U.S. Copyright Infringement – U.S. Strikes in New Zealand

On Friday January 20, two helicopters and “76 police staff, including armed offenders squad members” raided the home of Kim Dotcom north of Auckland, New Zealand. He was sought by the U.S. for copyright infringement and racketeering under an indictment from the U.S. District Court of Virginia, Eastern Division. Three associates were also arrested.

The issues of whether links to documents can be copyright infringement, acts that preclude DMCA safe harbor, and barring legitimate users from their files may be resolved as two legal teams—the U.S. Department of Justice and a yet to be named legal team representing “the Mega Conspiracy” in the U.S.—clash in Virginia These are issues that will affect colleges and universities because of the similarity between these sites and the way some students use the Internet.

Under the indictment the U.S. seized, without notice, “The following domain names: Megastuff.co; Megaworld.com; Megaclicks.co; Megastuff.info; Megaclicks.org; Megaworld.mobi; Megastuff.org; Megaclick.us; ageclick.com; HDmegaporn.com; Megavkdeo.com; Megaupload.com; Megaupload.org; Megarotic.com; Megaclick.com; Megavideo.com; Megavideoclips.com; Megaporn.com.” Kim Dotcom is associated with the website called Megaupload, based in Hong Kong. A Palo Alto Networks study found 57% of their sample or organizations use Megaupload.

The 72 page indictment describes the processes and pricing in detail to support its conspiracy argument. The indictment is available here.

The New Zealand police made clear “The men have not been charged by police in New Zealand and are being held in custody on the warrant issued by the U.S. Government.” This is similar to the U.S. request to extradite Richard O’Dwyer, a student at Sheffield Hallam University in the U.K., even though most believe that his website was legal under British law.

The New Zealand police completed their search on Saturday “seizing assets such as luxury cars and artwork, as well as computers and documents as evidence.” The New Zealand Herald reported that Detective Inspector Grant Wormald “confirmed that the team of four FBI staff working on the searches would also continue to do so ‘for the next few days.’”

This case again brings up two issues. What actions must a website take to identify and remediate materials infringing copyright? Mega argues it provided a “cyberlocker” which is a private data storage provider. If there is infringing content, Mega would be unaware of it since uploaded files are not reviewed for copyright infringement (which for some users would be in invasion of privacy). This is similar to college and university websites that are unaware of all of the content stored by students and faculty. The U.S. argues a website should know if there is infringing content.

This also brings up the issue of whether links to copyrighted files are themselves copyright infringement as the U.S. argued in the U.K.

In an interview with CNET, Ira Rothken, an attorney [representing those arrested] well known in the tech sector for defending Web sites accused of copyright violations, said that his clients “are assembling a team of crack copyright, criminal and technology attorneys to defend them in courts across the globe.”

“There are significant issues of due process,” Rothken said early this morning. “The government has taken down one of the world’s largest storage providers and have done so without giving MegaUpload an opportunity to be heard in court.”

Mark Lemley, Davis S. Levine and David G. Post commented on due process in their article “Don’t Break the Internet” published in the Stanford Law Review.

The procedures [this month being implemented by the courts without the referenced SOPA and PIPA legislation] fail this fundamental constitutional test. Websites can be “completely removed from circulation”—rendered un- reachable by, and invisible to, Internet users in the United States and abroad— immediately upon application by the government, without any reasonable opportunity for the owner or operator of the website in question to be heard or to present evidence on his or her own behalf..

Eric Goldman, University of Santa Clara Law School, commenting on Deckers v Liyanghua wrote:

Ex parte orders regarding foreign alleged infringers are out of control. Without sufficient regulation and without any adversarial pushback, rightsowners have learned that they can ask for ridiculous relief on an ex parte basis and get a judge to sign off on most or all of it. It’s clear that rightsowners are asking for way more than the law allows, but judges seem to acquiesce. The results are two fold:

1) the rightsowners are taking control over third-party domain names on an ex parte basis and with questionable notice given to the domain name registrants

2) worse (IMO), judges are issuing orders that purport to bind third-party non-litigants, such as domain name registrars, search engines and shopbots.

Although few stored their files on the Megaupload computers, seizing the domain names meant the users storing this work files would not have access unless they knew how to access their files without a URL. The FBI was silent on the issue.

Using “cyber lockers” to store personal files carries a risk for the unaware.

Subsequently TorrentFreak reported: “Filesonic, one of the Internet’s leading cyberlocker services, has taken some drastic measures following the Megaupload shutdown and arrests last week. … the site has disabled all sharing functionality, leaving users only with access to their own files.” The site is among the top 10 file-sharing sites on the Internet, with a quarter-billion page views a month.

These actions suggests colleges and universities consider making their faculty and students aware their domain name can be seized without notice eliminating links to websites content.  It may be helpful to suggest faculty and students to store critical files on personal storage devices.

Although losing a domain name should be rare, copyright owners may disagree.

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Jim Farmer is an engineering economist at instructional media + magic inc. His interests include educational technology, academic research, and information standards. He also writes for Intellectual Property Magazine. For more information, see his profile page.
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