It’s Day 5 of The Pirate Bay appeal and in the morning the Court showed video of the previously recorded interrogations of Carl Lundstrom, one of the four defendants. In addition the prosecution brought in simple screenshots as evidence, which painfully exposed their technical incompetence.

As on previous days, most of this morning was spent watching material previously recorded during the earlier trial at the District Court. The day started off with the playing of a recording of Carl Lundstrom, one of the four defendants.

In response to a question from prosecutor Håkan Roswall, Lundström admitted that he knew that there was piracy connected with The Pirate Bay, and that he understood that the site is a “file-sharing site, a torrent site”.

Speaking of the advertising strategy, Lundström took responsibility for the plan believing it was a way the site could pay for itself in the future. He went on to say that he had no idea of any political motivations behind the site and what interested him was the desire of the other defendants to make the biggest BitTorrent site in the world.

“And I liked that,” Lundström said.

“I can understand that,” Roswall replied.

The prosecution then moved to a discussion about the hardware that Lundström gave to The Pirate Bay. Lundström made clear that he never wanted to become a partner in the site. He was merely ‘interested’ in the project and gave some advice to The Pirate Bay team a few times.

Lundström was further questioned by the prosecution about his contacts with the Israeli (Oded Daniel), who handled advertising on The Pirate Bay. Lundström admitted to knowing Oded very well.

When movie industry lawyer Monique Wadsted asked Lundström why a 48 year-old businessman hangs out with people from The Pirate Bay, his lawyer jumped in and told his client not to respond.

The only ‘fresh’ news thus far today is that the Israeli businessman didn’t show up in court.

The court went on to show a video of IFPI lawyer Magnus Mårtensson. The court heard that Mårtensson has been working for the IFPI for 15 years, specializing in anti-piracy work.

The IFPI lawyer explained that he worked gathering evidence against The Pirate Bay by downloading various music albums via .torrent files he obtained from the site using Internet Explorer and the Azureus client.

Mårtensson’s technological ability was called into question by the defense lawyers and he acknowledged that it was difficult for him to answer some technical questions.

Furthermore, it quickly became apparent that his evidence consisted only of screenshots. When asked if he had any network equipment logging exactly what was going on ‘behind the scenes’ of any of his sample downloads, he replied that he didn’t.

When asked if he verified in any way during the download process that he had any contact with The Pirate Bay’s tracker, again the answer was negative.

Defendant Gottfrid Svartholm questioned Mårtensson on his evidence gathering techniques. The following questions are particularly interesting as they show that the prosecution has no evidence that the Pirate Bay trackers were actually used.

Gottfrid: Before taking the screenshot, did you turn off DHT and Peer Exchange? Mårtensson: DHT was obviously on. I wanted to be like an average user. Gottfrid: So in other words, you can’t check if the tracker was used? Mårtensson: The tracker address was visible on the screen. From that I assumed it was used in some way. Gottfrid: But since you had DHT on, you have no possibility to state to the court as to whether The Pirate Bay’s tracker was actually used or not? Mårtensson: No.

(TF: It is unbelievable that these simple screenshots were brought in as evidence. In a response, Piratbyran created a screenshot generator that produced similar evidence.)

Mårtensson was further asked if he was aware that Google can also act as a torrent search engine. The IFPI lawer seemed to be unaware of that, and he stated that they never had any problems with Google.

In the afternoon the Court played the recording of IFPI’s John Kennedy who testified in English, through a Swedish translator.

IFPI’s John Kennedy confirmed he was the CEO of IFPI and summarized his duties there, noting the group has 1500 members worldwide and it’s main aims were to ‘improve’ copyright laws through government lobbying and fight piracy around the world since “piracy has done immense damage to the music industry.” Kennedy says that IFPI takes up strategic litigation against various targets worldwide.

Kennedy noted the transition to digital music was a great threat to them, and although more music is currently being consumed than ever before, “less is being paid for than ever before.” If music is available for free, says Kennedy, many people find that temptation too much to resist and new business models can’t flourish.

The discussion then moved to the claim for damages. Kennedy said the claims were “justified and maybe even conservative, since the damage is immense.” Talk moved to the link between the cost of downloading legally and the claim for damages. Kennedy said that for the industry, CDs were more profitable than digital downloads are today.

He said that artists, studio producers, songwriters, music publishers, studio staff and the marketing and promotion people all have get paid and the music industry spends more money than most other industries on R&D. It invests 20% of its revenue on finding new artists and although some suggest that this isn’t needed in the Internet age, they are wrong said Kennedy.

Kennedy went on to explain that music marketing is designed to take effect in “Week One” of an album’s release and in an ideal world a new release would chart at #1 and would reach its sales targets in that first week. But if products are made available on Pirate Bay during that time he said, “then purchases are taken out of the market and because of the illegal use of music, the legal use of music under-performs and in some countries that can have a dramatic effect.”

Kennedy was asked about CD sales in the last 10 years. He said they dropped from $27 billion to $18 billion. He said that the Top 10 CDs in 2001 sold 69 million units and the Top 10 CDs in 2008 sold 46 million units. 9 years ago the #1 record sold 13 million units but in 2008, Coldplay sold half of that.

Kennedy was asked what impact legal downloads have on these figures, but he denied they made up the difference. The music industry has always relied on young people for sales he said, and these same people have got used to using illegal sites. “Many legitimate sites have struggled to compete with free. It’s impossible to compete with free,” said Kennedy.

When put to him that some claim that illegal downloading promotes sales, Kennedy labeled this as old-fashioned thinking and said that people don’t think this way anymore. When asked about P2P providing live performance promotion, Kennedy said that every single live performance success is linked to a previously successful recording career/sales.

When asked about the differences between TPB and Google, Kennedy said there is no comparison. “We talk to Google all the time about preventing piracy. If you go to Google and type in Coldplay you get 40 million results – press stories, legal Coldplay music, review, appraisals of concerts/records. If you go to Pirate Bay you will get less than 1000 results, all of which give you access to illegal music or videos. Unfortunately The Pirate Bay does what it says in its description and its main aim is to make available unauthorized material. It filters fake material, it authorizes, it induces.”

Kennedy says TPB threat is growing all the time. “They are proud of this with their statistics – there are 22 million users, 1 million visitors each day, 1.6 million .torrent files and they say they are responsible for 55% of BitTorrent traffic. They pride themselves on the quality of what they deliver.”

When questioned about the IFPI’s 10X damages multiplier for pre-release material, Kennedy felt this was fair considering the damage it does to the launch of a product. Kennedy says they have teams of experts monitoring the Internet everyday for piracy.

He went on to say that people who download music from TPB spend much less on music than they would otherwise and if they didn’t get it for free they would buy it. “It is common sense, if they couldn’t get it for free they would buy it and when we ask them, they confirm that.”

When asked if downloaders have less money than others, Kennedy said that younger people have the money but just don’t spend it on music anymore. Kennedy said that the reduction in sales in the music industry is directly attributable to illegal downloading.

When asked about scientific research on the issue, Kennedy said that of several reports, only one said there was no causal link between file-sharing and lost sales – all the rest say there is. Discussion of certain reports on the issue took place, with defense lawyers questioning Kennedy on the details of the reports.

The defense lawyers pointed out that in one of the reports Kennedy refers to, lesser known artists appear to be downloaded a lot on TPB but Kennedy said although he is 56 years old, he recognizes nearly all of the artists in the TPB Top 100 list.

Carl Lundstrom’s lawyer asked about the profit on the industry’s $18bn turnover from 2008. “Terrible,” Kennedy replied. Of the big players “..only one company is making a profit.” Kennedy was pushed, if he knows the turnover, why doesn’t he know the profit. He said it was difficult to say.

He was also asked how much of this $18bn turnover is used to fight piracy, Kennedy said there are three main areas of expenditure. Funding the RIAA in US, IFPI globally and more local groups such as IFPI (Sweden). They all have budgets and a large proportion of this is used to fight piracy.

The global amount used by IFPI on lobbying and fighting piracy is £75 million.

Kennedy said he qualified as a lawyer since the 70?s but hasn’t practiced recently. He was asked if he understood BitTorrent. Kennedy said he did, but in “very vague terms.” When the defense lawyers asked more detailed questions, about uTorrent for instance, Kennedy said he’d heard of it but had no idea of the details. It was very clear he knew nothing about any remotely technical issues.

Kennedy was asked if IFPI has taken any action against the actual sharers of the music made available via TPB, as detailed in this case. He said he couldn’t say and didn’t know who these individuals are. He then admitted to not knowing how The Pirate Bay works so the defense lawyers put it to him – if you don’t understand how TPB works, how can you say they are to blame? Again he was pressed why he took no action against the actual sharers but he said he didn’t know and admitted “It’s probably unlikely we took action.”

Kennedy was asked why they haven’t sued Google the same way as TPB. He said that Google said they would partner IFPI in fighting piracy and he has a team of 10 people working with Google every day, and if Google hadn’t announced they were a partner, IFPI would have sued them too.