Megaupload To DOJ: You Don't Get To Make Up The Rules That Suit You

from the rules?-where-we're-going... dept

Yesterday, we wrote about the US Justice Department arguing that there's no problem with the fact (which it admits) that it did not and could not properly "serve" Megaupload as a corporation, since it has no US presence, arguing that as long as it generally makes an effort to do so, and also promises to really serve the company once its execs are extradited to the US, it's perfectly fine. Megaupload has now hit back by pointing out that the DOJ appears to be making up the rules that it would like to exist, rather than following the rules that do exist.

The Government bears the burden of proving that it has validly served Megaupload within the letter of the Rule... and effectively concedes it cannot carry it. So the Government instead urges this Court to rewrite the Rule. It specifically puts forth three alternative arguments that no federal court has ever accepted, as far as we are aware, and for which it cites not a single relevant precedent.

First, the Government argues that, because Megaupload is aware of these proceedings and purportedly had “minimum contacts” with the United States, the Rule has no application. By this argument, the entire Rule can be disregarded wherever the Government deems it unnecessary or perhaps unduly burdensome. Second, the Government contends that, even if it must otherwise conform to the Rule, it may disregard the latter portion of the corporate-service requirement and decline to mail the summons to Megaupload. With this argument, the Government would read out of existence the express mailing requirement of Rule 4(c)(3)(C). Finally, the Government argues that, to the extent it must nod at Rule 4’s mailing requirement, it may ignore the Rule’s express prescription and simply send the summons to an address of its choosing. Here, the Government goes so far as to claim it can deliver the summons to Megaupload’s address in Hong Kong, even though that approach would essentially strike Rule 4(c)(3)(C)’s requirement that the summons be mailed to the company’s “last known address within the district or to its principal place of business elsewhere in the United States.”

But... but... you don't understand. Since the MPAA and RIAA explained to the DOJ that Megaupload is evil and Kim Dotcom is a real life super villain, the rules don't matter, right?

Filed Under: jurisdiction, justice department, new zealand, rule of law, service, us
Companies: megaupload

Pro-Copyright Judges Never Drop Cases Over Conflicts, So Why Does Megaupload Judge Have To Step Down?

from the doesn't-make-sense dept

This isn't a huge surprise, but yesterday, we wrote about some comments by Judge David Harvey in New Zealand concerning region coding on DVDs and the New Zealand/US negotiations over the TPP agreement. None of this had anything to do with Megaupload or the Dotcom case, but at one point he referred to a tweet that did a slight satire on the famous saying, and noted that "we have met the enemy and he is [the] US." The press was already blowing this out of proportion -- suggesting, totally incorrectly, that he had "called the US an enemy" when it came to copyright law. That's not true at all. Beyond the fact that he was paraphrasing a common saying in a clearly hyperbolistic manner, the issue he was talking about was very specific to anti-circumvention issues related DVD region coding, and nothing, whatsoever to do with the direct issue in the case.

That said... as many people are noting, Judge Harvey, recognizing the press furor about all this has stepped down from the case and will allow another judge to pick up the extradition issue down the road. This is unfortunate, as Judge Harvey is noted as one of New Zealand's key internet law experts, who really understood these issues at a deep level. Still, it's unclear if this change will have a huge impact on the case. The judge taking over for Harvey, Judge Nevin Dawson, has also been involved in the Megaupload case, and was the judge who released Dotcom on bail, despite pressure from the US to keep him locked up. Furthermore, Harvey and Dawson are district court judges, and it seems likely that, in the end, this will involve New Zealand's High Court, which is already engaged and has already ruled against the US.

But, here's the bigger issue: we see stories of judges in big copyright cases all the time who have strong ties to pro-copyright or copyright maximalist organizations... and people shrug and move on. Let's just say, for example, if Judge Harvey had said that he agreed with New Zealand's efforts to join the TPP because he thought that New Zealand needed stronger anti-circumvention rules to protect DVDs, would anyone even blink an eye? I doubt it.

Furthermore, travel around the globe, and you find the exact opposite situation in many cases, where the judges did not step down. Most famously, over in Sweden, the judge who heard The Pirate Bay trial had close ties to the copyright lobby, and was a member of a few organizations that worked towards promoting stronger copyright law. It seems like that would be a much more direct and obvious conflict than Judge Harvey's... yet that Swedish judge stayed on. Similarly, here in the US, Judge Beryl Howell, who bucked the trend in copyright trolling cases, by allowing cases to move forward on questionable theories, was just recently an RIAA lobbyist, and prior to that had helped write the DMCA, while a Congressional staffer. And, yet, she remained on the case.

It seems that there's a pretty clear double standard at work here. If you're strongly pro-copyright, no one blinks an eye if you are hearing copyright cases. But, if you make an offhand joking comment that's marginally critical of US copyright policy in one specific area, totally unrelated to the case at hand... you step down.

Filed Under: bias, copyright, david harvey, extradition, kim dotcom, new zealand, region codes
Companies: megaupload

NZ Judge In Dotcom Extradition Case Speaks Out Against TPP & US Copyright Extremism

from the good-for-him dept

A bunch of news reports are highlighting a story in which New Zealand District Court Judge David Harvey supposedly called the US "the enemy," and are pointing out that he's the judge overseeing the extradition case for Kim Dotcom. Upon seeing the headline, I was pretty amazed as well, figuring that might cause problems with the case, but the details show that his comments were not about the US in general, or about the Dotcom case. Rather, they were in response to the TPP negotiations that we've been following closely -- and how the TPP will take away certain rights from New Zealanders, like the ability to get around region-specific DVD players:

It is legal in New Zealand to use methods to get around these regional codes and make the DVDs watchable but Judge Harvey said the TPP would change this.

"Under TPP and the American Digital Millennium copyright provisions you will not be able to do that, that will be prohibited... if you do you will be a criminal - that's what will happen. Even before the 2008 amendments it wasn't criminalised. There are all sorts of ways this whole thing is being ramped up and if I could use Russell [Brown's] tweet from earlier on: we have met the enemy and he is [the] U.S."

His point is that the US is trying to expand copyright protectionism and curtail current rights of New Zealanders, blocking them from doing something that is currently legal and seems perfectly reasonable (getting around regional restrictions to watch legally purchased DVDs from other regions). It's a good thing that more people are seeing the problems of American extremism on copyright law, but I wonder if this will be used (as it appears to be in the press) to hit back on him for his role in the Dotcom case.

Filed Under: anti-circumvention, copyright, david harvey, dvds, new zealand, policy, region free, tpp, us
Companies: megaupload

Kim Dotcom Offers To Come To The US, If DOJ Releases Funds For Legal Defense

from the your-move dept

We just noted how the procedural delays in the case against Kim Dotcom meant that it was more difficult for him to fight back against the US government. In response to all of this, Dotcom is offering the Justice Department a deal. He will come to the US and defend the case here if it agrees to unfreeze assets specifically to allow him to fight the case (i.e., pay lawyers and living expenses during the trial). In other words, he's willing to skip the extradition fight and believes he can win in a US court, if they're willing to actually let him access the money to pay for the defense. As he told the New Zealand Herald:

He said he would willingly go to the US if he and his co-defendants were given a guarantee of a fair trial, money to pay for a defence and funds to support themselves and their families.

"They will never agree to this and that is because they can't win this case and they know that already."

This is an interesting move, because it's entirely possible that the DOJ will call his bluff here. Certainly, some of the strength in Dotcom's case is that he wasn't violating New Zealand law (which is required for the extradition to take place). A fight in a US court, against the DOJ, is a much tougher proposition -- and a very risky bet. There are a lot of reasons why Dotcom may have a strong case, but the DOJ rarely loses. It happens, but it's rare. Even in extreme cases, the DOJ is pretty good at railroading those they indict to "plea" out of a case rather than face a full trial.

Filed Under: doj, extradition, kim dotcom, new zealand
Companies: megaupload

Megaupload Extradition Hearing Postponed Until At Least Spring Of 2013

from the and-its-business? dept

Given all of the mistakes made by both US and New Zealand officials in the raid on Kim Dotcom and Megaupload, there are a series of appeals going on in the case in New Zealand concerning some of the evidence as well as what information Dotcom is allowed to see. While the extradition hearing was set to occur next month, it's now been pushed back until at least March 2013 and could get extended longer. The idea is to give some time to let the appeals process run its course.

Dotcom seems pretty pissed off about this, as every moment of delay means more time during which his business has been shut down without a single adversarial hearing -- and during which it can't be re-established. For pretty obvious reasons, this is immensely troubling. There was no reason why Megaupload couldn't have been brought to court under a normal civil lawsuit process, like so many other companies over the years -- including Napster, Morpheus, Grokster, Aimster, Veoh, YouTube and others. After the judge was able to hear both sides, they would have been able to determine if an injunction (and eventually, a complete shutdown) made sense or not. Megaupload didn't have that luxury. Instead, the US government simply decided to shut them down on what increasingly appears to be extraordinarily weak evidence. And as the legal process draws out, that business is gone.

What happens if the entire case falls apart? The US government then will have destroyed what turned out to be a legitimate business on no basis. This way, Hollywood gets to be happy, because the US government took out (at its own expense) a service they hated (but which many artists loved). That doesn't seem right at all.

Filed Under: delay, extradition, hearing, kim dotcom, new zealand
Companies: megaupload

FBI Continues To Insist There's No Reason For Kim Dotcom To Be Able To See The Evidence Against Him

from the of-course-not dept

We already noted that the New Zealand judicial system apparently isn't as willing as the US expected to rubberstamp approval of the extradition of Kim Dotcom. Part of that ruling was a requirement that the US turn over the evidence they're using against Dotcom, so that he can counter it in fighting against the extradition. However, it appears that the US is still fighting this, having the New Zealand prosecutor (who is fighting on their behalf) argue that Dotcom should only be allowed to see a single document out of the 22 million emails the FBI collected and that this really isn't a matter for the New Zealand courts to concern themselves with, as they should just let the Americans handle it.

Crown lawyer John Pike argued that there was no need for Dotcom to have access because he was not being tried in New Zealand.

The judge in the extradition case needed only to decide if there was a case for him to answer in the US, Mr Pike said, and that question was answered by the record of case.

That's kind of amazing when you think about it. He shouldn't be allowed to even see the evidence against him... even if it might prove that there is no "case for him to answer to in the US." That's what's so troubling about the US position on cases like this one and the O'Dwyer/TVshack case. They seem to assume that it shouldn't be of any concern if they drag someone thousands of miles across oceans to face trumped up charges in the US.

Filed Under: extradition, fbi, john pike, kim dotcom, new zealand

Yet Another (Yes Another) Error In Megaupload Case: Search Warrants Ruled Illegal

from the keystone-kops dept

Early on, we pointed out that the legal theories behind the shutting down of Megaupload and the arrest of its founders were highly questionable. And since then, we've seen that it wasn't just the legal theories that were problematic, but nearly everything about the case, including a bunch of procedural issues. There's been lost evidence and plans to destroy evidence. There have been procedural errors that knocked out a restraining order for being improperly filed, as well as the failure to properly serve the company, which may lead the case against the company (but not the individuals) to be dropped entirely. On top of that, the US has been acting as this is all pretty straightforward, but have already been surprised to discover that the New Zealand government won't simply rubberstamp the extradition.

The latest update may create an even bigger headache for the US in its crusade against Kim Dotcom and Megaupload. High Court judge Helen Winkelmann has ruled that the search warrants used to seize Kim Dotcom's property... were illegal. Yeah, that's going to present a problem for the US. She also ruled that the FBI broke the law in taking data from Dotcom's computers out of the country. But the illegal warrants are the big deal here:

She said the search warrants were invalid because they were general warrants which lacked specificity about the offence and the scope of the items to be searched for.

Without a valid warrant, police were trespassing and exceeded what they were lawfully authorised to do.

Justice Winkelmann said no one had addressed whether police conduct also amounted to unreasonable search and seizure, but her preliminary view was that it did.

In other words, it's not only entirely possible that the government won't even be able to use anything from what they seized in a case, but they may, themselves, be in trouble for breaking the law and violating Dotcom's privacy rights.

The specific problem? The warrant did not actually state what US laws were supposedly broken -- which is kind of important, especially since this was about a case in the US and a person in New Zealand. If it's not made clear that the warrant is under US laws, then it "would no doubt cause confusion to the subjects of the searches...they would likely read the warrants as authorising a search for evidence of offences as defined by New Zealand law."

So not only do we have a weak case, the whole process in the case has been a complete joke and may mean that the US is unable to use much of the evidence it collected, can't extradite Dotcom and... has little actual basis to move forward with a lawsuit. Honestly, I'm somewhat amazed at the number of mistakes by the feds in such a case. It increasingly feels like they did this because they felt the need to "do something" right after the effort to pass SOPA and PIPA stalled out -- and in their rush to make Hollywood like them again, the feds didn't bother to actually pay much attention to the details. Sometimes it's "creative" to color outside the lines. At other times, it's called cooking up a case on trumped up charges for political reasons.

Filed Under: errors, fbi, helen winkelmann, illegal search & seizure, kim dotcom, new zealand, procedures
Companies: megaupload

New Zealand's High Court Steps Into Extradition Fight Over Kim Dotcom

from the not-so-simple dept

As the Justice Department continues to pretend there's nothing strange at all about its highly questionable tactics in shutting down Megaupload and having its executives arrested, the courts are still struggling with the details. A few weeks back, we noted that a judge in New Zealand rejected the US's demand that New Zealand merely rubberstamp an extradition order to the US, despite there being numerous questions over the case itself and whether or not extradition is appropriate. As part of that, the judge also ordered the US Attorneys to hand over the evidence they're using to make the case against Dotcom and his colleagues, such that they can properly respond to the evidence. The US, as you might expect has gone absolutely ballistic about this, insisting that such an effort is impossible -- and that "it would take at least two months" to get the evidence together.

Of course, to some of us, that suggests that the DOJ hasn't yet looked at the evidence -- and thus it shut down the company and arrested its staff first, without even knowing if a crime had been committed.

Either way, that months-long delay presented a problem, since New Zealand had scheduled the extradition hearing for August 6th, and the Megaupload legal team deserved some time with the evidence to formulate its defense. The latest, however, is that New Zealand's High Court has agreed to an "urgent review" of the original ruling. The court also told the US to start the process of putting together the evidence to hand over to Dotcom's lawyers, but that it can wait until the High Court has reviewed the case before actually handing them over.

No matter what, this is once again showing the US's hubris in this case -- assuming it could waltz into New Zealand, with highly questionable evidence, shut down a company, and extradite the executives to the US without anyone asking questions. With each move in this case, more questions are raised about the competence of the DOJ staff who worked on this case, led by Neil MacBride -- a former "anti-piracy VP" for the copyright industries, who may have let his biases and previous (and future?) employers' interests get the best of him.

Filed Under: copyright, doj, evidence, extradition, high court, kim dotcom, neil macbride, new zealand, us
Companies: megaupload

New Zealand Judge Won't Rubberstamp Kim Dotcom Extradition; Orders US To Share Evidence

from the not-so-easy dept

Once again, it appears that the US prosecution of Kim Dotcom and the other Megaupload folks suggests that US federal prosecutors have been acting like they have a slam dunk case, whereas every time anyone digs into the details, all of the important infrastructure is missing. The latest is that the US seemed to assume that as long as they kept going on and on about the "mega conspiracy" and the "money laundering" involved (even if that "laundering" appeared to be normal payments to service providers), that New Zealand would rubber stamp the extradition request without reviewing any of the evidence.

No such luck.

The New Zealand judge is raising significant questions about the US's case while also ordering the US government to provide copies of the evidence it is using to Dotcom's lawyers -- something the US insisted was not necessary. What's clear is that the US really thought that New Zealand would just roll over and hand over Dotcom because they sprinkled the indictment with scary phrases like money laundering and conspiracy. But, as the judge notes, the US seems to be taking a somewhat extraordinary interpretation of copyright infringement -- using civil copyright infringement as the basis for a criminal copyright charge... and then pumping up that criminal copyright charge into conspiracy and money laundering charges. And that's important, because New Zealand won't extradite someone if the case is really just about copyright infringement.

The distinction between civil and criminal copyright infringement is an important one -- and confusion over this point is one that the US government has been relying on in seizing various domain names for the past couple of years. It's good to see that the judge here was not at all confused by this, and seemed to get to the heart of the matter pretty quickly.

As I have already observed this is a case that is more complex than many. There is a complex factual matrix and the justiciable issues are complicated by the fact that the United States is attempting to utilise concepts from the civil copyright context as a basis for application of criminal copyright liability which necessitates a consideration of principles such as the dual use of technology or what they be described as significant non infringing uses.

The existence of criminal copyright charges is a keystone to providing the unlawful conduct element of the racketeering, money laundering and wire fraud charges...

Separately, the judge was not at all persuaded that it would be too difficult to do discovery for the extradition phase of this case, because the evidence is all in electronic form. Yes, the US argued that going through a discovery process to share evidence with Dotcom and his lawyers would be too difficult. But the judge is having none of that:

During the course of arguments the issue was raised as to the difficulty of effecting disclosure given that so much material is in electronic format. During the course of argument I reminded counsel of recent amendments to the High Court Rules relating to electronic disclosure and what is a widespread and growing practice of the use of computer equipment and specialised search techniques to swiftly recover relevant material, to eliminate irrelevant or repetitive material and to utilise a number of search techniques including keynote searching, concept searching, clustering technology, predictive coding or document prioritising technology, email threading and near duplicate identification. It may not be necessary under the circumstances to engage, at this stage of the process, in native file review but there are procedures available and that are utilised within the civil arena that will enable the prompt disclosure of relevant information.

Perhaps I'm mis-translating my New Zealand, but I sense a certain hint of sarcasm in that statement. The US government is really claiming that finding the relevant documents for disclosure is too difficult because it's in electronic format? Really? Thankfully, it appears that the judge in New Zealand isn't as technologically clueless as US prosecutors expected him to be.

Filed Under: extradition, kim dotcom, new zealand
Companies: megaupload

Some Countries Want To Fix TPP... By Making It More Like ACTA

from the TRIPS-is-for-wusses dept

ACTA and TPP have much in common, but the way in which they represents two aspects of the same impulse has never been shown more clearly than here, in this proposal to re-use elements of one in the other:

In an apparent effort to break the deadlock in negotiations for an intellectual property rights (IPR) chapter in the Trans-Pacific Partnership (TPP), several countries are proposing that certain provisions in a U.S. proposal be replaced with language from the Anti-Counterfeiting Trade Agreement (ACTA), according to informed sources.

Sources said that other ACTA signatories involved in the TPP – New Zealand, Australia and Singapore – want to substitute language from the agreement’s criminal offenses section with the proposed U.S. language on criminal enforcement, according to sources in Dallas.

Some of the more "moderate" participating countries have realized that TPP's criminal enforcement provisions are simply disproportionate:

the ACTA and the U.S. proposal [for TPP] both would require countries to provide for criminal procedures and penalties at least in cases of "willful" counterfeiting of trademarks and copyright piracy on a "commercial scale."

However, the U.S. proposal contains a much stricter interpretation of what constitutes commercial scale because it would cover significant infringements for both the purposes of commercial advantage or private financial gain as well as acts that result in no direct or financial gain.

One source said this provision could criminally punish an individual who has committed a significant act of infringement but does not intend to gain financially from it. IPR industry sources defend this approach as capturing users of file sharing services who do not stand to gain financially by sharing a large amount of pirated content.

That last comment is noteworthy, because it shows that the copyright industries want to punish general users swapping unauthorized copies with criminal sanctions even if there is no money involved. It confirms that these treaties are not really about fighting organized crime, as they are often presented, but truly a war on online sharing itself, where the aim is to put ordinary people behind bars.

To break the deadlock on this issue, the moderate wing of the TPP club is apparently suggesting that the equivalent ACTA provisions should be re-used. It's interesting to see ACTA, which is still being fiercely fought in Europe because of its harsh and unbalanced nature, presented here as a milder option compared to TPP. If nothing else, that negotiating calculus emphasizes just how extreme TPP is.

However, it's also disturbing that ACTA, although not yet in force, is already being taken as the new baseline. Indeed, the article quoted above notes that ACTA's provisions "represent a much higher standard than the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)" - the previous benchmark here.

Moreover, as regards the current "compromise" idea of using ACTA's provisions instead of the US proposals for TPP, an industry source had the following to say:

the U.S. IPR text largely reflects the U.S.-Korea FTA [Free Trade Agreement] and it would be unlikely the U.S. would agree to provisions that are less strict in the area of criminal enforcement.

As far as the US is concerned, it seems, every treaty in this area, whether bilateral (as in the US-Korea FTA) or multilateral (as with ACTA and TPP), is part of a policy ratchet that allows change in only one direction: more. The unspoken assumption that more copyright and more enforcement are always better is one of the key reasons why SOPA failed, ACTA is meeting such resistance, and even TPP is stumbling.

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Filed Under: acta, australia, fta, new zealand, singapore, tpp