer policy” in a reasonable manner. The DMCA requires a service provider to implement a “reasonable” policy to remove “repeat infringers”—individuals who repeatedly upload infringing content to the website. The only evidence that Io presented in support of its assertion that Veoh did not implement a reasonable repeat infringer policy was that its vice president was able to open up a new Veoh account using the pseudonym, “Faux User99” with the e-mail address “FauxUser01@yahoo.com.” A reasonable repeat infringer policy is not a foolproof one. Citing Corbis[5], the court explained that a service provider reasonably implements a repeat infringer policy when it terminates users when appropriate.[6] A service provider is not required to track users in a particular manner or police its users for evidence of infringement.[7] Veoh utilized a “two strike” repeat infringer policy where a user would receive a warning the first time he/she was found to have submitted infringing content, and would have his/her account terminated upon the second offense. Veoh had also terminated more than 1,100 users since its inception. In sum, while the court did not go so far as to determine that Veoh’s repeated infringer policy was reasonable, it indicated that Io had not presented sufficient evidence to the contrary.[8] Strike two.

As a last attack on Veoh’s safe harbor qualifications, Io drew the court’s attention to Veoh’s process of creating Flash clips and still-images of user-submitted videos, and claimed that these files are not stored on Veoh’s system “at the direction of the user,” as required under the DMCA and explained in the CoStar case[9], where the 4th Circuit held that excluded from the DMCA safe harbor is material that resides on the system through a service provider’s own acts or decisions and not at the direction of a user.[10] Veoh responded that the Flash clips and still-images are created through an automated process to enable navigation on the website. The Veoh court held that Veoh did not lose safe harbor protection because Veoh did not actively participate or supervise the uploading of files, but simply utilized an automated process to facilitate user access to material on its website.[11] Strike three.

While the Veoh decision is clearly a positive for proponents of the sufficiency of DMCA and OCILLA in providing adequate mechanisms for balancing the interests of copyright owners with Internet service providers, the case, when you take a closer look at the facts, actually presents more of a lesson in how to be an unsuccessful copyright infringement plaintiff. If you plan on filing suit against an Internet service provider for copyright infringement, be sure that you have followed the steps in the DMCA before moving forward in court. Clearly, there is still potential exposure for websites that function essentially as a conduit for infringing content (e.g., file-sharing websites like Grokster) and businesses that utilize UGC in their commercial advertising campaigns without regard to traditional advertising law and regulation. Given the myriad permutations of use and distribution of UGC, these disputes are always going to be fact-specific and likely subject to multiple interpretations, depending on the court hearing the case.

“Throughout Browne’s career, he has closely associated himself with liberal causes and Democratic political candidates,” states the complaint. “Browne has often performed at political rallies for Democratic Party candidates.”

Neither McCain nor the Ohio or National Republican parties sought or received a license or Browne’s permission to use his song, according to the complaint. The ad was created for broadcast in Ohio and Pennsylvania, but also was streamed over the Internet, the suit alleged.

The song at issue was released on the 1977 platinum album also titled “Running on Empty,” which was Browne’s all-time best-selling album. The complaint alleges that the McCain campaign has used songs by Frankie Valli, ABBA and John Mellencamp in commercials and events without authorization, prompting demands that he cease using works by those artists as well.

Browne is seeking $75,000 in damages and an injunction to stop the commercial from being played. He is claiming the ad infringed on his copyright, and violated his right of publicity under California common law.

A spokesman for McCain’s campaign told media outlets that McCain’s campaign was not responsible for the ad. But Browne’s attorney said that the Republican Party of Ohio was acting as an agent for McCain when it created the ad.

Why this matters:  If the advertisement had involved the sale of a commercial product, Browne might have an easy victory; advertisers are required to obtain licenses to use copyrighted works in their ads. However, political speech receives a higher level of First Amendment protection than does commercial speech, and Browne may have a harder time proving his case. McCain may claim his brief use of a portion of the song was fair use. Nonetheless, to avoid litigation, candidates for political office would be wise to seek permission to use works from artists who endorse or support them.