Swedish court finds Pirate Bay file sharing creators guilty, Hollywood hails ruling

 

From left, Gottfrid Svartholm Varg and Peter Sunde, two of the men behind the Pirate Bay. Credit: Fredrik Persson / AFP/Getty Images

In a victory – preliminarily, at least – for Hollywood, a Swedish court today handed down prison sentences for four men behind the Pirate Bay, a popular file-sharing search engine, and ordered them to pay $3.6 million in damages to such entertainment giants as Warner Bros. and EMI.

The four defendants were convicted of facilitating copyright violations and given one-year prison terms for their role in setting up and bankrolling the website, which allows users to find movies and songs to download for free.

But putting a damper on any Hollywood boardroom cheer, the men vowed to appeal their conviction, a process that could keep the dispute going for years, and the offending website remained up and running even after the verdict was delivered.

Moreover, one of the defendants, Peter Sunde, responded with an insouciant online video press conference in which he dismissed the verdict as “bizarre” and “stupid” and scoffed at the idea of handing over a cent.

“That’s the closest they’re going to get to any money from us,” he said, holding up a piece of paper in front of the camera with the handwritten words “I OWE U 31,000,000” Swedish kroners, or about $3.6 million. “They could’ve gotten 1 billion, and it wouldn’t matter, because we can’t pay, and we wouldn’t pay.”

The case has been closely watched by the entertainment industry, which has ...

... struggled mightily to keep pace with the digital revolution and the explosion of online services that basically enable millions of users around the world to enjoy blockbuster films, hit TV shows and bestselling pop albums for the price of an Internet connection.

Young people, especially, have latched on to the services, increasingly regarding the concept of paying for such products as quaint and outmoded.

As one of the most popular sites, the Pirate Bay, with an estimated 22 million users, had become a major target of entertainment companies intent on shutting such services down, or at least getting them to modify their operations through legal action – as happened to Napster – so that some revenue flowed back to them.

The Pirate Bay acted as a sort of data clearinghouse by directing users to bits and pieces of, say, a movie that were stored throughout cyberspace. The user’s computer could download the scattered nuggets of data at high speed, using technology known as torrents, and then assemble them to make the complete film.

Among the works allegedly downloaded illegally were songs by the Beatles and movies such as “Harry Potter and the Goblet of Fire.” Entertainment companies say such downloads cheat them of billions of dollars every year.

Defense lawyers had argued that their clients were not guilty of copyright violations because the Pirate Bay itself did not carry the content; it merely told users where to find them. But the court in Stockholm rejected that argument, deciding that the site essentially made such violations possible.

Judge Tomas Norstrom told reporters that the site was a “commercially driven,” money-making enterprise, but the four men – Sunde, Gottfrid Svartholm Warg, Fredrik Neij and Carl Lundstrom – denied that that was the case.

“There’s a lot of things in the ruling that [are] faulty, and a lot of things which, you know, they decided just to not listen to us at all,” Sunde said in his online news conference, during which he answered questions submitted by Twitter. “It’s so bizarre we just have to laugh about it. It’s unreal.”

He blasted the decision to issue a prison sentence for a civil complaint. “It’s serious to actually be found guilty and get jail time,” he said.

But when asked what he planned to do Friday night, he invited viewers to a party – and to protests he said were planned.

Representatives of the entertainment industry hailed the court decision as a victory. But they said the same in 2006 when Swedish authorities raided Pirate Bay’s headquarters and seized its computer servers, only to be dismayed when the site popped up again a few days later, running on servers located elsewhere.

More frustrating yet, the raid prompted protests in Sweden, and two candidates for prime minister announced publicly that they did not believe file-sharers should be treated as criminals.

-- Henry Chu

Comments

[Omonubi]

Again, the entertainment industry doesn't seem to understand that the fundamental problem is not controlling the data, its *how* users get the data to begin with. As long as high-bandwidth Internet access is essenitally "free" for everyone, they will continue to lose profits as more and more people simply publish and/or download content at minimal cost, with little or no risk for breaking the law.

The market for piracy has always been around; the Web just makes it so easy to do and get away with.

[Bryan T]

This is Napster all over again. Until Hollywood wakes up and creates some kind of legal, paid movie downloading service that uses torrent technology and is user-friendly, it won't matter how many file-sharing websites they shut down. If they ever get Pirate Bay, five more will pop up in their place ... *unless* they can repeat the iTunes model in which users pay a token fee for each download.

Hellooo? Hollywood? Get ON the torrent train; don't just waste your time trying to stop it.

[kola kadiri]

this is unfair...... these guys a re trying to make things easier.......

they should be released... FILE SHARING ISNT A CRIME IN ANY MANNER

[Mark]

Bryan T, why do you think that people are even willing to pay for a downloading service? This is the problem. It doesn't matter if it's an iTunes model or not, younger people have convinced themselves that paying even $1 is foolish. Stealing is okay to them, for some reason. I guess they've never created anything that has any value. Otherwise, they might think differently about it.

[georgethornton]

Three Stories: #1

I wrote Mr. Cary Winston of the RIAA about a decade ago. I explained the facts of life to him in these simple terms. (Not an exact word for word)

1.) What business model does Harvard B-School discuss where you sue your customers to make revenue?
2.) A true fan doesn't want a copy. They want the original.
3.) I have only so, many minutes in my life and only so much money, If you want to keep being a jerk, Then I can decide to spend my extra income called 'entertainment money' on golfing, boating, fishing, bowling or even just plain drinking. I don't NEED your product.
4.) You should thank me for taking time out of my life to give your product my ear-time. (I removed metallica and Steve Miller from my collection because of their cry baby antics - Now THEY will NEVER be heard in my house by me or my children). So, they went from possible to be heard to impossible.
5.) I can just watch TV like I have until recently, when RIAA decided they where going to stop suing their customers. (Had not downloaded anything in five years)
6.) I pay for the music all the time - everyday; Via my cable music channels both Audio and Video channels, TV commercials, TV Shows, Muzak, Movies, Radio. I have paid for it! But, You decided you wanted none of my money instead of some of my money. And thats what you got - nothing.

[Peter]

I love the defiance that these two swedes are wielding. If huge media conglomerates are upset in losing "billions," even though they are already raking in billions upon billions of dollars anyway then maybe they should realize that film was always meant to be a form of art until it was hijacked by greedy soul sucking businessmen who have turned it into a bottom line assembly line of unforgettable, two hour commercials for products we don't need. I don't care how much money they are losing, I hope the internet bleeds these bastards dry.

[georgethornton]

#2:

So, the RIAA is not going to treat me like the problem instead of the solution. Here two examples.

Went to Pirate Bay, saw a listing for the UK top 5O. Bit Torrent (and their is no way to stop bit torrent or any replacement to that technology - Thats like stopping speeders on the highway, sure you get one every now and then BUT if you got all then you would have a complete dead stop traffic jam and NO traffic would move).

The Brits have better pop music than the US in my humble opinion, get to hear things I NEVER get to hear in the US.

Downloaded, the zip file containing 50 songs. Loaded it to my music player. Very first song I fell in love with. Looked up the artist. Downloaded all her music via Limewire, Then, as I was listening to those songs, I looked under youtube, oh cool videos of her songs. Lets see if see has a website? Oh cool, all here videos , and I can make my own mp3 album!! Way cool!! Myspace, Facebook, Twitter signed up. ON TOUR!!!! Detroit, Boom... Bought tickets to see Lily Allen with in 1/2 hour after downloading her music "illegally" which you can see on You tube for free, Which you can get legally get for free form her website. Drove three hours to see her in Detroit. Bought the t-shirt and cd and the t-shirt WON'T even fit me. When I got back home that night I tried to buy tickets for N.Y. Next time in the US I will drive up to 600 miles. Am I a fan. YES I AM!

I have Brittany Spears music, never listen to it, couldn't tell what she sounds like, wouldn't go to a concert if it was free. Am I a fan? Guess not.

Now, I still have have not listened to ANY of those other 49 songs, at all! But, by the lawyer, RIAA, HOLLYWOOD, logic I owe for 49 other songs. But who did everything right to make me an instant fan. To grab me, To hold me. To STEAL my ear space.

Since, then I have become a fan of one other singer, which I will wait in line over-night to buy her CD & I don't want a copy either. Susan Boyle. (Will you be in line next to me?)

[Evan]

The worst thing about this conviction is that in their own country, Sweden, they haven't committed any crime as far as the Swedish Law is concerned, which makes this whole thing very confusing .. I guess when the greedy Hollywood studios and record companies opens their big valets (which are supposed to be empty?) and seeks the help of their high-powered associates, anything can happen.

I understand that swedes calls this the one of the biggest outrage concerning a criminal court case, in history.

[Shawn]

I disagree with the idea that every person who illegally downloads music would not be willing to pay a "token" fee for the music. The fact of the matter is that services like The Pirate Bay are innovators in their delivery model as was Napster. Napster was a proven delivery model that iTunes now uses with the exception of the $1.00/song (or X for the CD). At some point, some company will be willing to delivery movies and tv shows in the same way and will reach that success as well. iTunes and TV broadcasters (such as CBS and CTV) are doing that more and more every day, although there is still a struggle with copyrights over international borders (ie. I can't watch CSI on cbs.com because I'm in Canada) and the fact that to watch a new movie you are forced to go to a theatre. People will pay for something if it makes their life easier. The Pirate Bay, for some, is meeting that need and when there is no legal competition, it makes them more popular. Tapes, VHS, CDs, DVDs are all ways of transmitting copies. The copies are not the issue. Heck, borrowing a person's movie is, basically, violating copyright law if you look at how they view sharing of media online. It's how easy it is to get the copy that makes sites like these more successful that others. Make it easy and affordable and people will come.

[georgethornton]

Early in my sales career (IBM PC XT and just plain MAC), I 'lost' a sale. Well, more accurately, I told my sales manager, "I lost a sale."

He look at me and said "No you didn't." I explain what had happened.... He interrupted did you get the money. "No?!" I said. "Then, you didn't lose the sale. You can't lose something you never had!!!

The moral of the story is you can't lose something you didn't have.

I was never a Brittany Spears fan, I NEVER would have bought ANY of her MUSIC, I am not / was not and have not been a fan. You never lost money from me downloading her music. May be if it got played and I liked it, I might have driven to Detroit to see her. It did not, I did not, Never had it, Never lost it. Now, Lilly Allen I would fly to London to see.

Hey Hollywood!!! Over Here!!! Look Here!!! - Got ATT U-Verse first few months had the 400, EVERY Channel know to g-d package, plus all the on Demand FREE. Guess how many movies in three months I watched? Try again, ZERO - Not one single movie. NADA.... NONE.....FREE.

Now ATT really likes me and wants me to sign up for HBO. So, they gave me another two months last month for free. How many movies do you think I have watched for free. 'See Above' oh! and I have a PVR!!!!!! I did record one movie on April 4th, "Baby Mama".....I didn't I watch it. Hold on a second. Erase. Nor I am going to.

Hey Hollywood, You should be figuring out how to GET ME TO download your movies! I don't go the theater, I don't watch them when they are free, I don't watch them when I record them. Yet, you lawyers and accountants I going to count me as lost revenue. But, you NEVER had it so you NEVER lost it.

[lwps]

Thought crimes must be right around the corner.

[Ruben Perez]

What a sad group of whiners. The times they are a changin'.

I'm no dude, with 35 years, and I have created my share of music and software. Hollywood is as reluctant to change as ever, and the tendency will be to drag behind, lose on profits, and eventually collapse.

Hollywood and the record industry have repeatedly proved their inability to think up ways to benefit from new ways of distribution. They are as non-creative as we always suspected they were.

Maybe they would do better selling shoes or used cars.

Will you ever get the point that digital media sharing will only cease when we stop using computers and go back to farming the land?

Yeah, like that is ever going to hapen...

BTW I pay for my music and movies.

[Ronbo]

Within days of a movie coming out, you can download it for free. That's a reality, unless the ISPs agreed to help and could get away with doing so, it won't change. If there was a legal download service that charged me, say, five or six dollars a movie, I'd use it. Frequently. Maybe pay a dollar or two extra for the hi-def version. If I go see it in the theater, the studio gets half that ticket price, so that's about five dollars anyway. The theater box office would take a hit, but overall the studios would get more revenue, and convert many illegal downloaders to customers. And watching at home instead of schlepping to the theater: better for the environment.

[George Thornton]

"Maybe they would do better selling shoes or used cars" --- RU kidding they would be fired the first hour, they would never even get hired.

You have been in the Biz, and this is a Biz paper, in a Biz town....

But, you are not listening to me! I am the customer! You have not even made a movie that I would waste my time or bandwidth to EVEN download for free, let alone buy!!!!

I don't watch them on my TV, when THEY ARE FREE on FREE HBO or FREE in the 'all you can eat' starter package or FREE 'on-demand', I have a PVR and even when I record a movie, I still don't watch it? Are getting the picture here.

You need to pay me for my time to watch your movie!!! You want me to waste minutes of my life for what?

I had 300 movies until a bad roommate stole them three years ago I did not replace one. My mother died last year and left me 100 or so, I have not watched one!!

Paying or not paying is not even the issue, my time is the issue.

I have watched Susan Boyle 20 times in the last five days, Would I have paid a dollar each time Yep! Would I pay anything next week, Nope!

Thats what you need to solve.

[brandon smith]

ive got tons of movies ive downloaded from the pirate bay.

i have no money, or even a job right now.
so i wouldn't be buying them if i couldn't download them for free.
so how are the movie company's loosing money?
there not from people like me.

if anything there probably making more money because i seen them and recommend them to people.