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Alleged conspiracies and safe harbour technicalities dominate MegaUpload’s Supreme Court hearing

By | Published on Wednesday 12 June 2019


As expected, the latest MegaUpload court case – this time in New Zealand’s Supreme Court – has so far focused on the quantity of infringing content stored on the old MegaUpload platform, the degree to which the site’s management encouraged and profited from that infringement, and whether the good old copyright safe harbour provides any sort of protection from liability for said management team.

The US government is still trying to extradite MegaUpload founder Kim Dotcom and some of his former colleagues to face charges of criminal copyright infringement in an American courtroom, of course. That extradition process has now been underway for more than seven years and – although at each stage judges have ruled that there is a sufficient case against Dotcom et al to warrant extradition – the appeals process is not yet exhausted.

Both sides have already presented their key arguments to the Supreme Court judges since the case got underway in the top court at the start of the week. A legal rep for Dotcom talked a lot about the safe harbour, arguing that when safe harbour protection for internet providers was inserted into New Zealand copyright law, law-makers intended companies like that formerly run by his client to be protected.

The main MegaUpload file-transfer service was just like Dropbox, lawyer Ron Mansfield said, and sister site MegaVideo was just like YouTube. Those sites enjoy safe harbour protection – so that they cannot be held liable for the copyright infringement of their users – which means Team Mega should be protected from liability as well.

According to the New Zealand Herald, Mansfield told the court: “Megaupload, its technology and the service it provides, would probably be similar to Dropbox. It’s a service where you can store your electronic files or you can use it to transfer your electronic files from … person to person. You, the user, decide if you’re simply storing it or making it available to another. That, in a nutshell, is Megaupload. Megaupload, like Dropbox, can be used for non-infringing use or for infringement”.

These are not new arguments by any means. American prosecutors argue that while, in theory, a site like MegaUpload might enjoy safe harbour protection – in both New Zealand and the US – the alleged conduct of the MegaUpload management, specifically incentivising users to share more infringing content, means any safe harbour protection falls away.

When asked about the MegaUpload terms and conditions which said users must not upload copyright infringing material, legal man Kieran Raftery, representing US prosecutors, said those terms were a “sham”. MegaUpload management were, in fact, he said, involved in a clear conspiracy, rewarding users who uploading infringing content, and then charging membership fees to others who wanted to access that content in full.

In just a few years, Raftery then alleged, the MegaUpload team built an unprecedented infringement operation. “When it comes to copyright infringement, the advent of the internet has changed the landscape considerably”, he told the court. MegaUpload signed up 180 million users during its seven years in business. “That is the sort of figure that would have made copyright infringers of the 19th and 20th century all green with envy”.

Of course, the NZ Supreme Court is not actually charged with the task of finding Dotcom et al guilty – or not – of criminal-level copyright infringement. It just needs to decide whether or not the conspiracy to defraud the entertainment business that MegaUpload is accused of conducting is sufficient to justify extradition under New Zealand’s treaty with America.

Or for one of the accused, whether or not he was even involved in any alleged conspiracy in any meaningful way. Among all the talk about safe harbours and conspiracies, one lawyer, working for former MegaUpload marketing man Finn Batato said that his client should be distinguished from his ex-colleagues. He wasn’t a shareholder in the business, barrister Anthony Rogers argued, again according to the Herald. Moreover, “there is no evidence he did anything other than [what] any employee is his position would do”.

The case continues.