US tells court Megaupload users are out of luck

Blame Megaupload if you stored legal documents on the cyberlocker service and now may not be allowed to retrieve them, according to the US Government.

Megaupload founder Kim Dotcom
(Credit: 3 News)

Neil MacBride, the US attorney for the Eastern District of Virginia who in January shut down Megaupload, after accusing founder Kim Dotcom and six other company managers of criminal copyright violations, asked a federal court in documents filed last night to deny a request for a protective order filed by Carpathia Hosting, which houses Megaupload's user data.

Carpathia wants the court to help pay the costs of preserving Megaupload's data, which it claims is more than US$500,000 and growing, or protect Carpathia from civil claims, should it decide to delete the information. Carpathia has said that in most cases where a customer can no longer pay for service, the servers are wiped and used elsewhere. Should that happen in this case, potentially millions of former Megaupload users around the world would lose data — though how much content was legally obtained is unclear.

MacBride told the court that the government relinquished any claim to Megaupload's data in January and that Carpathia, on its own, decided to maintain the information at its own expense. MacBride suggested that Carpathia did that because of possible civil lawsuits it could face, if managers deleted the information. MacBride not only was dismissive of Carpathia's claims about the financial burden associated with maintaining the data, but he reminded the court that this is a criminal matter, not a civil case.

MacBride says whatever happens now to Megaupload's data should not be the court's concern. He seems to suggest that if Carpathia sells the servers or deletes them, so be it.

MacBride's office declined to comment beyond the court filing. His response follows those filed by the Motion Picture Association of America, the trade group for the six top Hollywood film studios; Kyle Goodwin, a former Megaupload user who wants his lawful video returned to him; and Megaupload.

The MPAA initially wanted the data preserved, in case it chose to file civil suits against Megaupload in the future. The trade group also said in its response file that it wanted to make sure that pirated movies and TV shows stored on Megaupload's servers aren't circulated again.

As for MPAA's fears that the material — which it believes is mostly pirated movies and TV shows — could end up being unlawfully distributed again, MacBride says he shares those concerns but doesn't offer any remedy. He did note in the court documents, however, that he has learned from unidentified sources that Megaupload's servers may contain child pornography. He says that if those allegations prove to be true, this would further complicate any transfer of ownership.

The Electronic Frontier Foundation (EFF), the tech advocacy group representing Goodwin, wants the court to allow users who stored lawful information on the service to be able to retrieve their materials. Megaupload says it needs the data on the servers for its defence.

"The 'innocent user' concerns articulated by Carpathia — and expanded upon in the supporting brief of Kyle Goodwin — appear to be undermined by Megauupload.com's own terms of service," MacBride wrote. Users were cautioned "not to keep the sole copy of any document on Megaupload.com, and stated that Megaupload.com's duty to preserve data ends when, at its sole discretion and without any required notice, Megaupload.com ceases operations. While Mr Goodwin's situation is unfortunate, it is not a matter to be resolved as part of the criminal case".

The government's position didn't sit well with Julie Samuels, an EFF staff attorney. She said what's at stake aren't arcane legal arguments but people's private property.

"I find the government's position disturbing," Samuels said. "What we're talking about are innocent third parties whose property rights are being compromised. I think the government should spend a little more time being concerned about that."

EFF wants some kind of system set up that enables former users to retrieve legal files from Megaupload's servers. Samuels said it's her understanding that this system can't be built without the help of Megaupload's engineers, as they are the only ones with enough knowledge of their system to make it work.

One thing MacBride doesn't appear to have to worry about is Megaupload reacquiring the servers. Ira Rothken, Megaupload's attorney in the United States, told CNET that he had cut a deal with Carpathia to buy the servers for a little more than US$1 million. The agreement was scrapped when the government refused to release any of the money seized from Megaupload.

"Megaupload believes that the United States is required to preserve the server data as it is core evidence in both pending civil and criminal cases," Rothken said in an email. "The Mega defence will be unfairly harmed without it. The United States, with all its resources, fails to point out in their brief that private content owners have already sued Megaupload for civil copyright infringement and that the server data is relevant to such civil claims and ought to be preserved for the litigants in that case.

"Megaupload did not have a fair opportunity," Rothken continued, "to preserve the server data since the US froze its funds and Mega couldn't then afford the services of a qualified e-discovery vendor to mirror the 1000 or so servers — thus only two servers were mirrored in contemplation of the day when money would be freed up to mirror the rest of the servers."

A hearing in US District Court for the Eastern District of Virginia is scheduled for next Friday.

Via CNET



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