[x-pubpol] Megaupload Goes to Court: A Primer

[Joly MacFie]

https://www.eff.org/deeplinks/2012/04/megaupload-goes-court-primer

April 4, 2012 | By Julie Samuels
Megaupload Goes to Court: A Primer

Does the government have a responsibility to protect innocent third parties
from
collateral damage when it seizes their property in the course of
prosecuting alleged
copyright infringement? That is the question a federal district court will
consider next
week in the latest skirmish in the legal battle between the U.S. government
and
Megaupload.

When the government shut down Megaupload three months ago, it made it
impossible for
innocent third parties, like our client Kyle Goodwin, to access their data
stored on that
site. Others-like service provider Carpathia-have also voiced legitimate
complaints about
their property getting caught up in the government's dragnet. But the
government has tried
to wash its hands of all responsibility, insisting it doesn't control the
property anymore
and that the court has no authority to intervene. On April 13, a judge in
the Eastern
District of Virginia will hear arguments concerning what should happen with
Mr. Goodwin's
data and Carpathia's servers. Ahead of that hearing, here are some
specifics on who will
be there and what they will argue:

Kyle Goodwin: EFF represents Mr. Goodwin, who owns a business called
OhioSportsNet that
covers local high school sporting events in sports-crazed Ohio. Mr. Goodwin
and his
producers used Megaupload to store and share video files of sports games;
he also backed
those files up on a personal hard drive. As luck would have it, that hard
drive crashed a
few days before the Megaupload shut down, leaving Mr. Goodwin with no
access to the files
he needs to run his business.

Mr. Goodwin has asked the court to set up a process that would allow him,
and others in
the same boat, to access his paid Megaupload account and get those files
back.

Carpathia: Megaupload leased 1,103 servers from Carpathia, which contain
approximately 25
petabytes of data (yes, 25 petabytes!). Carpathia still owns the servers
and has not
deleted the data, despite the government's claims that Carpathia has no
obligation to
maintain that data (more on that below). From the outset, Carpathia has
worked to preserve
users' data, but it claims that "it does not own and cannot access the
data" and, as such,
is not able to return it to its rightful owners.

Because the government has frozen all of Megaupload's funds, Carpathia has
been stuck
eating the costs of maintaining those servers - approximately $9,000 a day.
Carpathia has
asked the court to allow it to repurpose the servers after allowing a brief
period of
access, to require another party to take control of the servers and pay
Carpathia for
them, or to require the parties to pay Carpathia to continue maintenance.

 MPAA: The MPAA claims that its members "are certain to own the copyrights
in a
substantial percentage of the infringing files" stored on Carpathia's
servers. (Of course,
the MPAA does not actually know what's on those servers, but it and its
cohorts never been
afraid to shoot first and investigate later). The MPAA has asked the court
to prohibit
transfer of Carpathia's servers to any third party.

Indeed, the organization insists that even a court-mandated transfer
violates copyright
law, since the servers presumably contain at least some copyrighted
material. You read
that right: the MPAA claims that a transfer of the servers to a third party
(whether or
not that third party could or would access the files on it) would
constitute an
infringement of the copyrighted material on those servers (without regard
to whether the
underlying use was licensed or otherwise a fair use).

The MPAA also expresses concern that Megaupload would obtain the servers
and relaunch its
service in a foreign jurisdiction. We think this unlikely. But, even so,
the courts and
the parties have the power to create a legal framework to ensure this
doesn't happen.

Finally, the MPAA claims that it has no plans to sue individual Megaupload
customers. Yet
without filing a lawsuit and making a case that those customers actually
infringed
copyrights, the MPAA - or the government - has no right to keep their data
from them. So
while we are glad that the MPAA won't be suing Megaupload customers, it is
still
outrageous that it wants to prevent those customers from accessing their
property without
due process.

Megaupload: Megaupload has not filed a substantive brief yet, but we know
that its
attempts to work with the government to preserve the data on Carpathia's
servers have not
been successful.

The Government: We had hoped the government would work with Mr. Goodwin,
Carpathia, and
the other parties to ensure that the innocent folks swept up in this mess
were made whole
again. Unfortunately, the government is doing its very best to avoid taking
any
responsibility in the matter. In its brief, the government argued that it
has no
obligation to help preserve the data on Carpathia's servers. Even more
troubling, the
government argued that the court has no power to order Carpathia or others
to maintain or
return the data (we think the government is wrong on this point, as we
argued in our
brief).

To be clear, as part of its criminal case against Megaupload, the
government has frozen
all of Megaupload's funds. This means that Megaupload cannot pay Carpathia
to turn the
servers back on to allow its customers access to their data. When the
government shut down
Megaupload's business, seized its domains, and froze its funds, it also
deprived Mr.
Goodwin and others of their rightful property. The government should make
those parties
whole again by working with the court, Megaupload, and Carpathia to devise
a process to
get their data returned.

The court will hear arguments next Friday. We will be there to make the
case that Mr.
Goodwin and others like him should get their files back. And we're hoping
that whatever
process the court adopts for doing that can serve as a model in future
cases where the
government seizes websites with third-party content on them, a tactic that
we fear we will
see all too often in the future.

--

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