Appeal court reverses district court decision in first enforcement directive case

The Svea Court of Appeal recently reversed a district court’s decision in the first Swedish case involving the EU IP Rights Enforcement Directive (2004/38/EC). The district court had previously ordered internet service provider ePhone to provide information regarding the identity of the individual behind a specific internet protocol (IP) address to five book publishers. According to the publishers, the IP address in question had been used for the illegal distribution of 27 audio books over the Internet. The appeal court ruled that ePhone should not be obliged to hand over the requested information.

In its decision the appeal court started by dismissing ePhone’s claim that the court should request a preliminary ruling from the European Court of Justice. Further, the appeal court agreed with the district court’s decision to dismiss ePhone’s arguments that the Swedish legislation regarding the order to provide information was in violation of the European Convention on Human Rights and the EU Data Retention Directive (2006/24/EC).

Regarding the question of whether the publishers had shown probable cause that infringement had been committed from the IP address in question, the court declared that the audio books had been stored on a file transfer protocol server, which allows the transfer of files between computers over the Internet, and stated that the purpose of storing files on such a server is generally to make the files available to others. However, in order to access the files on this specific server, a password was required. The publishers had presented no information regarding how a person could obtain the password or the extent to which the password had been spread. Hence, the court found that no conclusions could be drawn regarding the size of the circle of people with access to the files or regarding the purpose, character or terms of admission to this circle. It so held despite:

• the fact that the audio books were bestselling books implied that the circle was not limited to a group of people with a special interest; and 
• certain evidence implied that thousands of audio books were stored on the server.

The appeal court found that under these circumstances it should be assumed that the audio books on the server had been made available only to a closed circle of people, and not to the public, and therefore that the publishers had not shown probable cause that copyright infringement had been committed. Therefore, the appeal court reversed the district court's decision to order ePhone to hand over the requested information.

Two members of the appeal court dissented and wanted to affirm the district court's decision. In their opinion there was sufficient evidence to show probable cause that the circle of people with access to the files had not been a closed circle, namely:

• the storage of a large number of files on a file transfer protocol server (which, according to these two members, could have no purpose other than sharing the files with others);
• the fact that the security codes of the files had been forced;
• the character of the audio books; and
• the fact that certain evidence implied that a great number of audio books were stored on the server.

The publishers have appealed the decision of the Svea Court of Appeal to the Supreme Court.