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The development of internet based ‘peer to peer’ (‘P2P’) file sharing networks has raised questions as to the extent and scope of copyright infringement. As technology rapidly improves and blurs the application of copyright laws across jurisdictions, copyright owners have been left chasing the backers and users of such networks in an attempt to protect their interests and profits.

P2P technology enables users to search for and share files over the internet. The majority of files shared and downloaded using P2P networks are copies that infringe copyright, causing a sizeable loss in profit for copyright owners. It is illegal to share or download copyrighted materials, including music, movies and games, without the permission of the copyright owner. Representatives from the record and film industries have brought numerous civil actions against individuals who illegally download copyright material, for the most part in the United States of America, however the more contentious and costly litigation has been brought against P2P hosts themselves.

While there is no internationally codified law on copyright infringement, national laws and International conventions such as the Berne Convention 1886 have attempted to unite copyright law around the world. In Australia, the Australia – United States Free Trade Agreement has now made Australian copyright law almost parallel to that of the United States by the enactment of the Copyright Amendment Act 2006 (‘the Act’), with increased protection for copyright owners and tougher penalties for infringement. The Act and the respective copyright laws of member countries of the Organisation for Economic Cooperation and Development generally provide that it is an offence to assist or conspire in the infringement of copyright and it is through this that P2P networks have been held accountable.

The first major P2P network, Napster, appeared on the internet in 1999 allowing thousands of users to freely swap music files across its own internal servers. The centralized server sealed Napster’s culpability for copyright infringement in the case of A&M Records Inc v Napster Inc (2001) 239 F 3d 1004, where the United States Supreme Court reasoned that Napster had a duty to assert control over its server and the activities of its users and failure to do so facilitated the infringement of copyright.

Napster was forced to shut down in 2001, only to be replaced by a string of ‘second generation’ networks such as Kazaa, Morpheous, and Grokster, that removed the centralized server and connected users directly with one another, effectively avoiding the copyright infringement that undid Napster. Those networks were subsequently found to encourage copyright infringement and removed from the internet. Nevertheless, no sooner than one network is shut down another emerges, more sophisticated and evasive than the last.

The Pirate Bay Case

Interesting copyright legal developments have emerged from the ongoing and very public Pirate Bay Case, an action brought against the four developers of Swedish based P2P network, the Pirate Bay. The Pirate Bay website runs the world’s largest online directory of media files and allows users to search for, track and download those files. Since none of the files are stored on the Pirate Bay website or its server, the prosecution failed to show that the defendants had in anyway conspired to copy infringing materials, leaving the entire case to rest on the topical question: does assistance in gaining access to copyright material constitute a breach of copyright?

The District Court of Stockholm answered clearly in the affirmative. The Court found that the defendants had facilitated and consequently aided and abetted the infringement of copyright by providing users with easy methods for uploading and downloading files and connecting them with other users through their website. The defendants were ordered to pay 30 million kronor (around $4.76 million) in damages to be distributed amongst the plaintiffs, with significant portions to Twentieth Century Fox Film, Colombia Pictures and Warner Bros. Incorporated. In a legal first for the assistance in infringement of copyright, each defendant was also delivered a one year prison sentence. The defendants have lodged an appeal against the decision and argued that the law was misapplied. The plaintiffs have similarly appealed, claiming that the damages are insufficient compensation for their loss and should be increased to 100 million kronor (around $15.8 million). Should this verdict be upheld or increased, it will send a very strong deterrent message to developers and users of P2P networks.

The appeal in this case may take several years but is certainly eagerly awaited. Not only is the aiding of copyright an area of law that requires clarification, but the Pirate Bay Case raises questions as to the role of other popular internet search engines in the conspiracy to infringe copyright, and will surely set the tone for future copyright infringement litigation.

The continued fight to protect copyright

Copyright owners, in particular the major players from the music and film industries, have shown a relentless and aggressive approach to prevent illegal file sharing and use. While at times their efforts may seem futile, considering the unlimited capability of the internet and the continual development of more sophisticated file sharing techniques, copyright owners will not be giving up this fight any time soon.

P2P network hosts and users alike should be well aware of the legal implications of copyright ownership and infringement. The actions of an individual in sharing or downloading files are fully traceable and could attract legal action and financial penalties, as recent case law highlights.

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