Swedish ISP wins appeal in biggest test to date of EU anti-piracy law

Last March, the European Commission voted to enact a continent-wide law compelling member countries to take bolder steps to enforce their own copyright infringement laws. One of the more controversial provisions of the Intellectual Property Rights Enforcement Directive (IPRED) has been to allow rights holders to petition member states' governments to act on their behalf. That provision has emboldened some rights holders and associations to act as evidence gatherers; and in Sweden, their right to do so was put to the test.

A group representing five publishers of audiobooks in Sweden were judged to be entitled to the identity of a single file-sharer. In a June decision, a district court in Solna ordered ISP ePhone to turn over the name of the file-sharer. It refused, and was forced in September to pay a fine of 750,000 kronor (about $107,400), one-tenth of which was to go to the publishers.

While the publishers did not have the complete identity of the unauthorized file-sharer, they knew that he/she existed. Acting under what they had described as the authority granted them by IPRED, someone representing the association hacked into ePhone's records to obtain the single IP address to which the unauthorized downloads were associated, according to ePhone.
The district court ruled that the association had "probable cause" to investigate ePhone's records in the manner it did, applying language that's usually reserved for federally sanctioned investigative bodies.

The 750,000 SEK fine was of some concern to ISPs throughout the country because of the precedent it might set: In keeping with a separate EC privacy directive, ISPs had been destroying their retained data on users and their online destinations after six months, if not sooner. The ruling of the Solna court appeared to threaten those same ISPs with sizable fines for...well, there's no other way of saying this...permanently destroying such data in such a way that it could not be un-destroyed.

But in a 2-2 decision yesterday whose split was decided by the presiding judge, the Svea Court of Appeal -- as reported by Sweden's English-language daily The Local -- overturned the Solna court's decision, saying no such probable cause existed. As it turned out, since the audiobooks in question were only accessible through a private login, the association had no basis for arguing that its products were widely available "to the public," the presiding judge ruled.

The Local quotes ePhone CEO Bo Wigstrand as saying after the trial's conclusion, "After all that's been written that we should have released the information, it actually feels really nice that the court has ended up agreeing with what we've said the whole time: that the evidence wasn't good enough."
Meanwhile, a spokesperson for the association expressed shame for the appeals court's decision, saying it "really complicates" its ongoing investigations.