Pirate Bay Founders in Copyright Trial in Sweden

BLOOMBERG. The founders of The Pirate Bay , an online site for free sharing of music and films, face charges this week in a Stockholm court of contributing to copyright infringement and bilking entertainment companies out of billions of dollars.

The Web site is the world’s largest file-sharing site using BitTorrent software, which allows users to download and share files in 34 languages for free, according to the International Federation of Phonographic Industry. The site reported 22 million simultaneous users this month and had 1.6 million files linking to movies, music tracks and other media in January, IFPI said.

A victory for the prosecutor and entertainment companies including Vivendi SA and EMI may threaten the existence of The Pirate Bay , which since its founding in 2004 has developed a following that includes its own political group, The Pirate Party, which aims to change intellectual-property laws. Branches of The Pirate Party exist in the US, most European countries, Peru, Brazil, Canada and South Africa, according to the party’s Web site.

“Certainly this is one of the biggest piracy trials and it’s taking aim at a very prominent site,” said Akash Sachdeva, a copyright lawyer at Allen & Overy LLP in London. “This will be more of a PR victory than a legal and commercial victory. The industry can show it won’t tolerate this type of piracy.”

The four defendants in the criminal case are Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde Kolmisoppi and Carl Lundstroem. They were charged with contributing to copyright infringement by facilitating the distribution of protected material.

The prosecutor dropped some of the charges earlier this week, leaving only allegations that Pirate Bay assisted in making copyrighted material available, the UK’s Guardian newspaper reported yesterday.

The Pirate Bay didn’t respond to e-mails and phone calls seeking comment. In past statements on its Web site, the organizers said the site is a network where users put up content to share with other users. There’s no copyrighted material on The Pirate Bay ’s site, the group said.

Music companies in the case, including EMI and Vivendi’s Universal Music Group, are seeking compensation of 2.2 million euros ($2.8 million) for a sample of music tracks selected as a basis for the case, IFPI said. The film industry, which under Swedish law must limit its case to the piracy of four films and one television series, is seeking 10.9 million euros in damages.

Sachdeva said he doubted whether The Pirate Bay site would be completely taken down if the four defendants are found guilty. “In practical terms the industry could shut down some of the site, but to completely obliterate it is very difficult and it can potentially involve cross-border issues,” he said.

The Pirate Bay is presently selling t-shirts and other items to raise funds. When accessed yesterday, the Web site had a notice that all orders are being delayed three to five days beyond normal delivery times because of the “large amounts of orders” stemming from public awareness of the court case.

“I don’t think this case is about money because the money lost can never be estimated,” Ludvig Werner, the chairman of IFPI Sweden said in a phone interview. “It’s much more about the fact that these guys without asking permission from anyone are spreading millions of copyrighted files and they made it clear they have the initiative to profit.”