On January 20, the Justice Department closed down the popular cyber-lock website Megaupload and charged its owners with criminal copyright infringement. The website was shut down, and over $39 Million US dollars in company assets were seized by Customs officials in Hong Kong. In a recent interview with a New Zealand television station, Kim Dot Com, the founder of Megaupload, just assumed that his website was not in violation of any law and that at most he would get sued in civil court, not brought up on criminal charges.
Given previous court decisions, such as the famous 2005 Grokster decision, we need to think about whether the company merely is not monitoring their service for infringing material, or if they are actively promoting copyright infringement. The Justice Department is trying many new branches of this theory of infringement in prosecuting Megaupload, causing the commentators at Tech Dirt to scratch their head over what truly is illegal activity. Some might remember that Megaupload was involved in a strange episode with Youtube, where it appears that a video promoting Megaupload was taken down by a rival firm that has long been at odds with Megaupload. While Tech Dirt has some evidence that Megaupload is a small player in the file-sharing battle, and argue that there are other industry practices that do more harm than file-sharing.
Still, this argument is thinner than the near-obsolete compact disc because it is possible to vigorously prosecute infringement and seek out a new content distribution system. All attempts to protect an outdated system will just make people leave the status quo, and all attempts to be disruptive for the sake of being disruptive will result in a status zero with no economic incentive for anyone to create anything new.
Who is Affected
All, legitimate AND illegitimate users of Megaupload are affected. The data stored on those servers might be lost to its users, even if that data was used for non-copyright infringing purposes. There is a controversy over who has current control over the data, with the Federal government saying that they do not have control over the servers, but the hosting company, Carpathia does. Meanwhile, Carpathia Hosting company says that the users should contact Megaupload directlyto inquire about their data. So far it is not exactly known when or if the data stored with Megaupload will ever be released.Over the past month the Justice Department did not simply affect cyberlocker sites, but a wide variety of sites that allegedly promote criminal copyright infringement. Before Superbowl XLVI, the Justice Department seized several websites that illegally stream TV feeds. Some bit torrent sites, like BT Junkie, shut down voluntarily. The Pirate Bay moved their domains from .org to .se and vowed to continue to list possibly infringing material on their website, albeit through magnet links.
PC World has a listing of six file-sharing services that remain open in the wake of Megaupload's take down. Please note that posting copyright-infringing material on these websites will not save you, or them, from the same consequences facing Megaupload.