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Today’s Note: Is the Megaupload Case Airtight?

February 17, 2012

Today’s Note revisits the downfall of MegaUpload, a file sharing service that was raided and shut down recently. Its founders and operators were arrested and face potential jail time for their alleged copyright infringement activities. An ArsTechnica article, “Is Megaupload ‘a lot less guilty than you think?‘,” questions the legal merits of the case against MegaUpload CEO Kim Dotcom and others.

The consensus opinion about MegaUpload seems to be that the government is going to pack up the defendants and put them away for a long time. But ArsTechnica talked to at least one legal expert who questioned whether the situation is that clear cut

Jennifer Granick, a Bay Area attorney blogging for Stanford’s Center for Internet and Society, has risen to Megaupload’s defense, calling the site “a lot less guilty than you think.” [italics are added by me and denote a quotation from the article…the link is preserved from the article]

Timothy Lee, a regular contributor on legal topics at ArsTechnica, indicates that Granick made some key points about the case against MegaUpload:

Granick focuses on an issue that didn’t come up much in our earlier discussion: the distinction between civil and criminal law. Traditionally, copyright enforcement has largely been a civil matter—that is, it focused on private disputes between copyright holders and infringers. But in recent years, Congress has increasingly made copyright infringement a criminal matter, getting the federal government directly involved in prosecuting alleged infringers.

Granick also covers some topics related to the validity of the peripheral charges:

She makes a similar point about the conspiracy charges facing Megaupload. Conspiracy is a criminal offense, but the government is effectively charging Megaupload’s executives with conspiring to commit civil copyright infringement. Yet the conspiracy statute “makes clear that the object of the conspiracy must be an offense or fraud against the United States, in other words, a federal crime,” Granick writes. A conspiracy to induce others to commit copyright infringement doesn’t qualify.

The article also cites the opinion of Derek Bambauer, another legal expert. He felt that the government has a stronger case on charges related to direct infringements by the defendants themselves

For starters, under the 1997 No Electronic Theft (NET) Act, direct infringements alone (for example, casual file-swapping by individual Megaupload employees) could get the defendants five to ten years in prison. He noted that in principle, ordinary users sharing infringing works on BitTorrent face similar penalties; the federal government just doesn’t invoke these penalties very often. But when the government wants to, as in this case, it can seek multi-year jail sentences for even casual file-swapping.

That means that the Megaupload principals could wind up serving long jail sentences even if Megaupload is found completely blameless for the infringing activities of its users.

Unsurprisingly, then, Bambauer predicts the defendants will accept a plea bargain agreement rather than take the case to trial.

This is a well written article that explores many aspects of the MegaUpload legal case. If you have an interest in this, I very much recommend the article.

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