“We’re just like YouTube,” Megaupload lawyer tells Ars
By Nate Anderson | Published about 22 hours ago
Megaupload’s US attorney, Ira Rothken, has a succinct description of the US government case against his client: “wrong on the facts and wrong on the law.”
The week has been a busy one for Rothken, a San Francisco Internet law attorney who has previously represented sites like isoHunt and video game studios like Pandemic. When I call, he’s eating crab cakes and waiting for yet another meeting to start, but he has plenty of time to attack the government’s handling of the Megaupload case.
In Rothken’s words, the government is acting like a “copyright extremist” by taking down one of the world’s largest cloud storage services “without any notice or chance for Megaupload to be heard in a court of law.” The result is both “offensive to the rights of Megaupload but also to the rights of millions of consumers worldwide” who stored personal data with the service.
(more at the link above …)
Why the feds smashed Megaupload
The US government dropped a nuclear bomb on “cyberlocker” site Megaupload today, seizing its domain names, grabbing $50 million in assets, and getting New Zealand police to arrest four of the site’s key employees, including enigmatic founder Kim Dotcom. In a 72-page indictment unsealed in a Virginia federal court, prosecutors charged that the site earned more than $175 million since its founding in 2005, most of it based on copyright infringement.
As for the site’s employees, they were paid lavishly and they spent lavishly. Even the graphic designer, 35-year-old Slovakian resident Julius Bencko, made more than $1 million in 2010 alone.
The indictment goes after six individuals, who between them owned 14 Mercedes-Benz automobiles with license plates such as “POLICE,” “MAFIA,” “V,” “STONED,” “CEO,” “HACKER,” GOOD,” “EVIL,” and—perhaps presciently—”GUILTY.” The group also had a 2010 Maserati, a 2008 Rolls-Royce, and a 1989 Lamborghini. They had not one but three Samsung 83″ TVs, and two Sharp 108″ TVs. Someone owned a “Predator statue.” Motor bikes, jet skis, artwork, and even 60 Dell servers could all be forfeit to the government if it can prove its case against the members of the “Mega Conspiracy.”
The case is a major one, involving international cooperation between the US, Hong Kong, the Netherlands, the UK, Germany, Canada, and the Philippines. In addition to the arrests, 20 search warrants were executed today in multiple countries.
No safe harbor for you
Going after Megaupload, one of the most popular sites in the world and one that uses a surprising amount of corporate bandwidth, might seem a strange choice. (As an example of its scale, Megaupload controlled 525 servers in Virginia alone and had another 630 in the Netherlands—and many more around the world.) For years, the site has claimed to take down unauthorized content when notified by rightsholders. It has registered a DMCA agent with the US government. It has created an “abuse tool” and given rightsholders access. It has negotiated with companies like Universal Music Group about licensing content. And CEO Kim Dotcom sent this curious e-mail to PayPal in late 2011:
Our legal team in the US is currently preparing to sue some of our competitors and expose their criminal activity. We like to give you a heads up and advice [sic] you not to work with sites that are known to pay up loaders for pirated content. They are damaging the image and the existence of the file hosting industry (see what’s happening with the Protect IP Act). Look at Fileserve.com, Videobb.com, Filesonic.com, Wupload.com, Uploadstation.com. These sites pay everyone (no matter if the files are pirated or not) and have NO repeat infringer policy. And they are using PayPal to pay infringers.
But the government asserts that Megaupload merely wanted the veneer of legitimacy, while its employees knew full well that the site’s main use was to distribute infringing content. Indeed, the government points to numerous internal e-mails and chat logs from employees showing that they were aware of copyrighted material on the site and even shared it with each other. Because of this, the government says that the site does not qualify for a “safe harbor” of the kind that protected YouTube from Viacom’s $1 billion lawsuit.
(more at the 2nd link above …)