6 Major Hollywood Movie Studios File Copyright Lawsuit Against Kim Dotcom

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Kim Dotcom at the Intelligence and Security select committee hearing at Parliament in New Zealand in 2013.

Image: Mark Mitchell/Associated Press

By Adario Strange2014-04-07 21:13:48 -0400

The other legal shoe dropped on Monday when a group of movie studios filed a lawsuit against Kim Dotcom, the man behind the now defunct video upload site Megaupload.com.

This latest legal action follows the 2012 indictment by the U.S. Justice Department that targeted Megaupload.com, its creator, Dotcom, and his partners. That legal action claimed that the website brought in around $175 million in illegal proceeds.

See also: Kim Dotcom to Launch His Own Political Party

"Megaupload wasn’t a cloud storage service at all, it was an unlawful hub for mass distribution,” said Steven Fabrizio, senior executive vice president and global general counsel of the Motion Picture Association of America (MPAA), in a statement on the organization's website on Monday.

The lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, lists just about every major motion picture studio in Hollywood as plaintiffs, including Fox, Disney, Paramount, Universal, Columbia and Warner.

The legal complaint (PDF) goes into a great detail explaining how, in the plaintiffs' view, Megaupload profited from illegally providing access to large amounts of copyrighted work.

"Only premium subscribers (estimated to be 1% of users) could use Megaupload for long-term file storage," reads the legal complaint. "Thus, by design, Megaupload functioned not as a private online storage locker, but rather as a hub for uploading and downloading infringing copies of popular movies and television shows, including plaintiffs' copyrighted works."

Further explaining how Megaupload worked to obscure what exactly was on the site, the legal complaint even outlines how the site handled its database.

"To conceal the scope of infringement occurring on the Megaupload website, defendants did not provide users with a searchable index of files available for download from the Megaupload website (although defendants themselves had access to such an index)," reads the legal complaint. "Instead, defendants relied on numerous third party 'linking' sites to host, organize, and promote URL links to Megaupload-hosted infringing content, including plaintiffs' copyrighted works."

Later in the complaint, the studios even detail how they believe Megaupload encouraged piracy, while maintaining the appearance of discouraging it by offering an Abuse Tool to report copyright infringing files on the site.

"The Abuse Tool did not actually function in the manner defendants represented," reads the legal complaint. "If the infringing file on defendants' servers had more than one URL link associated with it, which was often the case, then in response to a URL link reported by a copyright holder through the Abuse Tool, defendants would delete only that particular URL link itself, and would leave the other links and the infringing file in place on Megaupload's system …"

Meanwhile, Dotcom took to Twitter to react to the new charges. "Just like the DOJ criminal case against #Megaupload the @MPAA case is a load of nonsense and won't succeed after scrutiny of the facts," wrote Dotcom.

"We believe that the motion picture studios' claims lack merit and we intend on vigorously defending the action," Ira Rothken, Kim Dotcom's legal representative, told Mashable. "We think this is a desperate attempt to try to provide cover for the meritless criminal case brought by the Department of Justice."

Regarding the various technical claims made against Megaupload in the new legal complaint, Rothken remains convinced that neither the site, nor Dotcom and his associates did anything wrong. "We believe [these claims] show a lack of technical sophistication by the movie studios," says Rothken.

Further, Rothken indicated that the timing of the civil complaint from the studios is curious, and suggested that it might be designed to bolster the Justice Department's July extradition case against Dotcom by waging a "war of attrition" to negatively "impact [Dotcom's] resources."

However, when Mashable contacted the MPAA, a spokesperson said that the timing of the action was first and foremost related to the three-year statute of limitations on copyright cases.

The MPAA representative also told Mashable that new information (PDF), released by the Justice Department in December, was also helpful in pushing the civil case forward. According to the spokesperson, that information includes "detailed analysis of what was happening on Megaupload."

Nevertheless, based on the result of a previous civil suit against Megaupload in 2012, Rothken believes this new legal action will be stayed by the courts.

The lawsuit filed by the studios is seeking as yet unspecified damages for profits made by the defendants through copyright infringement.

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Topics: Columbia, copyright infringement, disney, file sharing, Fox, Kim Dotcom, lawsuit, megaupload, mpaa, Paramount, universal, warner bros