Swedish Supreme Court confirms that domain names constitute property that can be seized by the state

The saga behind the decision I am going to report on first started in April 2015, when prosecutor Fredrik Ingblad directed claims against Fredrik Neij (one of the creators of The Pirate Bay) in an effort to disrupt the operation of The Pirate Bay website in Sweden.

Ingblad also filed a complaint against Punkt SE (IIS), the organisation responsible for Sweden’s .se top-level domain. Mr Ingblad argued that the domains ‘ThePirateBay.se’ and ‘PirateBay.se’ were used as “tools” to aid and abet copyright infringement and should therefore be seized by the Swedish state.

Section 53 a § of the Swedish Copyright Act (SCA) states that property used or being used for crimes regulated in the SCA may be seized to prevent further crimes. The same applies to property that is intended for use as a tool in connection with such activities.

The Stockholm District Court (2015) and the Court of Appeal (2016) had found that domain names must be viewed as a form of property and are therefore eligible to fall under the SCA. 

Since the domain names were used as identifiers of the well-known sharing service The Pirate Bay, both courts had held that the domain names should be subject to forfeiture and thus transferred to the Swedish State.

Importantly, since the domain names are considered a type of property, the owner of that property – being Mr Neij - is responsible for the activity over its services.  ISS was not regarded as the domain name proprietor because it only exercised an administrative function over the domain names (organising the database, taking out fees etc.), as opposed to having an exclusive right over it.

Prosecutor Fredrik Ingblad

Fredrik Neij appealed the Court of Appeal decision to the Swedish Supreme Court, arguing that the domain names do not constitute property under Section 53 a § of the SCA.

The judgment of the Swedish Supreme Court

Last month the Swedish Supreme Court confirmed that the two domains can indeed be seized by the state. The (relatively short) judgment essentially tackles two main issues:

(1)  Whether the domain names constitute a form of property in light of Section 53 a § SCA

Domain names are not really regulated under Swedish law and the available framework is primarily of international nature. That being said, in order to determine whether domain names are a form of property, the Supreme Court sought guidance from jurisdictions such as Norway, Denmark and case law of the European Court of Human Rights. Concluding that these courts have opined in favour of seizure of domain names, the Supreme Court held that:

·       the possession of a domain name can be of monetary value for the proprietor;

·       it entails an exclusive right by being having the option of transferring it; and  

·       in some respects, it fulfils a function similar to that of a trade mark.

It was therefore clear that domain names should be recognised as a form of property.

(2)  Whether domain names can be used to aid and abet copyright infringement

Under Section 53 a § SCA, property used to aid and abet crimes against the SCA may be forfeited to prevent further crimes. Following on the previous point, the Supreme Court held that domain names can be indeed used to aid and abet the commission of crimes, and it is not required that the tools used to this end are of any particular type.

A more robust set of enforcement tools in Swedish IP cases

This case is relevant because it confirms the possibility of forfeiture of domain names. It also provides rightholders with an additional possibility to counter the struggle against widespread online copyright infringement. Readers may in fact remember that not long time ago the Swedish Patent and Market Court of Appeal issued the first blocking injunction in the Swedish context, ordering a major ISPs to block access to The Pirate Bay.

Overall, different tools seem now available to rightholders wishing to enforce their rights in this jurisdiction. As regards the efficacy of the various options, it is worth recalling the assessment undertaken by Mr Justice Arnold in his decision in Cartier [here], who considered that there might be scenarios in which domain name seizure might have some value while blocking orders remain probably the most efficient measure.