Founded in 2002, Swiss-based RapidShare was one of the first and most popular one-click file-hosting services on the Internet.
Like most sites of this nature, RapidShare was frequently used by people to share copyright-infringing material. It was a relationship that got the company into trouble on multiple occasions.
RapidShare fought many legal battles with entertainment companies seeking to hold the company liable for the actions of its users, and to top it off the site was called out by the U.S. Government as a “notorious market.”
In response, the company implemented a wide variety of anti-piracy measures. These seemed to work but as a result, RapidShare’s visitor numbers and revenues plunged, eventually costing most of RapidShare’s employees their jobs.
Early 2015 the company decided to quit its business. RapidShare shut down, giving users a few weeks notice to secure their files.
While the site is little more than a distant memory for many people, it remained in sight of Swiss law enforcement. Following up on several complaints from rightsholders, including several academic publishers, the site’s founder, his wife, and one of RapidShare’s former lawyers went on trial this week.
The public prosecutor of the court in Zug, Switzerland, accuses the three executives of “commercial misconduct by multiple offenses against copyright.” The proceedings started on Wednesday and are scheduled to take a total of four days.
RapidShare’s founder prefers to remain silent. “I really do not want to make any statements,” the 38-year-old said at the start of the trial, Bote reports. Most of the talking was done by the company’s former lawyer instead.
According to the prosecutor, RapidShare’s business prioritized profit over copyright, and the three defendants are accused of assisting copyright infringement.
The founder and the two other accomplices were in a position to prevent copyright infringements but failed to do so appropriately, according to the prosecution. As such, they are all liable and subject to high fines.
During the hearing, the judge asked how RapidShare’s filtering system worked. The company’s former lawyer explained that, following a takedown notice, files could no longer be reuploaded. When the judge asked whether this would still be the case when the filename changed, the lawyer said no.
At that point, RapidShare’s founder broke his silence. He jumped in to clarify that, in addition to the name, the file itself also had to be changed in order to bypass the filter.
Whether RapidShare’s executives are eventually held liable or not, the company was certainly profitable. Documents reveal that in 2009 alone, RapidShare’s gross dividend was 47 million Swiss francs, the equivalent of nearly $49 million.
With this in mind, the damages amount of 190,000 francs ($197,000) requested by the copyright holders is relatively mild. In addition to the damages, the prosecution also demands several hundreds of thousands of francs in fines.
While RapidShare is long gone, the present case could have an effect on other hosting services. As Tarnkappe points out, this includes Uploaded.net, which is also based in Switzerland.
This was also confirmed by renowned Swiss IT lawyer Martin Steiger.
“Depending on the ruling, service providers’ liability in Switzerland would be strengthened in favor of the providers or the rightsholders,” Steiger told local press.
After two days of trial, the case will continue next week. The last hearing day is set for the week after.
Update December 2018: The verdict is not expected to arrive before 2019, Tarnkappe reports.