by Mike Masnick
Thu, May 16th 2013 7:58pm
by Mike Masnick
Thu, May 9th 2013 5:52am
from the blah-blah-blah dept
Holder, in his usual fashion, answers with generalities that don't actually answer the questions being asked. He gives his standard "intellectual property theft = bad!" speech:
Well I don't want to comment on a case that is pending. But I will say, more generally, that we are very concerned about the theft of intellectual property. It's something that we take very seriously, both in the United States, and I think our allies do as well. With regard that case, we've been cooperating with the New Zealand authorities. And I will just rely on the pleadings we have filed in court to talk about that.First of all, we've pointed this out before, but you would think that the supreme "lawyer" for the government would know the damn law. There is no "intellectual property theft." That's a made up term by copyright maximalists. There is such a thing as copyright infringement, which is what he means. He should use the actual term. Otherwise it does make him look like a pawn of Hollywood.... Which leads right into the next question. The interviewer notes that Kim Dotcom has been saying that the case is all about the DOJ "heeding the beck and call of Hollywood moguls." Holder immediately responds:
Well, that's not true. I don't want to comment on that case other than to say that it was brought on the basis of the facts and the basis of the law and it's consistent with the enforcement priorities that this administration has had.Well, yes, the enforcement priorities that have heavily been pushed for by Hollywood.
The interviewer notes the various screwups in the case, and Holder doesn't bite, saying that there's been good collaboration and they expect everything to turn out fine in the end. The next question is about how serious Holder is about pursuing extradition, and Holder makes it sound like no big deal:
We have made an extradition request. We have an existing treaty between the US and New Zealand that has been used a great many times throughout the years. And I don't see how any individual would not be subject to that treaty.Uh.... that's a bullshit answer. Because the problem with the extradition issue is not whether or not Dotcom is subject to it, but whether or not the issues in the case are subject to it. The DOJ had to bolt on some questionable conspiracy claims to make this work, since mere copyright infringement is not an extraditable offense. Holder also responded to a question about New Zealand's attempt to spy more on citizens and residents by saying he doesn't see how that violates civil liberties. When questioned on that, he throws out some random statement about cooperation to stop terrorism, and again says that spying on people doesn't need to violate civil liberties.
by Mike Masnick
Wed, May 8th 2013 3:32am
from the laying-out-the-arguments dept
The overall point is clearly stated in the whitepaper. Here's a snippet:
The fact of the matter is that the notion of criminal liability for secondary copyright infringement does not exist in U.S. law. The attempt by prosecutors to expand criminal liability for secondary infringement by couching it as “aiding and abetting” or “conspiracy” goes against established precedent in case law and repeated positions taken by the U.S. Congress.One surprising inclusion is that the whitepaper supports this well known point -- that courts can't create new criminal liability -- by extensively quoting legal analysis from Jay Prabhu from years ago. This is a bit of dagger twisting by Dotcom's legal team. Prabhu, well after writing those analysis, took a job in the Justice Department, and eventually was put in charge of the DOJ's "cybercrime" unit -- and has been a key prosecutor against a number of copyright cases, including various domain seizures. In fact, he's the one who signed the indictment against Dotcom. To use his own words against the case is amusing.
The Copyright Act creates civil and criminal liability for various acts of copyright infringement, but it does not expressly give rise to liability for infringement committed by third parties. Furthermore, the U.S. Supreme Court has defined specific circumstances under which service providers may be held civilly liable (i.e., not criminally responsible) for direct copyright infringement by third parties, such as distributing “a device with the object of promoting its use to infringe copyright.”
The fundamental legal problem with this aspect of the government’s case is that only Congress can create new criminal liability; judges cannot. Previous instances in which courts have imposed civil liability for secondary copyright infringement – based on application of common law principles – do not apply in criminal proceedings, as federal crimes are “solely creatures of statute.” Whatever authority the courts may have had to recognize a contributory theory of copyright liability in the civil context, the courts simply have no power to impose a basis for criminal liability beyond what is expressly authorized by statute.
The filing also lays out a number of arguments that we've seen before, including a further explanation of how the DOJ was being totally disingenuous in arguing that Megaupload refused to remove works it knew were infringing, by pointing out the files they mentioned were ones that Megaupload has clearly been asked to preserve as part of an investigation into copyright infringement.
There's also an interesting and more detailed than previous discussed defense on the point about Megaupload's rewards program. We had pointed out how silly it was to use this element against Megaupload, since it was a general rewards program to get people to make use of its cloud storage, and there was nothing in the program that induced more infringement (in fact, it seemed like a great tool for a content creator to make money by releasing his or her own works via the rewards program). On this, Dotcom's whitepaper points out not just those points, but also (1) the fact that lots of other sites have similar rewards programs (2) specific features Megaupload included in its rewards program that made it bad for infringement (including file size limits and required identification) and (3) the fact that they had dropped the program long before the indictment.
While I do wonder how wise it is to basically give the DOJ their opening brief way before they would actually see it in court -- and giving them a lot more time to respond to it -- there are a few reasons why this move could make sense. First, they're so damn confident in their argument that it doesn't really matter. That may be risky. Another point may be that it signals to the DOJ that they may want to look for ways to extricate itself from the case quickly, because it's not going to go as easy as the DOJ has assumed from the beginning. The other issue may be that Dotcom and his legal team realized long ago that the court of public opinion probably matters more in the long run than the federal court system in the US.
To that end, of course, the paper has a second section, which has received most of the attention: all about the supposed corrupt process that brought about the indictment. When Megaupload hired Richard Amsterdam, he specifically noted that the details of the case suggested a typical "contract prosecution," and the paper seeks to lay out that argument clearly, highlighting the close relationship between the Obama Administration (mainly via VP Joe Biden) and MPAA boss Chris Dodd.
Chris Dodd’s jump from the U.S. Senate into the cockpit of the MPAA was an equivalent move. As the new Chairman and CEO of the MPAA, Chris Dodd improperly leveraged his friendship with Joe Biden to achieve the MPAA’s objectives. Former Senator Dodd’s relationship with the Vice President– who comes off manipulated, a cheerfully credulous facilitator – together with the Obama Administration’s ravenous hunger for campaign contributions, has given the MPAA absolute control over how the U.S. Department of Justice plays the game in enforcing copyright law. This capture is nowhere more clearly demonstrated than in the Megaupload/Kim Dotcom prosecution.Frankly, while this section is getting the most attention, I actually find it to be the weakest and most poorly supported part of the paper, which would probably be more compelling without it. I don't doubt that the close connections between the MPAA and various folks in the DOJ and in the VP's office contributed to Megaupload being a target, but trying to make it out as anything more than that seems like a stretch. Yes, the MPAA complained regularly about Megaupload, and that clearly helped put a target on its back. But, it's quite likely that the over-eager folks at the DOJ ran with this one on their own. The MPAA (with the help of the press) had worked over time to paint Kim Dotcom as "Dr. Evil" of the copyright world. Everything about the process of taking down Megaupload screams of a bunch of feds who totally bought into the theatrical version of the MPAA's vision, without much effort to understand what was really happening. The myriad mistakes and sloppiness in the case really suggest that the DOJ assumed that the stories the MPAA told were so accurate that everything about this case would be a layup. The investigation, the indictment, the raid, the handling of evidence -- all of it was done in a sloppy way -- as if they expected no one would challenge any of it.
I'm sure there was influence and pressure that went into this, but painting it as a case where Chris Dodd called up Joe Biden and said, "Destroy Megaupload" is probably a massive exaggeration. Instead, it seems quite likely that MPAA folks just kept playing up the theatrical version of Kim Dotcom as evil (and, Dotcom himself actually helped promote this sort of view of himself at times as well...), and then the DOJ's imagination combined with its general over-aggressive nature towards any copyright issues just sort of took over from there.
Either way, the paper is definitely a worthwhile read. I'm sure a group of folks at the DOJ are taking their time reading through it quite carefully. I imagine that we'll eventually see their response in court.
by Mike Masnick
Fri, Apr 19th 2013 9:14am
Megaupload Points Out That The DOJ Has Contradicted Itself Concerning Legality Of Serving Megaupload
from the oops dept
We thought it was noteworthy that the DOJ was looking to change that rule and wrote about it. It appears that the lawyers for Megaupload have noticed this same point... and quickly realized that this filing pretty clearly contradicted the DOJ's own statements in the Megaupload case, where they insisted that the existing rules did not get in the way of serving Megaupload. Megaupload is using that to renew its request to have the indictment dismissed.
Back in January, it seems, the DOJ told the court that there was no issue at all with the fact that Megaupload had no US address. As Megaupload summarizes in its filing:
Among other things, the Government argued that, even if the individuals are never extradited to the United States, the Government can simply ignore Rule 4’s requirement that the summons be mailed to Megaupload’s “last known address within the district or to its principal place of business elsewhere in the United States” and instead mail it to an alternate destination. (See Dkt. 159 at 3-4 (suggesting that the Government could mail the summons to the Commonwealth of Virginia’s State Corporation Commission; or to the warehouse of third party vendor Carpathia Hosting; or to other third parties).) Previously, the Government had even suggested that Rule 4’s mailing requirement is merely hortatory, and that “[s]ervice of process in the corporate context . . . is complete upon delivering the summons to an officer or agent” of the corporation. (Dkt. 117 at 9-10.)But that's clearly contradicted by the DOJ's own statement to the courts in the request for the rules change -- which were filed before the DOJ's request to the courts.
The Government’s letter is directly relevant to the Court’s consideration of Megaupload’s pending motion to dismiss without prejudice, as it contradicts the Government’s repeated contention that it can validly serve Megaupload—a wholly foreign entity that has never had an office in the United States—without regard for Rule 4’s mailing requirement. To the contrary, the Government explicitly acknowledges in the letter that it has a “duty” under the current Rule to mail a copy of the summons to a corporate defendant’s last known address within the district or to its principal place of business elsewhere in the United States. (See Exhibit 1 at 2.) Moreover, by seeking to have the mailing requirement eliminated, the Government implicitly admits it cannot validly serve Megaupload consistent with Rule 4 as currently written. Finally, contrary to the Government’s contentions before this Court that Rule 4’s existing provisions are mere accidents of drafting, the Government is acknowledging to the Advisory Committee that they are in fact well considered products of “the environment that influenced the original drafters of the Federal Rules of Criminal Procedure,” albeit an environment that the Government believes “no longer exists,” given what it calls the “new reality” of “federal criminal practice.” (Id. at 2- 3.) To the extent that the Government would urge this Court to work the same substantive modification of Rule 4 that it is urging upon the Advisory Committee, this Court should be forthrightly advised in the premises as to the nature of the Government’s request and the reasoning behind it.Those darn pesky rules.
The Government’s letter to the Advisory Committee thus confirms what Megaupload has argued all along—that the Government indicted Megaupload, branded it a criminal, froze every penny of its assets, took its servers offline, and inflicted a corporate death penalty, notwithstanding the fact that the Government had no prospect of serving the company in accordance with current law, yet to be amended. Megaupload should not be made to bear the burdens of criminal limbo while the Government seeks to rewrite the Federal Rules to suit its purposes.
by Mike Masnick
Thu, Apr 11th 2013 9:38am
from the but-of-course dept
But what if there is no business in the US? That's what the DOJ and Megaupload have been fighting about in the courts, though the courts have (so far) said that the DOJ can proceed. Still, with this requested amendment, the DOJ makes it clear it doesn't want to run into this issue again.
The Department of Justice recommends amendments to Rule 4 of the Federal Rules of Criminal Procedure to permit the effective service of a summons on a foreign organization that has no agent or principal place of business within the United States. We view the proposed amendments to be necessary in order to effectively prosecute foreign organizations that engage in violations of domestic criminal law.While most of the request for the amendment focuses on a ruling in a case involving Chinese espionage via a Chinese firm called Pangang, Megaupload and Kim Dotcom do get a mention. The DOJ first notes how unfair it seems that it can't unleash its powers on foreign companies:
First, we recommend that Rule 4 be amended to remove the requirement that a copy of the summons be sent to the organization's last known mailing address within the district or principal place of business within the United States. Second, we recommend that Rule 4 be amended to provide the means to serve a summons upon an organization located outside the United States. The proposed amendments are necessary to ensure that organizations that commit domestic offenses are not able to avoid liability through the simple expedients of declining to maintain an agent, place of business and mailing address within the United States.
Accordingly, the United States maybe faced with the anomalous result that a private civil litigant will be able to pursue an action against an organization while the government remains helpless to vindicate the laws of the United States through a corresponding criminal proceeding.And then discusses Megaupload in a footnote:
Another example is provided by a pending case, United States v. Dotcom.... A grand jury returned an indictment against foreign organization Megaupload Limited and other defendants on racketeering, copyright infringement and money laundering charges. In response, Megaupload Limited — a foreign organization that has an extensive presence in the United States (it allegedly leased more than 1,000 servers in the United States, facilitated the distribution of illegally reproduced works throughout the United States, and has caused damages in excess of $500 million to victims) — has specially appeared and argued that it is immune from prosecution in the United States simply because it does not have an agent or mailing address in the United States: "Megaupload does not have an office in the United States, nor has it had one previously. Service of a criminal summons on Megaupload is therefore impossible, which forecloses the government from prosecuting Megaupload."I wouldn't be surprised to see this amendment eventually go through, though it still does seem somewhat questionable to think that the US government can bring criminal charges against a foreign company with no physical presence within the US.
by Mike Masnick
Fri, Mar 22nd 2013 4:27am
from the fun-with-data dept
The first study is called Gone in 60 Seconds: The Impact of the Megaupload Shutdown on Movie Sales and is by Brett Danaher and Michael Smith. Smith, especially, has a long history of producing reports that copyright maximalists love. For example, both he and Danaher were responsible for a study last year claiming that the Hadopi 3 strikes program had increased iTunes sales. Unfortunately, a quick review of that report raised serious questions about the basis for those claims, as an alternative hypothesis (related to the sale of new iPhones) showed much more compelling data. I see his name on a lot of research sent around by the maximalists. It's worth noting, as well, that the study was effectively funded by the MPAA, since it was a project of a program run by Smith and funded by the MPAA. Oddly, the paper fails to disclose this tidbit.
This new study seeks to answer a question we've been asking over and over again: do any of these enforcement efforts actually increase sales? There has been evidence that greater enforcement has a small, but temporary, impact on decreasing infringement, but there was not that much data concerning actual sales. In fact, we've pointed to data (contradicting Smith's other report) that suggested Hadopi had done little, if anything, to increase sales. However, the data here has been limited, in part because there are so many other variables at play, so it's difficult to separate out the actual impact. Smith and Danaher try to use data from various studios to look at the impact on movie sales following the Megaupload shutdown.
To try to determine the impact of the shutdown of Megaupload, Danaher and Smith basically compare movie sales before and after the shutdown date in a few different countries that had very different Megaupload usage. For example, they (using Google Adwords data) suggest that Megaupload had 2% penetration in the US, but 17% in Spain. Then they look at what the impact was in terms of digital movie sales and rentals compared across the different countries, and whether or not there were more sales in countries that had more Megaupload usage. They use this to argue that the key difference is Megaupload usage. The end result is that countries that had more Megaupload penetration saw a greater increase in digital movie sales and rentals following the shutdown than the countries that had lower Megaupload penetration. As they note:
This difference is both statistically and economically significant. Our findings indicate that digital movie revenues for two studios were 6-10% higher over the 18 weeks following the shutdown (across 12 countries) than they would have been if not for the shutdown.This chart highlights the basics:
While I've seen some criticism online of these findings, I actually think the basic research and methodology is fairly solid. Those who have jumped up and said "correlation is not causation" are ignoring the various methods that the researchers used to isolate the shutdown. However, I'm not sure that the conclusions are quite as meaningful as some have suggested. First off, we've seen very similar data when it came to decreases in file sharing after enforcement increases -- but the impact has always been shown to be temporary, until people settle in on a new method for infringement. It would make sense that some users of such a service, who don't want to go hunting for a new free option, will switch to an authorized service if it's available. But if they become aware of other services, they might also switch back. The amount of time the impact lasts will be a key thing to watch.
Of course, the other key thing that is left out of the picture in this study is the role of authorized services in all of this. Part of the reason for the growth of infringement on Megaupload in the first place was the dearth of compelling, simple, non-annoying, authorized services. The industry has, finally, been trying to increase those, and so it could be that people who couldn't find any legit services before looked around again after the shutdown and found newer, better services. While the authors of the report say the findings suggest that Megaupload usage decreases sales, a possible alternative explanation would be that the slow pace with which the industry rolled out authorized services was equally, if not more, responsible. Either way, this report is a useful contribution in understanding the impact.
In our next post, we'll explore the second study that came out even more recently, which appears to come to a very different conclusion.
by Mike Masnick
Tue, Jan 29th 2013 5:27am
from the corruption-laundering dept
This case highlights not only the issue of “state capture” by the Hollywood lobby, but at the same time should lead to a thoughtful discussion on how we define corruption. No one would venture to allege that there is any form of cash payment taking place when official bodies appear to act at the behest of special interests motives. Because that’s not how these groups work.That is, he appears to be aware of the nature of corruption laundering that's going on -- using the close connection between big businesses and governments to create laws where people can make the case that cracking down on some behavior is necessary to stop crime, but where the details show it's really about cracking down on competition and innovation.
It is a demonstration of the growing ambiguity of the lines between regulators and the regulated, and the proper role of intellectual property in the digital age. As we’ve seen in the sad and tragic case of Aaron Swartz, for whom Prosecutor Carmen Ortiz was seeking 13 criminal charges and more than 50 years in jail, the American justice system is increasingly flawed by this prosecutorial exuberance aimed at future political reward.
It is one thing when the victims of these abuses are American citizens, who live at the whim of an unaccountable prosecutorial machine driven by personal political ambitions and an appetite for headlines. It is something else entirely when these prosecutors visit their ambitions upon foreign citizens, charging them with heinous crimes with no basis under law, even if that person has never once set foot inside the United States (like Kim Dotcom).
And, he notes, this sort of activity is a huge stain on the US and the federal government:
With this attempt to “colonize” the global internet under U.S. laws, Washington is quickly making a bad name for itself, and putting its considerable influence on the wrong side of digital rights, free markets, and competitive innovation. They do this in the name of protecting a broken business model, subsidizing monopolies, and seeking to destroy crucial online functions instead of adapting to the incredible opportunity afforded to them through mass connectivity. We deserve better, we can do better, and everyone can benefit from a more reasonable approach focused on the best interests of the public, not the best interests of lobbyists and the politicians in their pockets.Even if there isn't a legal human rights angle, it should be interesting to see what Amsterdam turns up. This growing recognition of how laws are created to benefit legacy players, and then used against innovators, is a real problem. Shining more light on that would be tremendously helpful in actually promoting important innovations.
We see this as a grand ideological debate with far-reaching implications, and sadly, my lengthy experience in countries where special interests control the levers of power may have some utility here.
by Mike Masnick
Tue, Jan 22nd 2013 9:32am
Kim Dotcom Hires Human Rights Lawyer To Claim MPAA's Chris Dodd Targeted Him In 'Contract Prosecution'
from the seems-like-a-longshot dept
This strikes me as a huge longshot for a variety of reasons, but it certainly makes for an interesting storyline to follow. If such an investigation actually does get somewhere, there could actually be blowback for those who led the charge against Dotcom. As it stood, it seemed unlikely that, even if the case fell apart, there would be any ramifications for those who championed the cause in the first place. Again, I find it highly unlikely that this exploration will lead anywhere, but Dotcom's legal team has done amazingly well on a variety of fronts to date, so perhaps they know more than has been made public already about all of this.
Also circling is the latest addition to Dotcom’s ever-expanding legal team: Robert Amsterdam of Washington, DC and London-based Amsterdam & Partners. The human rights lawyer says his key work has been in Venezuela, Russia, and Nigeria. Now he's contracted by Kim Dotcom to investigate a possible human rights angle on the Megaupload case—in particular whether one human, former Senator and current MPAA head Christopher Dodd, breached Dotcom’s rights by going out of his way to engineer what Amsterdam said could be seen as a “contract prosecution.”
Amsterdam agrees his work could help Dotcom seek redress from the US government down the track. But his immediate aim is to publicize Dodd’s role. “This prosecution should not be afforded the presumption of regularity," he says. "The way this was done—the helicopters; the rappelling down the buildings [of Dotcom mansion]; the over-reaction—all of these are signs of a classic political prosecution.”
Amsterdam will spend the next two days interviewing the Megaupload team as part of his preparations for a “white paper” he will publish in around two months’ time.
by Mike Masnick
Thu, Jan 17th 2013 9:10am
Megaupload to DOJ: Misleading Semantics Aside, You Told Us You Were Investigating Infringing Files, So We Preserved Them
from the these-things-are-important dept
Megaupload then pointed all of this out to the court, arguing that the DOJ misled the court in getting the warrant in the first place, since it didn't mention the specific circumstances for why Megaupload was aware of the content, but had kept it up. The DOJ's response, from earlier this week, was to argue that since the DOJ never contacted Megaupload directly, none of this matters.
Megaupload has wasted little time in hitting back hard, pointing out that (a) the DOJ was well aware that Carpathia had informed Megaupload of the investigation, (b) that, at the very least, Megaupload's actions in context show non-nefarious reasons for having left the content up (basically arguing the intent) and (c) that, no matter what, the DOJ needed to at least inform the court of these basic circumstances.
Third, the Government attempts to distance itself from what Megaupload was told about the 2010 warrant by emphasizing that it did not directly instruct Megaupload to preserve the allegedly infringing files. (Dkt. 155 at 3.) But it is well settled that a private party's actions are imputed to the Government when that party is enlisted by the Government and acts in accordance with the Government's instructions. Thus, courts confronting criminal searches and seizures have consistently found Fourth Amendment interests implicated where a private party acts as the Government's "instrument or agent." See Skinner v. Railway Labor Executives’ Ass’n, 489 U.S. 602, 614 (1989); United States v. Richardson, 607 F.3d 357, 364 (4th Cir. 2010). As the Fourth Circuit has indicated, "the key factors bearing upon the question of whether a search by a private person constitutes a Government search are: '(1) whether the Government knew of and acquiesced in the private search; and (2) whether the private individual intended to assist law enforcement or had some other independent motivation.'" ....The key point is that even if the government believed Megaupload still could have deleted the evidence that it had explicitly sought from Megaupload (which would be quite surprising), it at least had the duty to make it clear why Megaupload was aware of this content, as that has a pretty direct implication on Megaupload's reasons for keeping the content around.
Here, Carpathia's communications with Megaupload satisfy both prongs. The Government not only knew of Carpathia's actions but orchestrated them. Indeed, the Government's affidavit in support of the June 24, 2010 search warrant expressly requested that "Carpathia and its customer MegaUpload be permitted to view the warrant and Attachments A and B to the warrant to assist them in executing the warrant." ... Correspondingly, the Order sealing that warrant, which "found that revealing the material sought to be sealed would jeopardize an ongoing criminal investigation," authorized the Government to provide the warrant only to Carpathia, and authorized Carpathia to "provide a copy of the warrant with attachments and this sealing order to MegaUpload.".... In conveying the instructions to Megaupload, Carpathia noted that it had "attempted to convince the Government to work directly with Mega on this matter, but given the complex jurisdictional issues, they have been unwilling." .... It is equally clear that Carpathia's sole purpose in communicating with Megaupload on that date was to assist the Government in executing the June 24, 2010 warrant.
Even if the Government could somehow avoid responsibility for Carpathia's instructions and the Magistrate Court's sealing order, there would remain the undeniable fact that the Government failed to inform this Court of critical, exculpatory information about the circumstances under which Megaupload learned of the allegedly infringing files and subsequently cooperated with the Government's investigation. See United States v. Leon, 468 U.S. 897, 926 (1984) (material omissions that render search warrants misleading can be grounds for invalidating warrants);...Once again, it seems like the government simply rushed through the Megaupload case, ignoring many, many important details, and basing its case on the theory that if the entertainment industry hates Kim Dotcom so much, he must be all bad. And, if you're dealing with someone "all bad" apparently the DOJ seems to think it can take a bunch of shortcuts.
by Mike Masnick
Tue, Jan 15th 2013 4:44am
from the that's-how-that-works? dept
However, since this was evidence of potentially criminal activity, Carpathia told Megaupload about it, implying that the DOJ was making it clear that Megaupload should not delete the files.
Notably, the Government avoided communicating with Megaupload directly, instead deputizing Carpathia to do so on its behalf. (See June 25, 2010 email from Phil Hedlund to Mathias Ortmann and Kim Dotcom, Ex. 1 ("Please know that we attempted to convince the Government to work directly with Mega on this matter, but given the complex jurisdictional issues, they have been unwilling").) Far from warning Megaupload that the Government considered it to be part of a worldwide criminal organization, which the Government even at the time was terming the "Mega Conspiracy," the Government, through its anointed agent Carpathia, represented to Megaupload that "[w]e have no reason to believe the [sic] MegaUpload is the target of the investigation."The DOJ has now responded to these claims, and it's done so in its typically misleading fashion. For example, it insists that Megaupload is misleading in its own filing, because the DOJ never directly spoke to Megaupload. They leave out the whole part about the DOJ talking to Carpathia, who had to talk to Megaupload if it wanted to preserve the evidence in question without risk of it being deleted. But, no, in the DOJ's version, this is all just Megaupload fantasy talk.
Megaupload cooperated with the Government and voluntarily arranged with Carpathia to supply the Government with the files identified in the sealed warrant. In accordance with the Government's express admonitions--as conveyed to Megaupload through the sealing order and Carpathia's instructions--Megaupload avoided signaling that anything was afoot or otherwise compromising the investigation, preserving the files in their original condition without alerting users or the public that anything had changed. At no time did the Government or Carpathia indicate that Megaupload could or should remove the files identified in the warrant from its cloud storage platform without compromising the stated secrecy of the investigation, much less did they suggest that Megaupload was legally obliged to do so lest it be complicit in an ongoing criminal conspiracy.
Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government misled the court as part of a conspiracy to entrap Megaupload. For instance, Megaupload alleges that the government "affirmatively [led]" Megaupload to retain certain files on its servers.... Yet Megaupload does not cite a single communication between the government and Megaupload or a single instruction from any member of the government to Megaupload; there are none.Notice the lack of any mention of the Carpathia communications between the DOJ and Carpathia, or between Carpathia and Megaupload. That seems like relevant info that the DOJ conveniently just skips right over.
Is this really the best argument that the DOJ can put forth? The filing also does highlight that the DOJ made other arguments against Megaupload in its filings -- which is true -- but it doesn't mean that the questionable aspects concerning some of the key claims should simply be ignored, as the DOJ would prefer.