DOJ Responds To Megaupload's Accusations Of Misleading The Court... By Misleading The Court

from the that's-how-that-works? dept

We've discussed a few times now how Megaupload is arguing that key elements in the warrant used to criminally charge the company and its principles were misleading to the court. In particular, Megaupload has pointed out that part of the "evidence" for criminal conspiracy was that Megaupload knew about infringing activity on the site, but chose not to do anything about it. However, as Megaupload made clear in its filing, the reason it knew about it was because it was informed that the content was subject to a federal investigation, and that the "evidence" needed to be preserved. As we detailed in our last post on the subject, the DOJ went straight to Megaupload's hosting partner, Carpathia, to let them know about this. Carpathia pleaded with the DOJ to talk directly to Megaupload (after receiving assurances that Megaupload was not the target), but the DOJ rejected that request.

However, since this was evidence of potentially criminal activity, Carpathia told Megaupload about it, implying that the DOJ was making it clear that Megaupload should not delete the files.

Notably, the Government avoided communicating with Megaupload directly, instead deputizing Carpathia to do so on its behalf. (See June 25, 2010 email from Phil Hedlund to Mathias Ortmann and Kim Dotcom, Ex. 1 ("Please know that we attempted to convince the Government to work directly with Mega on this matter, but given the complex jurisdictional issues, they have been unwilling").) Far from warning Megaupload that the Government considered it to be part of a worldwide criminal organization, which the Government even at the time was terming the "Mega Conspiracy," the Government, through its anointed agent Carpathia, represented to Megaupload that "[w]e have no reason to believe the [sic] MegaUpload is the target of the investigation."

Megaupload cooperated with the Government and voluntarily arranged with Carpathia to supply the Government with the files identified in the sealed warrant. In accordance with the Government's express admonitions--as conveyed to Megaupload through the sealing order and Carpathia's instructions--Megaupload avoided signaling that anything was afoot or otherwise compromising the investigation, preserving the files in their original condition without alerting users or the public that anything had changed. At no time did the Government or Carpathia indicate that Megaupload could or should remove the files identified in the warrant from its cloud storage platform without compromising the stated secrecy of the investigation, much less did they suggest that Megaupload was legally obliged to do so lest it be complicit in an ongoing criminal conspiracy.

The DOJ has now responded to these claims, and it's done so in its typically misleading fashion. For example, it insists that Megaupload is misleading in its own filing, because the DOJ never directly spoke to Megaupload. They leave out the whole part about the DOJ talking to Carpathia, who had to talk to Megaupload if it wanted to preserve the evidence in question without risk of it being deleted. But, no, in the DOJ's version, this is all just Megaupload fantasy talk.

Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government misled the court as part of a conspiracy to entrap Megaupload. For instance, Megaupload alleges that the government "affirmatively [led]" Megaupload to retain certain files on its servers.... Yet Megaupload does not cite a single communication between the government and Megaupload or a single instruction from any member of the government to Megaupload; there are none.

Notice the lack of any mention of the Carpathia communications between the DOJ and Carpathia, or between Carpathia and Megaupload. That seems like relevant info that the DOJ conveniently just skips right over.

Is this really the best argument that the DOJ can put forth? The filing also does highlight that the DOJ made other arguments against Megaupload in its filings -- which is true -- but it doesn't mean that the questionable aspects concerning some of the key claims should simply be ignored, as the DOJ would prefer.

Filed Under: doj, entrapment, evidence
Companies: megaupload

Supplying The Missing Ingredient In Evidence-Based Policymaking: Evidence

from the just-the-facts,-ma'am dept

It seems extraordinary that in the area of copyright it is only recently that people have started to consider the evidence before formulating policy. Even now, there is still resistance to this idea in some quarters. Elsewhere, though, there is a growing recognition that policy-makers must have access to the data they need when considering how to achieve given goals.

That's very much the impulse behind a new document entitled "Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries". It has been prepared on behalf of the European Commission by the Joint Research Centre, which describes its role as follows:

to provide EU policies with independent, evidence-based scientific and technical support throughout the whole policy cycle.

The bulk of the report is filled with detailed tables of figures and charts attempting to show what's been happening over the last few years in the media industries. Here's a summary of what the Joint Research Centre hopes producing these will achieve:

This study aims first of all to gain a better understanding of the dynamics in the Media and Content Industries (MCI) and to produce an assessment of the current and future competitiveness of the European MCI sector. The study maps the economic value and growth potential of this sector, driven by increasing awareness of the economic value of the sector. The sector itself has grown considerably over the past decades, but it also contributes to the growth of the Information Society. It provides the content which, in digital form, requires high speed broadband networks and thus stimulates the roll-out of broadband networks. The MCI is also an important part of the creative industries, which stimulate a flourishing creative climate thereby attracting other highly skilled economic activities, leading to vibrant urban economies (Florida, 2002; UNCTAD, 2008; European Commission, 2010a).

Secondly, this study aims to gain insights into the fundamental changes in this sector, which have taken place over the past two decades as a result of the introduction of ICT in different parts of the production and distribution process. Some of these technological innovations were so fundamental that they caused changes in the production chain, in the roles and positions in the value chain, in business models and in market structures. In other words, they have led to a transformation of the whole ecosystem.

Significantly, much of the first half of the report is given over to exploring why it is so hard to draw up detailed figures on the media and content industries. Part of the problem is that such official statistics as are available -- and they are relatively limited -- follow older industry categories that don't really fit any more. Even relatively new ones are problematic:

The new OECD definition intends to give a better reflection of the current MCI sector structure. However, the underlying categorization of the Media and Content Industries can not account for one of the most apparent trends in the Media and Content Industries, i.e. its increasing interconnectedness and convergence with ICT (telecom, computer and software industries). Distribution is now separated from MCI and included in ICT category, but increasingly distribution companies are involved in acquisition of content and content rights, packaging and marketing of content, sometimes also adding added value by producing additional services (EPG, communication services etc.) The same is true for new entrants such as major ICT firms like Google, Apple, YouTube, which are also increasingly involved in not just dissemination of content but also in many content related activities.

It is this intermingling of media, content, computers and communications in the digital sphere that makes it so hard to establish what is really happening. For example, the decline bemoaned by many in the traditional copyright industries is in many ways simply a reflection of the fact that new forms of creation and distribution are starting to replace the established ones, but capturing that in official statistics is hard. One way around that is to turn to other sources:

In order to complement the data from official statistics, the study includes 'unofficial' statistics on developments in MCI. With the help of this data, it provides insight into the transformations taking place in MCI that are not immediately apparent in the official statistics. The main topics for which statistical evidence has been collected are the transformations resulting from the impact of ICT, or more specifically the impact of the internet and digitalisation on the production and distribution of media and content. This concerns especially the shift from offline (physical) to online digital distribution of content, and the impact of piracy, P2P networks and user-generated content in particular sub-sectors.

However, in this context the report makes an important point:

From investigating data found by screening major sources from industry associations, consultancies and research institutes specialised in media and content industries, an important conclusion is that it is impossible to directly compare or complement official statistics with unofficial statistics

One source of unofficial statistics is, of course, industry bodies. The report quotes some of their figures in a discussion of piracy:

The industry regards piracy as a serious threat for their business. Table 22 shows estimates by the film industry in 2005 for the losses incurred due to piracy. For the music industry, IFPI (2010) states that the music industry experienced a decline in sales of 30% from 2004 to 2009, which it mainly attributes to file sharing.

It's good to see that those figures aren't accepted uncritically, simply reported. Even more importantly, rather than accept the naïve view that unauthorized file sharing is necessarily harmful to the copyright industries, the report quotes one of the few studies available that looks at what the evidence says:

Although it is difficult to understand the true impact of illegal file sharing on the industry, it is clear that every file downloaded does not result automatically in one less CD or DVD sold. TNO conducted a statistical analysis and calculated the effect of illegal file sharing on the music industry for the Dutch market through a welfare-theoretical approach. They calculated the substitution ratio for the Dutch music industry, and estimated a substitution ratio of at most 5-7%. In other words: for every 15-20 downloads one track less is sold. However, the economic implications of file sharing for the level of welfare in the Netherlands were found to be strongly positive in the short and long terms, because downloaders buy the same amount of music as non-downloaders, and more games and DVDs than non-downloaders. Moreover, downloaders go to more concerts and buy more merchandise (TNO, 2009). It should however be noted that because of the fact that this study is focused on a single country, its conclusions can not be generalized to the EU as a whole without further investigation.

This is just one study, albeit a suggestive one, of what is happening in one country. Clearly many more are needing in order to establish the real impact of unauthorized sharing on the traditional copyright industries. Let's hope the Joint Research Centre can build on its current report and contribute to the gathering of more complete evidence on this crucial topic.

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Filed Under: content industries, copyright, eu, evidence, media, policy

DRAM Patent Holder Rambus Called Out (Again) For Shredding Evidence

from the no-evidence-that-destroyed-evidence-was-relevant...-wait,-what? dept

Rambus Inc. is back in the news again as some of its questionable pre-litigation tactics have been highlighted by another company on the receiving end of a patent infringement lawsuit. Rambus Inc. sued SK Hynix and several other chip builders at the beginning of 2000, claiming to hold the rights to certain DRAM technology. 

Rambus is perhaps best known for a move that took place well over a decade ago, shortly before it went into the innovation-via-litigation business.

On Friday, Whyte found that Rambus destroyed documents when it anticipated litigation. Specifically, Whyte said, Rambus employees were told to destroy documents at annual "shred days," from 1998 to 2000, prior to filing the patent suits.

Because litigation was "reasonably foreseeable," Whyte ruled, Rambus should had preserved the documents.

"Rambus engaged in spoliation of evidence when it engaged in the destruction of documents on all three shred days," the 66-page ruling states.

"Annual shred days?" The fact that Rambus had not only a periodic event but a nickname for the event should probably be taken as an indication that the "company" needed to rid itself of possibly damning paperwork. It calls to mind something akin to mobsters moving suitcases of cash to their mothers' houses ahead of a RICO investigation.

Now, many companies will annually shred financial documents, personnel files, etc. that have reached the expiration date of federal and state retention requirements. However, what Rambus did hardly sounds like just being tidy, despite its "engineers are messy" defense.

Rambus countered that its engineers tended to be "pack rats" and said that its policy was justified...

SK Hynix had brought Rambus' "shredding days" to the attention of the disctrict court back in 2005, claiming that "Rambus had spoliated evidence and that its 'unclean hands' warranted dismissal of 15 infringement claims." This claim was dismissed and in 2011, US District Judge Ronald Whyte ordered SK Hynix to pay $397 million in royalties. On appeal, Whyte reexamined Hynix's claims and found that Rambus had indeed shredded plenty of documents, but possibly nothing relevant.

"The evidence does not show that Rambus knowingly destroyed damaging evidence," Whyte said.

"Although the evidence does not support a conclusion that Rambus deliberately shredded documents it knew to be damaging, the court concludes that Rambus nonetheless spoliated evidence in bad faith or at least willfully," he added.

He also gave Rambus a bit of a post-facto warning.

Because litigation was "reasonably foreseeable," Whyte ruled, Rambus should had preserved the documents.

Then there's this, in which Whyte states that the litigation might have gone differently if no documents had been shredded.

"Even if none of the destroyed documents would have shed new light on the disclosure obligation, there may have been internal Rambus documents containing information about Rambus' plans to gain market power by using information learned at [Joint Electron Device Engineering Council] JEDEC meetings. Such evidence could have been relevant and given support to Hynix's equitable claims and defenses," Whyte said.

"The court concludes that Hynix has made a plausible, concrete suggestion that it may have been prejudiced by destruction of JEDEC-related documents, and that Rambus has not overcome this suggestion of prejudice by clear and convincing evidence."

Despite all this, SK Hynix is still on the hook for royalties. The $397 million might be reduced, but any reduction would have more to do with royalties Rambus has already collected from other companies, rather than any excessive shredding or the fact that it basically reverse engineered its patents to cover new industry standards. Unfortunately for SK Hynix, the shredding that has already resulted in two Rambus infringement suits being tossed out doesn't seem to be doing much for it.

Filed Under: dram, evidence, patents, shredding, standards
Companies: rambus, sk hynix

Evidence That UK Needs Mandatory Porn Filters? Informal Survey Done At One School

from the serious-policymaking-much? dept

In the UK there is currently a campaign and associated petition from the organization "Safety Net: Protecting Innocence Online", which calls for mandatory Net filtering of pornography -- people would need to opt out of the system if they wanted to view this material. The justification -- of course -- is the usual "won't someone think of the children?" Here's the pitch:

Every day children and young people are accessing mainstream pornography on the internet, including the most hardcore, violent and abusive images. Evidence clearly shows pornography has a detrimental impact on children and young people including premature sexualisation, negative body image and unhealthy notions about relationships. This cannot be allowed to continue.

Nick Pickles from Big Brother Watch looked into what that "evidence" might be, and found something rather interesting:

One of the key statistics relied upon by the campaign is that "1 in 3 10 year olds have seen pornography online". They do recognise it was published in Psychologies Magazine in 2010, but the appearance is given that this is a serious statistic. It’s also used in their 'Key Facts' briefing.

When you dig a little deeper however, that definitely isn't the case. The full section in the magazine reads:

"We've had plenty of letters from concerned readers on this very topic, and when we decided to canvass the views of 14- to 16-year-olds at a north London secondary school, the results took us by surprise.

Almost one-third first looked at sexual images online when they were aged 10 or younger."

So, the statistic -- […] at the heart of the petition's press release -- is based on one magazine's anecdotal research at a single school.

Actually, it's even more ridiculous than that. That "statistic" states "[a]lmost one-third first looked at sexual images online when they were aged 10 or younger." But as is well known, UK newspaper titles like Rupert Murdoch's "The Sun" carry "sexual images" -- pictures of topless women -- every day. Given the large circulation of the those titles, it's far more likely that children will have seen "sexual images" there, rather than online, and that their attitudes to women will have been harmed more by this kind of relentless objectification than by isolated images they come across on the Internet. And yet strangely no one is calling for Rupert Murdoch's newspapers to be censored.

It's a classic demonization of the Internet that ignores the broader context, and is based on the flimsiest of pretexts. Worryingly, the UK government is sending out clear signals that it supports this campaign regardless. It's currently conducting a consultation on "Parental Internet controls", which closes on September 6. It's extremely poorly worded and clearly biased in favour of the idea of making blanket censorship the default.

If such Net blocks are brought in, legitimate sites will inevitably be blocked by mistake, but it's not so clear that the objectives of protecting children will be achieved. With blocks in place, parents may be lulled into a false sense of security, and so fail to supervise their children's online activities adequately, which will leave the latter exposed to greater not lesser risks. Meanwhile, young people will find ways to circumvent the blocks -- or just buy a copy of "The Sun".

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Filed Under: evidence, porn filters, surveys, uk

DEA Gets Lawsuit Dismissed Because It Couldn't Cope With Two Terabytes Of Evidence

from the the-cost-of-storage-these-days dept

Catching up on some older stories, Aaron DeOliveira points us to the bizarre news that the DEA sought (and got) dismissal of a case against someone involved in a online pharmacy prescription drug scam (basically prescribing the drugs without ever seeing the patients) because the DEA was sick of storing all of the evidence, both electronic and paper. How much evidence?

More than 400,000 documents and two terabytes of electronic data that federal authorities say is expensive to maintain....

[....] "Continued storage of these materials is difficult and expensive," wrote Stephanie Rose, the U.S. attorney for northern Iowa. She called the task "an economic and practical hardship" for the Drug Enforcement Administration....

[....] The evidence took up 5 percent of the DEA's worldwide electronic storage. Agents had also kept several hundred boxes of paper containing 440,000 documents, plus dozens of computers, servers and other bulky items.

Two terabytes is enough to store the text of 2 million novels, or roughly 625,000 copies of "War and Peace."

None of this makes much sense. You can pick up a two-terabyte drive for a little over $100 (I was just looking to pick up a couple for a backup system). The fact that it can store 2 million novels is meaningless. The idea that it's expensive to store that much seems silly -- as does the claim that 2 terabytes represents 5% of the DEA's "worldwide electronic storage." I recognize that government procurement is a ridiculous process, but if there's any truth to this, then the DEA is even more dysfunctional than originally believed.

As Scott Greenfield noted in the link above:

The revelations from this motion, if true, are amazing and appalling. Given the scope of electronic data involves in investigations, the claim that two terabytes constitutes five percent of the DEA's storage capacity is laughable. It suggests that they're screwing with us, and have no ability to do 90% of the things they claim or we fear they're up to.

Indeed, while we worry about their creating mirror images of hard drives of thousands of computers, or obtaining digital evidence from hundreds of thousands of cellphones, this isn't conceivably possible if the total storage capacity of the DEA is 40 terabytes. It just can't be.

Filed Under: dea, drugs, evidence, online pharmaceuticals, terabytes

New Zealand High Court: FBI Must Release Its Evidence Against Kim Dotcom

from the not-going-well dept

The US's case against Kim Dotcom and Megaupload continues to run into significant problems. While the US Justice Department (with an assist from New Zealand law enforcement) has continued to insist that extraditing Kim Dotcom halfway around the world to the US was a mere formality, and that the evidence against him need not be shown, the courts in New Zealand have taken a rather different view. They refused to rubberstamp the acquisition as the US hoped. Then, the New Zealand High Court stepped in to review the extradition issue, making a final ruling that says that the FBI needs to reveal its evidence and that the extradition request does not comply with the law as currently written.

In other words, a complete and utter failure by the FBI in this effort.

The full ruling (pdf and embedded below) is quite an interesting read, if you've got the time. Basically, the court agrees with the assertion from the US that an extradition hearing isn't meant to try the full case... but, then points out that this doesn't mean you completely ignore the basic rights of the accused. It is still a criminal case, and as such they have certain basic rights that must be observed -- and which the US was trying to deny to Dotcom. The court considers a variety of case law, including some Canadian extradition cases, and even directly notes that some past cases involved "rubber stamp" approvals of extradition (literally using that term). However, more recent cases have pushed back against that and said that the home court need not try all of the evidence, but should at least look at the evidence to see if it is defective.

The court further notes the fundamental unfairness of the argument made by the US and New Zealand: "severely restrict[ing] the ability of [one party] to file relevant evidence would not easily be characterised as 'fair.'"

The bigger question, then, was whether or not the FBI needed to release its evidence to Dotcom, and again, the Court ruled against the US's position. The Court notes that the law enforcement folks rely on obsolete and outdated caselaw to make their argument, and notes that "I do not find this line of authority particularly persuasive" because they really cover different issues, and (of course) the arguments made appear to be stretched from the original intentions. The judge seems to recognize that the FBI and the Crown are making ridiculous arguments, noting that there is "nothing incompatible" with revealing the evidence in New Zealand and then using it in the US case should extradition be granted.

In my view disclosure should be provided by the requesting state. The Act provides the person sought with a right to challenge whether the threshold for extradition has been met before he will be extradited. Consistent with the requirements of... the Bill of Rights Act to a fair hearing, the person sought should be given access to sufficient information to enable him or her to fully participate in that hearing on an equally informed basis. Without access to materials relevant to the extradition hearing phase, the person sought will be significantly constrained in his or her ability to participate in the hearing and the requesting state will have a significant advantage in terms of access to information.

The order lists out what needs to be disclosed, and it's a pretty long list. Basically "all documents" relating to each of the key charges.

Separately, the judge noted that the "Record of Case" document, which the Crown (with the FBI) used to argue for extradition wasn't up to proper legal standards in that it did not provide the necessary info to support extradition.

She also found the "Record of Case", the document which made the argument for extradition, did not currently meet the legal requirements. She said the FBI was under an "obligation of candour" to provide any evidence which could impact on the court's judgment of whether the extradition threshold had been met - and no information had been provided to support FBI claims. The document "did not comply", she said.

Basically, this is the final ruling on this issue. The New Zealand government and the FBI can't appeal it any higher and now have to actually let Dotcom and his lawyers see the evidence against him. What a concept.

Filed Under: discovery, evidence, extradition, fbi, kim dotcom, new zealand
Companies: megaupload

Why Are New Zealand Prosecutors Seeking To Suppress All Images & Video Of Megaupload Raid?

from the seems-sketchy dept

As lots of publications are reporting, over in New Zealand, Kim Dotcom took the stand to testify about how the police treated him during the raid on his home as part of the international effort to seize and shut down everything related to Dotcom and Megaupload. I have no idea if the claims he makes of being kicked and punched and the like are accurate. I'm sure his detractors will question how trustworthy the testimony is. Frankly, I have no idea how accurate it is.

But here's the thing that I find most interesting. Buried all the way at the end of the Stuff article linked above is the following line:

The Crown is seeking for all images and CCTV footage from the raids to be suppressed.

To me, that seems like a point that should be made up top. If Dotcom is being inaccurate in his descriptions, then wouldn't showing the video and images that prove him wrong basically destroy all of his credibility and help the government with their case? The fact that they're trying to suppress that very evidence certainly lends credence to his claims, and (at the same time) calls into serious question the conduct of law enforcement during the raid.

Filed Under: details, evidence, kim dotcom, new zealand, prosecution, raid, suppression, video

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

Judge In Grooveshark Lawsuit Orders Blog To 'Preserve' Logs That Had Already Been Deleted

from the dangerous-ruling dept

Earlier this month, we noted a problematic attempt by Grooveshark's parent company, Escape Media, to subpoena information on an anonymous commenter on the blog site Digital Music News. As we noted at the time, Universal Music had referenced that comment in its lawsuit against Grooveshark. It seemed bizarre to reference an anonymous comment, especially one that seemed like pure hearsay (it made claims about things Grooveshark employees had done). In the lawsuit between UMG and Grooveshark it seemed completely pointless (and, indeed, Grooveshark has been arguing as much in that particular lawsuit). Yet, at the same time, Grooveshark subpoenaed DMN in an attempt to find out who posted that comment. DMN resisted the subpoena, noting that it discards and overwrites its log files every few days anyway, and these files had been long gone already. It also pointed to California's shield law for journalists and the basic First Amendment protections for anonymous speech.

Unfortunately, the judge has ruled against Digital Music News, and ordered it to produce the information. The judge has indicated that he will not require this information during the appeal that DMN's lawyer indicated they would file... but did require "preservation" of the evidence during that time. Beyond the shield law and First Amendment issues raised here (we'll get to those), this raises a very, very troubling proposition for any website that regularly overwrites its log files. Escape Media had argued that even if DMN overwrote the log files, it should be required to hand over the information on the subpoena just in case the overwritten data was still available and could be recovered.

So, what do you do in this situation? Under the judge's order to "preserve" data that has already been deleted, what is a site to do? Do they have to immediately stop using their existing hardware and set up an entire clone -- hanging onto all of the original hardware for who knows how long, just in case a forensics expert can find a tiny piece of (useless for this case anyway) data that has been overwritten probably a hundred times already? That seems crazy. Paul Levy, from Public Citizen, who is representing DMN on this issue, highlighted many of the issues in his blog post about this:

The imposition of data preservation requirements on a journalist who is not a party to the litigation raises questions apart from the merits of the order. Journalists need to be able to discard data when they no longer have any of their own use for it.  Yes, “the public has a claim to every man’s evidence,” but don’t members of the public who are not involved in litigation have the right to discard information despite the fact that it might turn out to be useful evidence for somebody else’s case?  Does the public have a claim to heroic efforts on every man’s part?  Shouldn’t there be higher standards for subpoenas demanding intrusive searches for discarded data in the hands of third parties?

The problem is compounded when it is a journalist that has been subpoenaed.  To what extent does society have any entitlement to make journalists in particular take heroic measures, such as searching the nooks and crannies of their computer equipment for fragments of discarded data?  The judge was sensitive to the fact that our client here is a journalist, telling Escape Media that he was not prepared to allow it to make any general search of Digital Music News’ computers.  But an issue that we may have to pursue on appeal is whether a journalist should ever have to undertake such drastic preservation efforts in aid of a lawsuit in which he is not involved, particularly given the relative unlikelihood that fragments of identifying data remain on his computers somewhere.

Indeed, the problem is broader than just journalists.  Companies often keep log files with respect to server visits (and hosted comments), but there is little business justification for keeping those logs forever; so generally speaking they are discarded after a period of time (EFF's best practices recommendations are worth a look in this regard).  Does the mere act of discarding log files set a company up for the possibility of a demand for forensic examination of the underlying servers, in the hope that some fragment of the data might be recovered?  In this regard, the trial court's order has chilling implications for other California companies, even beyond the issue of journalists. 

Issues of how to preserve the data remain to be decided.  This is not like just leaving one of your file cabinets untouched for a period of time; it is not even as easy as making sure you don't delete any of your email.  Preserving the web site while creating a copy of the underlying servers is a complicated process, requiring the services of a forensic specialist, and the cost could be substantial.  The estimates that we have been given are well into the five figures; but even the cost of several thousand dollars would be an enormous imposition on this small company.

It really is quite a difficult issue, and if the ruling stands, could become a massive headache for any company in California.

Separately, we should not ignore the First Amendment and shield law issues. DMN is not a party in this case, and it's not even clear why this information is needed. Escape/Grooveshark can and should point out that the information contained in the comment is pure hearsay so it shouldn't have to deal with it in the original case. The company has not filed a defamation claim against the commenter and does not appear to have met the high bar required to unveil an anonymous commenter anyway. This is a pretty big concern for any journalist or blogger out there. Being dragged into a third party dispute because someone comments on your site can represent a pretty big problem for a lot of smaller sites.

While Grooveshark's legal fight against the major labels certainly raises some interesting copyright questions, it's disappointing to see them going down this path and potentially creating serious problems not just for Digital Music News, but tons of journalists and websites.

Filed Under: anonymous speech, evidence, first amendment, log files, subpoena
Companies: digital music news, grooveshark, universal music

Judge Preserves Megaupload Evidence For Now, While Gov't Tries To Pin Blame On Hosting Company

from the work-something-out dept

It appears that the judge handling the issue of what to do with Megaupload data -- a situation we've been covering for a while -- finds the entire situation just as annoying as many observers do. He's decided that the evidence should not be destroyed yet... but has also ordered all the various parties who are fighting over this to get together and see if they can broker some sort of deal. Given the various positions by all the parties, I'm not sure this is possible.

The government doesn't care about the data (and possibly wants it destroyed such that evidence against their case goes away). However, at the same time, the government has no interest in giving Megaupload back any of the millions of dollars it seized to pay for the maintenance of the data. In fact, the government seems so against this data ever seeing the light of day that it's actually making the argument that even Carpathia may be liable for copyright infringement, because it made money from Megaupload. This is a rather unique (and totally wrong) interpretation of secondary liability rules, but the DOJ seems so insistent on destroy this evidence that it's apparently not above tarring and feathering independent third parties. Of course, if it really believed that Carpathia may be guilty too, you'd think it would want to preserve the evidence, rather than destroy it.

Megaupload would gladly take on the data and pay for it if it could actually use the seized money for that purpose. The MPAA, however, is completely against this, insisting that all of society would collapse should the data go back to Megaupload (only a slight paraphrase). That said, Greg Sandoval at CNET, who handled the original report (linked above) notes that it appears the judge is not particularly convinced that there's a huge problem if Megaupload is given the data back.

Filed Under: doj, evidence, hosting
Companies: carpathia, megaupload, mpaa