MegaUpload scoreboard: Momentum is with Kim DotCom

In January, MegaUpload founder Kim DotCom was little more than antipiracy road kill.

Six months later, DotCom is making a comeback.

The United States accused MegaUpload, a once popular cloud storage locker, of being a massive piracy operation. Seven company managers, including DotCom were charged with criminal copyright violations, conspiracy, money laundering and wire fraud. The defendants denied wrongdoing but they seemed headed for long prison sentences.

A month after his arrest, DotCom was still locked up in jail. His assets had all been seized. His family had been booted out of his home. Since then, however, DotCom and some of the other MegaUpload defendants have won a string of favorable court decisions in New Zealand that have led to their release on bail, the return of some of their assets and a court order that requires the FBI to show the evidence it has against the company.

On Friday, when MegaUpload's lawyers are due to appear in a Virginia federal court to argue that the charges should be tossed out, all the momentum will be with them.

The case has a lot riding on it. For some of the defendants, including DotCom, the charges could bring a 20-year jail sentence. On the other hand, if DotCom walks, it would be an embarrassing setback for the antipiracy efforts of U.S. President Barack Obama.

MegaUpload's side is feeling confident and why not? Not only are the defendants making headway in court but DotCom has begun to hijack the public debate about his case. DotCom is using his growing celebrity to challenge the image of him as a pirate and scoundrel.

In the indictment filed against DotCom, the U.S. Attorney for the Eastern District of Virginia said that by encouraging MegaUpload users to share pirated movies, TV shows, songs and other media with each other, DotCom made millions and was living like a Tsar.

Shortly after his arrest, news reports were filled with images of his $30 million mansion and of New Zealand police hauling away his pink Cadillac and Mercedes Benz. The United States said MegaUpload had cost Hollywood studios and other copyright owners $500 million. The authorities played up his conviction in Germany 10 years ago for embezzlement and insider trading.

So, last week Dotcom started a new Twitter account to tell his own story. He attracted more than 30,000 followers in two days. He used it to announce the upcoming launch of Megabox, a music discovery and sharing service. His biggest public-relations coup was posting to the Web a photo of himself with Steve Wozniak, the bearded and beloved co-founder of Apple.

For the skeptics who don't believe a photo necessarily signifies an endorsement, Wozniak, in an exclusive e-mail interview with CNET, made clear what he thinks of DotCom.

"When crimes occur through the mail, you don't shut the post office down," Wozniak wrote on Sunday. "When governments dream up charges of 'racketeering' for a typical IT guy who is just operating a file-sharing service, or accuse him of mail fraud because he said he had removed files [to alleged infringing content] when he'd just removed the links to them, this is evidence of how poorly thought out the attempt to extradite him is. Prosecutors are attempting to take advantage of loopholes." (You can read Wozniak's full statement here.)

To counter the notion that he's an enemy of creators, DotCom released a music video featuring musicians Will.i.am, Chris Brown, P. Diddy and Kanye West, all of them professing love for MegaUpload. The 4-minute clip has been viewed on YouTube more than 13 million times.

Much of the damage to DotCom's reputation, he did to himself. For many years, DotCom's public profile was of a street racer and hacker who liked being photographed sipping champagne with models and porn stars. Since his arrest, DotCom has toned it down.

He's now taken to posting photos of his wife and four small children.

Media from all over the world, including The New York Times, seems magnetized to DotCom's story. For this reason, the U.S. and copyright owners face a legitimate threat from DotCom.

Regardless of what happens in court, his prosecution could make DotCom bigger than ever. He could become an Internet martyr or a digital-era equivalent of Maximus, the cinematic character who won the crowd and defied an empire.

DotCom's extradition hearing in New Zealand is scheduled for August 6. But come Friday, Ira Rothken, MegaUpload's lead attorney, is expected to argue that the U.S. government hasn't properly served the defendants with a summons. The company's lawyers also say the U.S. Department of Justice has no jurisdiction over the Hong Kong-based company.

Over in New Zealand, MegaUpload's legal team has recently made an issue of the removal of some of Kim DotCom's personal data from New Zealand. The court is trying to determine whether the United States and New Zealand had the authorization to transfer the data.

In April, District Judge Liam O'Grady wondered aloud in court whether the case against DotCom would ever go to trial. The way things are going, the judge's statement looks prophetic.