In SOPA's shadow, Megaupload strikes back against Universal

While Congress debates the controversial Stop Online Piracy Act (SOPA), a real-world copyright dispute has been unraveling with a major music conglomerate flexing its muscle against an online content hosting company based in Hong Kong.

Megaupload posted a promo video for its online hosting and file transfer service on YouTube on Friday, and Universal Music Group quickly had it removed for alleged copyright violation. The video features Kanye West, Puff Daddy, Snoop Dogg, Jamie Foxx, Mary J. Blige, and others voicing, and even singing, their praise for the service. UMG claimed some of the artists had not consented to appearing in the video and including them violated the Digital Millennium Copyright Act (DMCA).

Megaupload filed a counter-notice with YouTube and sued UMG (PDF) on Monday for misrepresentation of copyright infringement, requesting a temporary restraining order (PDF) to prevent the entertainment company from barring distribution or display of the video. Federal District Court Judge Claudia Wilken said she would give UMG until today to respond. A court clerk told CNET this afternoon that there had been no new order issued.

Now, UMG has quietly dropped its take-down request and the Megaupload video is back up. (A copy of the video not posted by a Megaupload account was accessible earlier in the day.)

"About 1 hour ago Youtube has made our video available again, Megaupload founder Kim Dotcom said in an e-mail to CNET around 6:30 p.m. PT. "We have been informed that UMG has removed their DMCA take down request. They had no rights whatsoever to claim copyright on our work and the legal battle will continue."

Neither UMG representatives nor their attorneys could not be reached for comment.

Meanwhile, an episode of the "Tech News Today" show on Twit.tv that also had been removed from YouTube on a take-down request from UMG was back up on Google's popular video site today, as well.

The "Tech News Today" episode from Monday included two clips of the Megaupload video that were played during a discussion of the copyright battle between Megaupload and UMG. Show host Tom Merritt disputed the takedown order, saying the site's use of a few clips during a journalistic program was fair use.

Merritt said he noticed that the Tech News Today episode was back on YouTube earlier today. "I have no idea why. I didn't get any notice," he told CNET in an interview tonight.

Yesterday, Merritt had tweeted: "YouTube wait 10 days to see if Universal will file a court order against us before they restore the show. Not ideal for daily news." In response, Matt Cutts, a Google engineer, tweeted: "Not sure if it will help, and it's not my area, but I poked a few people about this internally. Sorry for the bad experience. :("

As a result of UMG's action, Merritt's episode lost about three days worth of news cycle and monetization on YouTube. "I find the DMCA process extremely frustrating because I am guilty until proven innocent in this situation," he said.

Megauploader founder Kim Dotcom said in a court filing (PDF) that apparently UMG had assumed that Gin Wigmore's voice was on the video, but in fact it was Macy Gray singing instead. In addition, the document provided a copy of an agreement signed by singer Will Adams, known as Will.i.am, on whose behalf a lawyer had incorrectly filed a take-down notice.

"We have a one-to-one agreement with every single person who is manifested in that video, whether they are speaking or singing or just appearing," Ira Rothken, a San Francisco-based attorney who is representing Megaupload, told CNET today. "We have broad releases with each of the stars."

Rothken accused UMG of "gaming the DMCA system to chill free speech."

Even though the video is back up, Megaupload can seek damages.

"Megaupload has already suffered substantial harm as a result of UMG's wrongful interruption of its promotional campaign," the court documents filed by lawyers for Megaupload said. "Hundreds of thousands, and likely millions, of persons who are attempting to connect to a video promoting Megaupload in a positive light are instead being diverted to screens that, as a result of UMG's notices, falsely describe the video as copyright infringement."

The back and forth on the Megaupload video comes as the House of Representatives Judiciary Committee sided with the Motion Picture Association of America and the Recording Industry of America and approved all the pro-SOPA amendments that were offered. While some SOPA opponents have already acknowledged eventual defeat, the final vote may not happen until 2012.

Designed to respond to the rise of offshore "rogue" Web sites that distribute pirated movies, songs, and other copyrighted material, SOPA would allow the attorney general to seek a court order against the target Web site that would then be served on Internet providers in an effort to shut down the site. While the MPAA and RIAA say the measure is needed to prevent rampant online piracy, legal scholars and technologists argue that it could suppress free speech by in effect deleting Web sites accused of copyright infringement.

The Megaupload-UMG situation illustrates how giant content owners could overstep their authority at the expense of free speech if SOPA becomes law, according to Rothken.

"There's a lot of SOPA crossover from what UMG is doing against Megaupload," he said. "It shows the abuse that could happen under some of the proposed SOPA rules by giving power to Hollywood to act as judge and jury as to whether or not something ought to be considered a disagreeable Web site. Here, clearly, UMG should not be given that kind of power because it appears as though they are abusing the system."

Updated at 7:07 p.m. PT with Megupload founder saying UMG has dropped their take-down request and the video is back up and 6:28 p.m. PT with comment from Merritt and Tech News Episode back up on YouTube and 5:50 p.m. PT with background on legal case.