The charge dropped from the case was assisting copyright infringement. The four, however, still face the lesser charge of making available copyright material.

Prosecutors said the action does not change compensation claims or the core charges against The Pirate Bay operators. "It simplifies the prosecutor's case by allowing him to focus on the main issue, which is the making available of copyrighted works," said Peter Danowsky, attorney for the music companies involved in the case.

The Cost of Copyright Infringement

The four individuals were charged with contributing to copyright infringement by distributing copyrighted material through The Pirate Bay Web site. The Pirate Bay is the world's larges BitTorrent tracker and has 3.4 million registered users. As of January, The Pirate Bay displayed 1.6 million torrent files linking to movies, music and other media, according to the IFPI, which represents the worldwide recording industry and includes Sony Music, Capital Music, and Universal Music Group.

The case began when The Pirate Bay was raided in May 2006 by Swedish police, who confiscated the servers. In January 2008, the four defendants were charged with copyright infringement. Music companies are seeking 2.2 million Euros (US$2.8 million), but that amount is only based on 23 music files selected as the basis for the case. The film industry, however, wants 10.9 million Euros (US$13.7 million) in damages for four movies and one television show.

The music industry says The Pirate Bay's actions take a huge toll on business. Revenue losses were 5.4 billion Swedish Kronas (US$612.5 million) in 2006, according to the Value Formation and the Lund Institute of Technology.

The Institute for Policy Innovation said in a 2007 report that global music piracy causes $12.5 billion in economic losses each year. That loss includes 71,060 U.S. jobs, $2.7 billion in workers' earnings, and $422 million in tax revenues.

Laughing in Court

Prosecutors have been building a case by presenting evidence that the four defendants planned a business to make substantial revenues. Prosecutors plan to show the court a signed agreement between the four to share the proceeds from advertising revenue and offshore bank accounts. (continued...)

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