Digital Media

In the aftermath of the Pirate Bay trial, many Swedish law experts say they consider Friday's high-profile guilty verdict severe but fair. Very few had predicted the verdict before it was handed out.

Complicating the case in many observers' eyes was the fact that no copyright-protected files were stored or distributed on the Pirate Bay Web site. But reading the 107-page sentence from Stockholm's Tingsratt district court offers a clearer picture of the grounds on which the court found all four defendants guilty of having assisted in making 33 copyright-protected files accessible for illegal file sharing via Piratebay.org.

The reasoning makes clear that the principal crime was committed by individual file sharers. This was established via technical evidence that came from content on servers confiscated by the police, as well as by testimony from witnesses who actually downloaded files using torrents on the Web site.

Pictured, from left, are Pirate Bay defendants Peter Sunde, Fredrik Neij, and Gottfrid Svartholm Warg. Carl Lundström is not pictured.

(Credit: Pontus Alexander/Fabian Landgren)

The four defendants--Peter Sunde, Gottfrid Svartholm Warg, Fredrik Neij, and Carl Lundström--were accused of having assisted in this crime, and according to Swedish law, it's not necessary to know who committed the infraction in such a case, only that it was committed.

During the trial, prosecutor Håkan Roswall also pointed out that very little is needed to be sentenced for assistance. He referred, as precedent, to a case several decades ago when a person was sentenced for assisting in a case of mayhem, only for having held the culprit's coat.

In its verdict, the Stockholm court states that "responsibility for assistance can strike someone who has only insignificantly assisted in the principal crime," then goes on to show how the defendants participated to a sufficient extent to be considered guilty.

First, the court establishes--through the defendants' statements and e-mail correspondence, and through letters from copyright owners published on the Web site--that the defendants all knew about copyright-protected files being shared by Pirate Bay users.

Second, the court demonstrates that through the Piratebay.org site, they offered both a search function for torrents (small files pointing to the desired file), means for easily uploading and downloading the torrents, and a tracker--the server that keeps file sharers linked while they swap.

But two further criteria have to be met to be held responsible for assisting: holding a position of responsibility and having intent.

Relying on the defendants' statements, e-mail correspondence, and accounting records, the court shows that they have collective responsibility--all having been in the position to act, and all having known about the others' actions. This is also why all four received the same verdict, though they clearly held different roles. Warg and Neij are the co-founders of The Pirate Bay. Sunde is a programmer and a spokesman there, and Lundstr öm offered technical services to the site in 2005.

Intent to swap
The court then finds that the four men had intent, as they knew about torrents pointing to copyright-protected files, and still allegedly did not act to cancel them from the Web site.

For the same reason, the court finally dismisses the defendants' last objection: a European law that doesn't hold e-merchants and service providers responsible for hosting clients' illegal material if they don't know about it.

Eventually, having shown the defendants guilty of assisting in copyright infringement, the court finds that one year of prison is fair, given the extent of the file sharing, and that The Pirate Bay's activities were "managed as a commercial project" and "managed in organized forms."

Though the verdict probably will be appealed twice, all the way up to the Swedish Supreme Court, Swedish legal experts don't expect it to be altered in any major way.

"I would be surprised if the verdict were overthrown in higher courts," said lawyer Kristoffer Nordman of the Swedish law firm Vinge, according to Swedish business weekly Affarsvarlden.

Lawyer Agne Lindberg of the law firm Delphi & Co. agreed, but told the paper the sanctions might be adjusted. Neither lawyer was directly connected with the Pirate Bay case.

Days after four defendants in the high-profile Pirate Bay case were found guilty of violating copyright law, the Web site implored fans to stay calm, not to send donations, and to stay united.

In a blog posted to Thepiratebay.org, the controversial BitTorrent tracker said the "verdict has already been appealed by us and will be taken to the next level of court."

Administrators of the court in Sweden did not immediately respond to requests to confirm the filing of the appeal. On Friday, the court convicted Gottfrid Svartholm Warg, Peter Sunde, Fredrik Neij, and Carl Lundström of charges related to copyright infringement and sentenced each to a year in jail and fined the group the equivalent of $3.6 million.

The news stirred outrage and disbelief among fans, while those at big entertainment companies rejoiced. Based in Sweden, the Pirate Bay has been accused of encouraging and aiding massive illegal file sharing by media and entertainment companies. The site's founders say they do not host any illegal content and are just a search engine. They have always argued there is little difference between the Pirate Bay and Google.

In the blog post, the Pirate Bay remained defiant.

"The site will live on," the group said in the post. "We are more determined than ever that what we do is right. Millions of users are a good proof of that."

Addressing efforts of some fans to raise money to help the defendants pay the fines, the Pirate Bay asked that such efforts cease. "We do not want (the money) since we will not pay any fines."

Pictured, from left, are Pirate Bay defendants Peter Sunde, Fredrik Neij, and Gottfrid Svartholm Warg. Carl Lundström is not pictured.

(Credit: Pontus Alexander/Fabian Landgren)

This story has been updated. See below for details.

A Swedish court on Friday found the four defendants in the high-profile Pirate Bay case guilty, sentencing each to a year in jail. The defendants were also ordered to pay a total of 30 million Swedish kronor ($3.6 million) in damages to copyright holders, among them a number of American media giants.

The four men--Peter Sunde, Gottfrid Svartholm Warg, Fredrik Neij, and Carl Lundström--were found guilty of having made 33 copyright-protected files accessible for illegal file sharing via the Piratebay.org Web site.

"The crime has been committed in a commercial and organized form," Judge Tomas Norström said in a Web broadcast from a press conference in Stockholm.

Warg and Neij are the founders of The Pirate Bay. Sunde is a programmer and a spokesman there, and Lundström offered technical services to the site in 2005.

The Web site--one of the most visited BitTorrent destinations in the world--offers a search engine for torrents that can be used for file sharing. It also offers a tracker, which is a server that keeps file swappers linked.

After a 13-day trial, judge Tomas Norström, plus his assistant and three namndeman (essentially a jury with extended powers), found ample evidence for a guilty verdict, though no actual files are stored on the Web site.

As a result of a civil claim filed alongside the criminal case, the four men will have to pay $3.6 million in compensation for lost sales to 17 media companies. Among them are Warner Bros. Entertainment, MGM Pictures, Columbia Pictures Industries, Twentieth Century Fox Film, Sony BMG, Universal, EMI, Blizzard Entertainment, Sierra Entertainment, and Activision.

The largest portion of that total is allotted to Twentieth Century Fox ($1.3 million), followed by Columbia Pictures ($504,000) and Warner Bros. ($300,000).

The four defendants have already vowed to appeal the verdict, and it could take years before the case reaches Sweden's Supreme Court.

"This is a victory for the prosecutor so far, but this is just the first round," said Jonas Nilsson, the defense attorney for Fredrik Neij, according to Swedish News Agency TT. The $3.6 million in damages is extreme in a Swedish case, Nilsson told TT.

Update 3:40 a.m. PDT: Added comment from the judge and a defense attorney, plus a breakdown of the largest portions of the $3.6 million in damages.

Update 6:48 a.m. PDT: Lundström's attorney, Per E. Samuelsson, has sent his appeal to a higher court, Svea hovrätt, according to Swedish Public Radio SR.

See also:
• Copyright holders cheer verdict
• Pirate Bay defendants to fight on

The four defendants in the high-profile Pirate Bay trial face year-long jail terms if found guilty when the verdict gets announced in Stockholm, Sweden, on Friday. But even if prosecutors get their way, it's less evident whether a legal victory would also translate to a broader deterrent against illegal file sharing.

Clearly, this case is being viewed on both sides of the Atlantic as a potentially landmark decision in the heated controversy surrounding unauthorized Internet file sharing. The prosecution accuses the four men standing trial--Peter Sunde, Gottfrid Svartholm Warg, Fredrik Neij, and Carl Lundstrom--of making copyright-protected material available through the Web site thepiratebay.org, one of the most visited BitTorrent destinations in the world.

The challenge for prosecutor Hakan Roswall has been to prove that the site actually can be legally linked to copyright infringement. He got off to a bumpy start. On the second day of the 13-day trial, which began in February, Roswall was forced to drop accusations that the defendants facilitated making illegal copies. Now the prosecution's case hinges on whether it can prove that the four men were guilty of making the files accessible.

No actual material is stored on the Web site that features a search function for torrent files used for file sharing with the BitTorrent technology--which is legal in itself, but commonly used for illegal file sharing.

It also offers a "tracker," which is a server linking users who swap specific files. The defendants insist Piratebay.org is no different from ordinary search engines, whereas copyright holders accuse it of being the most popular font of copyright infringement around.

Along with the criminal case, a civil claim was filed by media giants Warner Bros. Entertainment, MGM Pictures, Columbia Pictures Industries, Twentieth Century Fox Film, Sony BMG, Universal, and EMI. They demand 120 million kronor ($15 million) in compensation for lost revenue from allegedly illegal file sharing of 20 songs, 9 movies, and 4 computer games.

The judge, Tomas Norstrom, his assistant, and a three-person jury will have to decide whether the defendants could have had knowledge of the files being illegally shared, and whether that is a sufficient basis for sending them to jail.

If the defendants go free, the decision would deal a major blow to the music and movie industry's fight against piracy and its struggle to preserve current copyright legislation protections. If the verdict involves a prison sentence, Piratebay.org is still unlikely to go down.

After a search and seizure of servers by Swedish police at The Pirate Bay's offices in May 2006, which eventually led to the trial, the site was up and running after a few hours. Indeed, sending the four men to jail could also turn them into heroes or martyrs, inspiring others to find new ways to develop piracy.

This much is clear: the technology is already developing to let people share files without fear of being spotted by police or copyright holders.

Services hiding a computer's IP numbers have already been offered for some years, but even easier is a recent kind of second-generation peer-to-peer tool called OneSwarm, developed at the University of Washington in Seattle with the aim of letting file swappers preserve their privacy.

Even after Friday's decision, the case might last for years on appeal. If convicted, the defendants have already promised to fight the decision. And by the time any final verdict gets handed down, the court's opinion may be rendered obsolete by changes in the technology landscape.

CNET News will be covering the verdict, which is expected to be handed down around 2 a.m. PDT Friday, so check back for updates.

The trial against The Pirate Bay site began Monday in Sweden. And while Sweden is depicted by copyright-enforcement groups as piracy's promised land, it is also a nation that experiments with legal music-service alternatives.

The case against the founders of Piratebay.org--one of the world's three major BitTorrent sites--is expected to last 13 days, which would make it Sweden's longest-ever trial dealing with copyright issues. The case is the result of the search and seizure of servers by Swedish police at Pirate Bay's offices in May 2006.

For years, the International Federation of the Phonographic Industry and the Motion Picture Association of America have depicted Sweden as rife with digital piracy.

On a mash-up created with Google Maps, Pirate Bay itself shows where file-sharing users are located: most are in China (22 percent) and the U.S. (11 percent). Sweden (2 percent) is clearly over-represented, which might partly be explained by the fact that broadband connections are widely used throughout the country.

During the time leading up to the trial, though, at least three innovative, legal alternatives for listening to digital music have been launched in Sweden: Spotify, Tunerec, and Chilirec.

"It helped us see that there's something wrong when an illegal alternative defeats a legal one. We wanted to solve the problem with playing music on the Internet and find a model that would work for artists, users, and advertisers," said Daniel Ek, co-founder and CEO of Spotify.

Spotify has forged agreements with organizations such as Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin, The Orchard, and CD Baby, and now offers millions of songs streamed online. Subscribers pay about $12 a month and can listen to any song at any time.

But there's even more buzz about Spotify's alternative offer, a nonpaid service, completely free, that's currently open only for a limited group of invited users (except in the U.K., where Spotify a few days ago opened it up for anyone who wants to register). It's ad-financed, with a short commercial message being played a couple of times per hour, between two songs, whereas the paid service is ad free.

Chilirec and Tunerec, by contrast, offer a kind of personal Internet-based storage that records music from Internet radio stations worldwide, continually, resulting in a huge amount of songs stored in a short time that people have the right to listen to whenever they want, without ever downloading them.

The basic idea is that because the songs are recorded in a personal disk space for each user, it is to be considered private recording of radio music for personal use, which is perfectly legal.

Tunerec actually has an agreement with the International Federation of the Phonographic Industry and the Swedish copyright organization STIM. Chilirec has closed its beta, stating that it is now working on the design of a commercial product.

Three elegant solutions
We end up with three elegant solutions, at a time when copyright owners and authorities are trying to solve the piracy problem with law enforcement.

All three depend on people being online since they don't offer downloading. It's likely only a matter of time before they offer that feature, though. And when they do, they will probably use BitTorrent or similar file-sharing technologies as effective ways to distribute large files.

Where do we end up? Having people downloading and listening to all kinds of music, without paying, using file sharing. It seems familiar, but it will be legal and commercially viable. So did we really have to endure all the mess with hopeless legal efforts? It seems so.

Law enforcement is certainly giving people one reason to choose legal alternatives instead of piracy, but for years we have seen that it is not enough. Legal ways to consume digital music must also be extremely easy to use and have a very competitive price, which requires new ideas that both record companies and copyright enforcers have failed to produce.

These new ideas are instead popping up from companies that view a business opportunity where old models are failing. From that perspective, one might arrive at the conclusion that piracy actually showed the way.

Those keeping track of high-profile tech companies highly affected by the economic downturn can add BitTorrent to their list.

The San Francisco backer of the popular open-source file-sharing protocol on Friday gave pink slips to about half of its staff--18 people--according to a source cited by The New York Times' Brad Stone, and replaced CEO Doug Walker. The company had already endured a 22 percent layoff in August, which reportedly affected its entire sales and marketing department.

Eric Klinker

(Credit: BitTorrent)

Chief Technology Officer Eric Klinker, who has "two decades of networking, content delivery, and management experience" under his belt, according to a statement from BitTorrent, has been named as Walker's replacement and has joined the company's board of directors. Walker had left Alias Systems to take the CEO role just more than a year ago.

According to the BitTorrent statement:

Klinker has...been instrumental to the continued development of the BitTorrent client, BitTorrent's Delivery Network Accelerator (DNA) content delivery service, BitTorrent's Software Development Kit (SDK) and BitTorrent's proprietary advanced congestion control technology. The latter has been at the center of BitTorrent's influential discussions and well-publicized collaboration with Comcast Corporation, as it seeks to deploy a protocol-agnostic network management solution.

The Times report also said the company plans to shut down its media store, the BitTorrent Entertainment Network.

BitTorrent, the focus of much attention this year, with respect to Net neutrality and copyright infringement, did not immediately respond to a request for comment.

Americans are watching more video on their PCs via broadband connections than ever before, according to a recent report published by market research firm ABI Research.

Over the past year, the number of U.S. consumers who had watched a video streamed through their browser doubled over the past year, going from 32 percent a year ago to 63 percent today. ABI analysts attribute the increase to more rich content available on the Web as well as faster speed Internet connections.

While sites like YouTube that offer short clips of user generated videos have gotten a lot of attention over the past couple of years, the ABI report shows that viewers are also interested in watching TV shows and movies online.

All of the major TV networks in the U.S. are currently offering at least some of their TV shows online. Some of the shows can be accessed right from the network's Web site. But video aggregator sites such as Hulu.com also help consumers find what they're looking for. Hulu was launched as a cooperative venture of TV networks to provide easy access to movies and TV shows.

Of course, much of the growth in this area comes from younger consumers. When asked if they watched long-form content such as TV shows or movies online, nearly half of those under the age of 25 and 53 percent of those aged 25 to 29 said they had done so at least once a month.

Meanwhile, older consumers are watching more short clips online than actual TV shows. Three quarters of those over 65 who watch video online responded that they have never watched TVs or movies online, according to the survey.

"Today's younger consumers are developing habits that will mean drastic changes for the video entertainment market," Michael Wolf, research director at ABI said in a statement. "Many consume a large percentage or even a majority of their video entertainment through online distribution today, and we believe that this trend will continue to accelerate as more efforts are made to put this content on various non-PC screens."

Another important driver for watching TV online has been the proliferation of faster speed broadband connections. Cable operators have steadily been pushing up their speeds. And services like Verizon's Fios service, which runs over fiber optic lines directly into the home, have also boosted broadband speeds.

But Web-based video isn't without its challenges or without controversy. Sending video over the Internet eats up a lot of bandwidth. And peer-to-peer applications, such as BitTorrent, which distribute video have come under fire over the past year as a network menace.

Cable operator Comcast finally admitted that it has been slowing down BitTorrent and other peer-to-peer traffic. And it has provided a plan for managing traffic, which doesn't include singling out specific types of traffic. The Federal Communications Commission ordered the company earlier this year not to monkey with customers' traffic. Other cable operators, such as Time Warner Cable, are talking about metering heavy bandwidth usage in order to deal with the surge of online video.

Comcast reportedly plans to reduce Internet service to customers it deems to be using too much bandwidth, a move that comes on the heels of federal regulators ruling that the Internet service provider violated the law by throttling BitTorrent transfers.

To keep service flowing to other customers, Comcast plans to impede Internet speeds to its heaviest users for up to 20 minutes, Mitch Bowling, Comcast's senior vice president and general manager of online services, told Bloomberg in an interview Tuesday.

Instead of focusing on specific applications that may be hogging traffic, Comcast plans to determine "in nearly real time" whether a heavy user is causing congestion, Bowling said.

"If in fact a person is generating enough packets that they're the ones creating that situation, we will manage that consumer for the overall good of all of our consumers,'' Bowling said.

The move follows the Federal Communications Commission's ruling on August 1 that Comcast's throttling of BitTorrent traffic last year was unlawful--the first time any U.S. broadband provider has ever been found to violate Net neutrality rules. (The FCC released the text of that ruling Wednesday.) The FCC issued a cease-and-desist order and required the company to disclose to subscribers in the future how it plans to manage traffic.

Comcast, the largest cable provider in the U.S., has been under fire for months after it was discovered the company had been slowing down peer-to-peer traffic on its network. Comcast had said that its measures to slow BitTorrent transfers, which it voluntarily ended in March, were necessary to prevent its network from being overrun. At a public hearing in February, Comcast Executive Vice President David Cohen said, "Comcast may on a limited basis temporarily delay certain P2P traffic when that traffic has or is projected to have an adverse effect on other customers' use of the service."

Consumer groups were incensed by the tactic, and the FCC investigation ensued over whether Comcast had violated any of its Net neutrality principles.

Internet papa Vint Cerf said broadband speed limits rather than broadband data caps would be more useful in managing congested networks.

Vint Cerf, Google chief Internet evangelist

(Credit: Google)

Cerf, who is Google's chief Internet evangelist, on Monday wrote a post on the company's public policy blog blasting the idea of applying data caps and metered rate plans. Instead he proposed a plan that limits network speeds.

His comments come just days after the Federal Communications Commission's symbolic ruling against Comcast for violating the agency's Net neutrality principles. The FCC came down hard on the cable operator for blocking access to peer-to-peer file-sharing protocols such as BitTorrent.

Comcast has argued that it was only targeting protocols such as BitTorrent in order to manage its network, which has been flooded with P2P traffic. This is a common complaint among Internet service providers, particularly cable operators, whose networks were originally built for one-way communication and also share capacity at the neighborhood level.

In response to the controversy, some ISPs are looking into consumption-based billing or putting volume caps on the amount of data that subscribers can use. Time Warner Cable started testing such a metered bandwidth service in Texas. The way it works is that customers pay for a certain amount of data capacity per month that can be either uploaded or downloaded using their broadband connection. And if they go over the cap in a given month, subscribers are charged $1 per megabyte.

Cerf, who helped create the TCP/IP protocol used as the foundation of the Internet, says that he doesn't think applying a "volume cap" is very "useful." He also said that metered pricing instead of the flat fee plans "could end up creating the wrong incentives for consumers to scale back their use of Internet applications over broadband networks."

That said, Cerf acknowledges that ISPs, such as Comcast, need to be able to manage their networks. But instead of using volume caps, he thinks ISPs should introduce transmission caps. These would allow users to purchase access to the Internet at a given minimum data rate, which would be guaranteed even during times of congestion. Subscribers could download or upload data of any size, anytime they want, at the guaranteed rate. When the network isn't congested, like in the middle of the night, users could get faster speeds. But during times of congestion, the broadband pipe would be limited to the minimum guaranteed rate.

This might mean that at peak times, it could take much longer to upload or download content. If subscribers get frustrated with the slower speeds, they could upgrade to a higher tier of service with a faster minimum speed. Or ISPs could offer a service that allows users to pay for short bursts of speedier connections.

The technology to create such a service has existed for some time. And network operators have been offering corporate customers data connections with minimum data rates spelled out for years.

The problem is that carriers don't want to sell consumer broadband services this way for a couple of reasons. For one, broadband providers prefer to advertise peak speed connections rather than minimums. A service that offers up to 10Mbps sounds a lot sexier than one that guarantees a 1Mbps download.

But network operators typically oversubscribe their networks to squeeze more profit out of their customers. The idea is that all subscribers don't use the network at the same time, typically leaving enough capacity so that when they do use the network, most users can get close to the maximum capacity offered. Selling services with minimum bandwidth guarantees means that operators wouldn't be able to oversubscribe the network as much, because during times of heavy congestion they might not be able to deliver the minimum data rates. It would also force these providers to enter into strict service level agreements with individual customers, which could potentially cost them a lot of money if they can't deliver the minimum guaranteed speeds.

It's difficult to say whether broadband providers will heed Cerf's recommendations, especially since the cable operators, due to how their networks are designed, are the ones in greater need of help. The phone companies, which have always had networks built for two-way communication, have also been aggressively upgrading their networks with fiber, which offers greater capacity.

Verizon Communications has been building a fiber-to-the-home network, which will allow the company to continually upgrade capacity by simply changing some of the hardware on the network. And AT&T has been upgrading its network, pushing fiber deeper into neighborhoods to provide more capacity over shorter loops of its last mile copper networks.

That said, Cerf writes in his blog that he's encouraged by the talks he has had thus far with Comcast.

"I've been pleased so far with the tone and substance of these conversations, which have helped me to better understand the underlying motivation and rationale for the network management decisions facing Comcast, and the unique characteristics of cable broadband architecture," he said. "And as we said a few weeks ago, their commitment to a protocol-agnostic approach to network management is a step in the right direction."