By Simon Levine
Friday, May 08 2009 09:28 AM
URL: http://www.zdnetasia.com/insight/internet/0,39044877,62053786,00.htm

perspective Recent verdict that the four founders of The Pirate Bay file-sharing Web site were guilty of helping to make copyright-protected content available to others marked a major milestone in online litigation.

The penalty of US$3.6 million will go toward compensation of 17 music and media companies, including MGM, Sony BMG and Warner. This penalty is significant, as it is the largest case ruling since the 2001 Napster case, and is clearly a victory for media rights owners.

One interesting feature of the case is that the founders of the site were found guilty of helping to make copyright-protected content available, a secondary act of infringement which is different to actual copyright infringement in the traditional or primary sense.

Similar to Napster, The Pirate Bay site did not host audio and video files, but instead included links to material hosted elsewhere on the Internet. In other words, the site was found to be guilty of facilitating illegal file-sharing.

This case also serves as a reminder that the same rules of copyright infringement apply whether the content is online or offline. This is something a lot of people tend to forget, or choose to ignore due to the flexibility in online regulation.

The Pirate Bay founders have vowed to appeal the ruling. It's hard to speculate on how they will fare but chances are it will be difficult for a successful appeal as the precedent is out there now so the example has been set.

Indeed the precedent set by The Pirate Bay ruling could soon have wide implications. The likes of YouTube and Google may be affected, as they also provide access to copyright-protected material. Indeed we are still awaiting the outcome of trials in the United States surrounding YouTube's ability to offer copyright material free of charge to the general public.

So the tide seems to be changing, but is it all one way? Perhaps not--this case also emphasizes the fact that traditional business models do not always work in the online environment.

New models still need to be adopted for the digital age to help end these sorts of copyright breaches, encourage users to use legitimate products and see it as good value. This very point is highlighted in Lord Mandelson's Digital Britain report--but it will need to happen sooner rather than later, otherwise more companies are going to be in the legal firing line.

Finally it must be kept in mind that The Pirate Bay case is just one ruling in one country. While most countries have similar laws outlining copyright infringement and rights, it is difficult to compare with certainty what happened in Sweden with what could happen in the United Kingdom. But as new UK laws and practices are set, it is more likely that companies and individuals could find themselves in a similar situation to The Pirate Bay.

And that is no bad thing--the ruling is a positive outcome for all media rights' owners. People who facilitate the infringement of copyright need to be stopped for the benefit of all creative industries, and the outcome of this case is a significant step in the right direction.

Piracy does not suddenly become acceptable because it is on the Internet. This is something The Pirate Bay learned the hard way.

Simon Levine is global practice leader in the IP and technology group at law firm DLA Piper. This article was first published on ZDNet Asia's sister site Silicon.com.