Robert Bennett to represent Megaupload
Indeed, sites like megaupload.com, known as cyberlockers, can fulfill legitimate needs and are used every day by people looking for an efficient way to share or transfer large files that can't easily be sent by email.
In their indictment, however, federal prosecutors offered a detailed glimpse of the internal workings of the website. They allege that Megaupload was well aware that the vast majority of its users were there to illegally download copyrighted content.
According to the indictment, in a 2008 email chat session, two of the alleged coconspirators exchange messages, with one saying "we have a funny business . . . modern days pirates :)" and the other responds, "we're not pirates, we're just providing shipping services to pirates :)".
In another instance, one of the defendants allegedly laments in colorful language that an episode HBO's "The Sopranos" has been uploaded to site, but the dialogue is in French, limiting its appeal. In fact, prosecutors allege that the entire website was specifically designed to encourage piracy.
The website provided cash bonuses to users who uploaded content popular enough to prompt mass downloads - such content was almost always copyrighted material. Stefan Mentzer, an intellectual property partner with the White and Case law firm in New York, said it's likely that Megaupload will try to argue at least two defenses:
One is that its service qualifies as a so-called "safe harbor" under Digital Millennium Copyright Act - the federal law governing copyright infringement - if they can show, for instance, that they had no actual knowledge that infringing material was on their system.
Another possible defense would be jurisdictional - specifically, that a case can't be brought in the Eastern District of Virginia against a Hong Kong-based company like Megaupload without evidence that they directed criminal activity related to the district.
But Mentzer said both defenses would be a challenge, given the evidence that prosecutors appear to have collected.
"The Department of Justice doesn't just cavalierly file these lawsuits," Mentzer said.
Federal prosecutors have made Internet piracy a priority in the last decade, especially in the Eastern District of Virginia, which can claim jurisdiction over many such cases because large portions of the Internet's backbone - servers and other infrastructure - are physically located in northern Virginia's technology corridor.
The vast majority of those cases have resulted in guilty pleas and prison time.
On Friday, a day after announcement of the Megaupload case, a federal judge sentenced Matthew David Howard Smith, 24, of Raleigh, N.C., to 14 months in prison for his role in founding a website called NinjaVideo. That site was one of many shut down in 2010, at a time when it facilitated nearly 1 million illegal downloads a week.
NinjaVideo was what prosecutors called a "linking site" to Megaupload. Casual users of Megaupload would be unable to find popular movies and TV shows on the site without the proper links.
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