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MegaUpload users will get their day in court

Federal judge overseeing the MegaUpload case wants to see evidence to help him decide what to do with the files owned by MegaUpload's former users. MegaUpload's lawyer will want U.S. officials to testify.

U.S. District Judge Liam O'Grady will hold another hearing to help him determine what to do with the digital files owned by MegaUpload users.

Ira Rothken, the lawyer in charge of MegaUpload's worldwide defense. Greg Sandoval/CNET

O'Grady is responding to a motion filed by Kyle Goodwin, an Ohio-based sports videographer. Goodwin has sought the return of the video files, mostly of high school sports action, that he stored at MegaUpload, the Internet storage locker that was taken offline by the U.S. government.

In January, the U.S. Attorney for the Eastern District of Virginia accused MegaUpload founder Kim DotCom and six other company managers of criminal copyright violations, wire fraud, and money laundering. U.S. officials allege that MegaUpload was operated as a criminal enterprise that profited from the copyright violations committed by users.

DotCom and the other defendants have denied wrongdoing and are fighting U.S. attempts to extradite them to this country. The case is shaping up to become one of the Web's most important copyright cases ever and could help form how Web storage lockers are operated.

Since the shutdown of MegaUpload, the company's servers and the files contained within have been stuck in a legal limbo.

O'Grady has already heard arguments from MegaUpload, the U.S. Attorney, Goodwin, and the Motion Picture Association of America about what should be done with the files. The MPAA and the government have argued that much of what is stored on MegaUpload's servers is pirated movies, music, and other media.

The judge appears to be stumped about what to do with the data.

"Upon thorough review of the arguments before the Court," O'Grady said in court documents, "and careful consideration of the applicable law, the Court finds that it is unable to reach a conclusion as to this matter without an evidentiary hearing."

Ira Rothken, the Silicon Valley attorney in charge of MegaUpload's worldwide defense told CNET that he believes this will present an opportunity for MegaUpload to call select U.S. officials to testify.

"Megaupload will be filing papers with the court to specially intervene," Rothken said, "considering that it is only the Internet service provider that, under applicable privacy laws, is the only party that can access the data and coordinate return to consumers."