Illegal file-sharers fined for first time in Britain

The record industry has claimed a landmark victory in its multimillion-pound battle against illegal file-sharers.

In the first ruling of its kind in Britain, revealed yesterday, the High Court found that two men acted unlawfully when they swapped music over the internet.

The British Phonographic Industry, which brought the civil case, said the decision would send a clear warning that the practice must stop and those who continue face court and heavy fines.

It is claimed that illegal file-sharing of top artists, such as Beyoncé, Mariah Carey and Eminem, is threatening the future of the music industry and is responsible for the collapse in the sale of singles.

The two men, neither of whom have been identified, are among five individuals accused of making 8,906 songs available to millions around the world. The other three civil cases remain pending.

In summary judgments the court rejected the defence of the first man, from King's Lynn in Norfolk, who claimed there was no direct evidence against him. He was ordered to pay £5,000, with costs estimated at £13,500 and damages yet to be assessed.

The other defendant, a postman from Brighton, claimed he was unaware he was doing anything wrong and did not seek to gain financially. Mr Justice Lawrence Collins ruled that "ignorance is not a defence", and ordered him to pay £1,500, with further costs and damages pending.

The BPI has settled the majority of the 139 legal cases it has launched against individual file-sharers since October 2004, with some paying up to £6,500 to avoid court. However dozens are refusing to pay. The industry hopes that the ruling will convince them to settle before the deadline on 31 January.

The BPI chairman, Peter Jamieson, said: "The courts have spoken and their verdict is unequivocal: unauthorised file-sharing is against the law. We have long said that unauthorised file-sharing is damaging the music industry and stealing the future of artists and the people who invest in them. Here is clear confirmation of what we also said - that unauthorised file-sharing is illegal."

Roz Groome, general counsel for the BPI, described the rulings as a "massive step forward". She said: "We have been very patient litigators. We have given these people every opportunity to settle. Only when they refused to settle did we take them to court, which has now found in our favour."

The global music industry is embroiled in a bitter struggle against the file-sharers. As well as promoting legal downloads - sales topped $1bn (£560m) last year, up 357 per cent - record companies have launched 20,000 legal cases in 17 countries. They believe the tide is slowly turning in their favour as the number of illegal downloads has remained static despite a massive increase in the take-up of high-speed broadband connections.

The hard core of uploaders in the UK is thought to number in the hundreds, possibly thousands, with 75 per cent of all file shares being swapped among 15 per cent of users.

Part of the BPI's strategy has been an attempt to spread the word among internet communities that file-sharing is illegal. It has also supported the implementation of Digital Rights Management (DRM).

These technologies typically prevent consumers from moving content between devices such as MP3 players and limit how the content can be used. Critics claim DRM limits the rights of consumers and breaches civil liberties.

Downloading: how it works

Music file-sharing boomed as the internet spread around the world. It allowed people with access to a personal computer and a high-speed internet connection to listen to music without paying. It also allows for the free sharing of films, games, images and software. Unlike the early file-sharers or legal download sites such as iTunes where content is stored in a central server, the system works by allowing individual computers to communicate with each other direct. Users build peer-to-peer (P2P) file-sharing networks allowing access to each others' collections. Contact is made through programmes such as Kazaa, Grokster, eDonkey and iMesh. These can be located by simply typing the name into an internet search engine. The software connects the user with other people running the same software all over the world. Files can be located using sophisticated browsers which scan other users' collections and downloaded for free. Meanwhile, files can be simultaneously uploaded using the same system. The industry has concentrated its effort on tracing users via their computer's IP address - the unique number attributed to any device using the internet. Record companies then go to court to force internet service providers to reveal the identity of illegal file-sharers.