Special correspondent Oscar Swartz reports.

STOCKHOLM — The third day of The Pirate Bay trial began in a packed courtroom, and ended with both sides meeting each other at an Italian restaurant by chance.

Unlike U.S. trials, civil and criminal cases are sometimes merged in Sweden. That's the case in the trial of the Pirate Bay, and on Wednesday the government prosecutor took a seat to allow the entertainment industry to begin presenting cases against four defendants associated with the defiant filesharing site. Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde and Carl Lundström face up to two years in prison each, in addition to fines as high as $180,000, for alleged contributory copyright infringement.

Not surprisingly, some of Sweden's top lawyers are involved in the high-profile case, although it was not until Wednesday that we really heard from them. Peter Danowsky, the recording industry lawyer, began by putting The Pirate Bay's bad attitude on trial. He brandished a printout from the website disclosing the Pirate Bay's complaints policy: "All potential complaints from copyright persons and/or lobby organizations will be ridiculed and flaunted on the site."

The defense pointed out that this was not evidence that the Pirate Bay intended to facilitate copyright infringement, and drew the court's attention to the preceding paragraph: "Members of the Pirate Bay represents a broad filesharing public. Hence material you may find offensive might be available.... The only occasion that The Pirate Bay will remove torrents is if the name does not conform with the contents. People should know what they download".

The day was mostly used for arguing "losses." Danowsky claimed that his clients must be compensated, and that the loss should be computed as if each download would have been purchased at the full price that record companies charge.

In addition, he argued, a penalty for damaging the whole industry should be added to the defendants' bill: The Pirate Bay undermines music CD profits, because downloading is simpler than running out to the record store. The torrent site also undermines lawful online sales channels, and make it more difficult to develop new services, he claimed. Finally, he argued that rights holders that had not released their material online should enjoy higher compensation, since pre-release piracy undermines future online sales.

This particularly applied to Let it Be by the Beatles, whose music has not been legitimately available as a download. Danowsky demanded that 130 euro be paid to EMI for each time the album was downloaded through a torrent listed on the Pirate Bay.

On the defense side, a lawyer for 48-year-old Carl Lundström was the most aggressive Wednesday. Lundström is the odd man among the defendants. As heir to the Swedish Wasa Bread empire, he's an independently wealthy and slightly eccentric business man. His detractors point to a past in nationalist politics. Lundström is named in the case because he owned an ISP from which two other Pirate Bay defendants purchased co-location and bandwidth.

Attorney Per Samuelsson, one of Lundström's two lawyers, claimed that his client had nothing to do with running The Pirate Bay, and that he should not be in court. But he also argued that the case is not even close to the copyright infringement matter the prosecutor claims. It should be thrown out, he said, as a matter of law.

MPA lawyer Monique Wadsted speaks to reporters after Wednesday's court proceedings.

Photo: Oscar SwartzAssuming the case is not thrown out in its entirety, he continued, to convict Lundström, the prosecutor must prove that his specific acts contributed in a direct manner to concrete infringements — which for Lundström is ridiculous. Moreover, under Swedish law an intermediary internet service provider is specifically protected from liability when their users perform illegal acts — something that should protect all the defendants. The prosecution should go after the people uploading the content instead.

"And you know who they are," Samuelsson said. "You have shown us screenshots. They have usernames like King Kong and may be anywhere in the world. Those are the guys you should go after!"

The bench in the District Court of Stockholm consists of one professional judge and three lay judges, appointed by the political parties that have seats in the local council. They represent the public and need not have any legal education. The median age among lay judges is 57 in the country. Here we have one white-haired woman with a brooch, one older man with very pronounced white hair and one slightly younger man who takes notes on his laptop.

The general opinion among courtroom spectators, who mostly support The Pirate Bay, is that the tide has already turned against the prosecutor and the plaintiffs. In the first two days the prosecutor's flat presentation of infringed works was so uninspired that a satirical blog promised to release a CD of it as a sleeping aid. More than one of the lay judges seemed to have difficulty keeping their eyes open during parts of the presentation.

And at one point in Wednesday's proceedings, the professional judge asked the prosecutor and plaintiffs if they would accept an intermediate acquittal for the charges that were dropped Tuesday. They did not object.

But after the court adjourned, Monique Wadsted, the Motion Picture Association's lawyer, expressed confidence in her case. She said that the partial acquittal would not affect a damage award.

That's assuming the defendants are convicted, of course. Because the trial combines civil and criminal cases, an acquittal on the criminal charges would mean the civil plaintiffs get nothing, according to tort law professor Mårten Schultz of Stockholm University.

When the courtroom drama and press conferences were over, I was invited to join three of the defendants (all but Lundström) for lunch, along with a documentary filmmaker who has followed the Pirate Bay crew for months.

They had difficulties agreeing on a lunch spot, because Peter Sunde is a vegan, while Fredrik Neij is the opposite and adamantly refused a proposed Japanese restaurant, claiming that "anything that smells like fish is out of the question. I need real meat".

They finally settled on an Italian place, and high spirits restored, Neij began discussing his economic prospects. He was told he will get a tax-free cash grant from the state for each day he has to appear in court. "Wow, that's much more than I have ever kept as an employed technician!" he said.

Peter Sunde (left) and Fredrik Neij at lunch, trailed by documentary filmmaker.

Photo: Oscar SwartzThen Svartholm suddenly stood up and exhorted everyone to hurry with their lunch, because they had to be back in court in 15 minutes. The more organized Sunde sighed. "Gottfrid! The proceedings were adjourned until tomorrow. Don't you ever listen?"

At that moment, Danowsky, the MPA's Monique Wadsted and all the other hard-hitting content-industry lawyers and their assistants sauntered right into the same Italian eatery.

It could have been a tense moment, but the Pirate boys cracked jokes with them, and the lawyers responded with good humor. You wouldn't know that they'd been on opposite sides in the courtroom less than an hour ago, or that earlier in the week Wadsted was waging a public relations war on the group.

One Wadsted statement in particular made headlines here. Taking on Pirate Bay's Robin Hood image, Wadsted claimed that the prevailing opinion among Swedish teenagers is that filesharing is wrong. "They have been very skilled in romanticizing the picture of themselves," Wadsted claimed. "They have a small, dedicated group around them but apart from those there are very few who knows or even cares about who they are."

And as the Pirate Bay crew finished lunch and got up to leave, a young waiter pointed to Sunde and shouted: "We are with them!"