MegaUpload has been on a winning streak in court, but last week a U.S. district judge denied the company's request to dismiss a criminal indictment against it.
The U.S. Attorney's office has accused MegaUpload and its leaders of operating the cloud-storage service as a criminal enterprise. U.S. officials allege that founder Kim DotCom and six other associates encouraged users to upload pirated movies, music, and other media to MegaUpload's lockers so managers could get rich on advertising revenue and premium subscription fees.
MegaUpload's lawyers asked the court to throw out the indictment against the company arguing that MegaUpload wasn't a U.S. company and because it had no address here, it could not be served a criminal summons. But the judge rejected that argument, saying that the lack of a U.S. address under criminal law "does not require a result so extreme as dismissal" of an indictment.
The Motion Picture Association of America issued this statement: "Given the major role that Megaupload Limited played in the theft of innovation and creativity from hardworking creators and makers, we're pleased that the criminal case against it will proceed here in the U.S."
I've asked for a comment from MegaUpload's attorneys and will update as soon as I hear back.
The case against MegaUpload and its managers is one of the rare criminal copyright cases brought against a company that claims to be protected by the safe harbor provision in the Digital Millennium Copyright Act (DMCA). Provided that Internet service providers follow the rules set down by the DMCA, they are supposed to be protected from liability for the copyright violations committed by users.
MegaUpload had millions of followers across the globe and the United States claims that the cost to copyright owners from lost sales was in the hundreds of millions of dollars.
The judge's decision means that the case against the company will continue. The charges against DotCom and the individual defendants were not at issue in this decision.