Judge's Opinion On Kim Dotcom Shows An Unfortunate Willingness To Ignore Context

from the this-is-disappointing dept

Last night, we posted the news that a judge in New Zealand had ruled that Kim Dotcom and his colleagues were extraditable. Dotcom is appealing the decision, so it’s not over yet. Soon after the decision was announced, the full ruling by Judge Nevin Dawson was released. It’s a staggering 271 pages, and I’ve spent a good chunk of today reading it over. Some parts of it are more compelling than others, and there may even be enough to support the ruling. However, what troubles me is how frequently Judge Dawson appears to totally, without question, accept the US government’s arguments (as relayed by New Zealand prosecutors), despite the fact that many of them are clearly misleading at best, or downright incorrect.

It would take too long to go point by point through the whole thing, but I did want to highlight a few points that I found concerning. The key issue in the extradition fight is whether or not copyright infringement is an extraditable offense. Under the treaty between the US and New Zealand, it is not considered an extraditable offense, which is why a variety of other “conspiracy” charges are piled on in the complaint against Dotcom. Yet, Judge Dawson basically tosses much of that out, arguing that “conspiracy to defraud” is an extraditable offense, and copyright infringement can be a conspiracy to defraud. As Dotcom’s lawyers noted yesterday, this would basically write out the fact that copyright is not an extraditable offense.

However, almost all of this “conspiracy to defraud,” as well as the other issues that the court finds extraditable (such as “money laundering”) are all based on the claims of the DOJ, many of which were presented ridiculously out of context by the DOJ in the original indictment, but which Judge Dawson takes as perfectly accurate, without considering alternative explanations. For example, there’s the question of whether or not Megaupload had its own search engine. As we noted in the original indictment, this is particularly ridiculous. A key reason why the original Napster got shut down was because it had a search engine, which the court used to argue that it was more involved in the infringement. Thus, there’s a strong argument for why a site should not have a search engine, in order to make it harder to find infringing materials. Yet, the DOJ argued that this was part of the “conspiracy” and that it showed that Megaupload was trying to hide the infringing activities from law enforcement. Damned if you do, damned if you don’t. But Judge Dawson flat out accepted the DOJ’s argument. Judge Dawson quotes a Skype discussion between two of Dotcom’s colleagues, Mathias Ortmann and Bram Van Der Kolk, in which Ortmann notes that “searchability is dangerous and will kill us.” And the judge concludes:

There was so much infringing content on the sites that its presence had to be disguised and made non-searchable. Traffic flowed to this content through third party sites.

That’s one interpretation. A more plausible explanation could be that these guys didn’t want to make their site easy to use for infringement and thus didn’t make the material searchable. Instead, that’s used against them.

Elsewhere, the judge uses a discussion between Kim Dotcom and Ortmann about how to make sure the service is “invulnerable” to legal challenges as proof that they “appreciated that Mega operated unlawfully and was at risk of being shut down by a court.” Of course, a perfectly reasonable alternative explanation is that their discussion was on how to make sure they were not unlawful and not at risk of being shut down by a court. There are plenty of business discussions that tons of businesses could have like this that, devoid of context, could be presented in this misleading way. Any time any two executives from a business were to discuss specifics of making sure their business is legal could then be misrepresented as evidence that they “knew it operated unlawfully and was at risk of being shut down by a court.”

There are lots of other examples of this, including conversations between basically all of the defendants discussing (and sometimes joking about) the possibility of lawsuits (most of which they assume would be civil lawsuits). But just because you think you might get sued is hardly evidence of a conspiracy or belief that what you’re doing is illegal. I’ve had many discussions with our lawyers about doing things to protect ourselves from getting sued. That doesn’t mean I believe I’m operating illegally. It means I understand the legal environment we operate in, where lawsuits happen frequently, and I’d like to minimize the risk. But in this case, every hint of Megaupload doing the same is treated as an admission of knowingly breaking the law. It’s true that there are some conversations that do seem to go beyond this point, such as when Ortmann and Van Der Kolk complain that the business can’t be sold because it’s not “legit” — so it’s reasonable to argue that those are enough. But, so many of the conversations seem to be spun so far beyond reality that it makes the evidence appear a lot stronger than it really is.

Some of the evidence is just outright ridiculous. At one point, Ortmann sends Dotcom a link to an agenda for an “IP Crime Conference” that was hosted in the same building that was officially Megaupload’s headquarters (a Hong Kong hotel) with the tagline “in the lion’s den.” The judge concludes that from this you can infer “Mega’s business was copyright piracy.” Huh? How is that a reasonable inference?

Now, I know that some folks are already banging angrily below in the comments about this, pointing out that of course Megaupload was used for infringement, and all of this is just hand-waving to ignore that fact. But that’s not what I’m doing here at all. Yes, it’s quite clear that Megaupload was widely used for infringement. But that alone is not a criminal offense. When the VCR was first introduced, it was widely used for infringement. When the mp3 player was first introduced, it was widely used for infringement. When the DVR was first introduced. Tape players. Photocopiers. Radio. But that alone does not constitute a criminal offense. Yet, here the judge seems to think that any weak inference that the execs at Megaupload knew that their service was used for infringement implicates them in a criminal conspiracy.

That seems incredibly problematic.

Similarly, as the DOJ did in its indictment, the Judge focuses a lot on the “incentive” program that Megaupload put in place, whereby users who post files that get a lot of downloads could profit from those downloads. The claim by the DOJ, and totally accepted by Judge Dawson, is that this is proof that they were encouraging infringement. But, again, such a program could just as easily be useful for non-infringing purposes as well. If you were a singer and wanted to give away your music for free, but still profit from it, you could see how this could be a compelling business model. In fact, some major recording artists, such as Busta Rhymes, were excited about using Megaupload in just this manner. Yes, obviously some would use this to post infringing files, but again the fact that some users could misuse the service does not mean the company’s execs are criminals.

For example, the court uses the fact that Ortmann and Van Der Kolk messaged each other about how uploaded files in the program are “not yet” being “audited for copyright violation” as evidence that the program was designed to drive infringement. But there is no requirement under the law to proactively monitor the content for infringement. Later the judge uses the fact that the incentive program was purposely designed to “attract new users” and to reward “huge uploaders” as evidence that “this was not cyberlocker activity but mass distribution of illicit content.” Again, this presumes that the only possible use for a cyberlocker is to store personal data, and not to use it to distribute and share files (many of which may be perfectly legitimate).

Again, some of the other statements may cross the line — including discussions about specific users where the defendants appear to recognize that certain files are infringing. There are also discussions about whether to cut off incentive payments in cases where they know a user is uploading infringing material (where they don’t cut off those payments). Those may be the most damning. But, again, straight up copyright infringement isn’t supposed to be an indictable offense. And it’s all this other stuff that the judge uses to argue some wider “conspiracy to defraud.”

Also, as has been pointed out time and time again, there is no such thing as “secondary” criminal copyright infringement. That is, it’s not a criminal offense if your tool is used by someone else to infringe. But all that basically gets ignored.

There’s a lot more in there, and it’s worth reading through and looking at all of the arguments and evidence. I can see why the judge ruled the way he did. And much of it is similar to the arguments in the original indictment. And, again, there may actually be enough in there for the extradition to go forward, but so much of it seems bound up in taking statements out of context that it seems pretty sketchy. If those kinds of arguments were dropped, and the ruling focused just on the clear evidence of some sort of plan to “defraud” it would seem like a much stronger argument. The fact that piece of evidence after piece of evidence just seems so… weak, raises serious questions about the whole decision.

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Companies: megaupload

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Comments on “Judge's Opinion On Kim Dotcom Shows An Unfortunate Willingness To Ignore Context”

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Anonymous Coward says:

Re: Re: Re: Re:

Because the DOJ is insisting that they only be allowed to prove it when Dotcom is stuck in the DOJ’s field where the DOJ has all the home advantage?

The DOJ has been playing this game of “Sure I’ll let you prove yourself innocent, but only if you stick your neck on this block” for four years.

That One Guy (profile) says:

Re: Re: Re:2 Re:

‘The sheep is absolutely allowed to present it’s case and argue for why it’s better for it not to be eaten, all it needs to do is walk into the wolf’s den to do so. Refusal or hesitation to take the offer is a clear sign that the sheep doesn’t believe that it has a real case, and it should accept being eaten.’

Anonymous Coward says:

Re: Re:

You mean Poisoned Fruit doctrine doesn’t apply to scumbags?

That makes it worse – that the DoJ thinkt hey can just steamroll over any legal inconsistencies in their arguments. But hey, it’s only Kim, right? He’s an asshole, and laws shouldn’t apply.

…Think on that the next time you bitch about legal overreach in any circumstance.

Anonymous Coward says:

Re: Re:

LOL no, he is not facing extradition for money laundering. This whole thing has been about copyright and the US gov’t and some of the New Zealand gov’t was more than willing to jump into action without any evidence of a crime when Hollywood cried. The problem is copyright infringement is not an extraditable offense so the DOJ added some other extraditable charges in there hoping someone might believe their fairy tale and send him over to the US. The whole thing has just been a complete mess by the DOJ and it’s shameful what they are doing to all of those guys.

Whatever (profile) says:

Re: Re: Re:

Glad you ain’t a lawyer!

Black letter law. You can be charged with laundering money from a source that has not yet been declared illegal if it’s part of the same criminal proceeding. So he is charged with illegally selling access to copyright material and then charged with laundering the proceeds of this criminal act.

You don’t have to step through them one at a time.

Peter (profile) says:

Re: Money Laundering

How much money did he launder, then? The only number the DOJ throws around are the $ 500 m Hollywood MIGHT have made if all the movies that have allegedly been shared on Megaupload had been purchased at Hollywood’s RRP.

If the case is about Megaupload subscriber fees, more precisely the fraction of those fees that may relate to subscribers sharing content without authorisation, the case shrinks to a few million at most. Hardly worth the effort the US and NZ governments and their law enforcement agencies put into it.

More important – if the case is about money laundering, why does the DOJ discuss allegations of file sharing instead of presenting their evidence of file sharing? And what is the MAFIAs role in the money laundering case? Expert witness?

Peter (profile) says:

A Christmas Wish ....

The DOJ and the US government are showing a lot of creativity here to crucify someone who, technically, hasn’t really broken a law.

If they were to bring the same eagerness to prosecuting those responsible for some of the excesses in the war on terror, in police brutality and asset forfeiture, they could really make the world a better place.

MadAsASnake (profile) says:

I’ve had a short read of this and I too find it a little disappointing. Judge Dawson, in my view, relies too heavily on the DOJ case. The part that struck me was the discussion over Secondary Copyright Infringement and whether it is a criminal offense. The judge accepts that it is simply on the base that Jay Prabhu is the US Attorney General and has signed a document stating that it is. The testimony of one of the top US lawyers in the field with that, and that this should be decided in a US trial, as he says with so much.

There are other issues that appear problematic, not least the casual disregard law enforcement in both NZ and the US have shown for the law. Aside from the theatrics of the raid, it is clear that much of the evidence was seized illegally and should not be admissible.

While I am sure a lot of this is allowed for in the extradition treaty, there was plenty there for a questioning judge to be critical of. Shame Dawson lacked the balls.

Anonymous Coward says:

To sum up

We have a terrorist criminal gang (the DOJ) seeking revenge on a foreign business because he has not paid his dues (bribes) like the RIAA has. Score one for RIAA. Score negative 10 to DOJ in world opinion for bungled execution. They are forever, lying, duplicitous, douche bags for trying to build a case from thin air based on vague allegations from the RIAA. Whose yer daddy bitch?

Anonymous Coward says:

Pulling at straws

—-A more plausible explanation could be that these guys didn’t want to make their site easy to use for infringement and thus didn’t make the material searchable. Instead, that’s used against them.

No, a more plausible explanation is that they knew there was lots of infringing content and if it was searchable it would be easier for content owners to find their content then issue takedown notices. And they know having a search engine was part of Napster downfall and they would like to avoid that.

I personally don’t think it is a crime for them to be aware their site can and is used for infringement, heck that applies to every site that allows users to share stuff.
I don’t think it’s a crime for them to take steps to avoid the slippery slope to “inducing” infringement as they have done here.

If taking steps to avoid breaking the law is a conspiracy then every business on the planet is guilty. That’s what makes the conspiracy charges complete BS.

Is providing a site for users to share stuff a crime? No
Is not providing a search engine for the stuff users share a crime? No
Is not giving a crap what your users share a crime? No, if users a breaking the law charge the users.
Is removing infringing content only when you are made aware of specific instances a crime? No

That’s how I see it, show me an actual crime that they committed.

That One Guy (profile) says:

Re: Pulling at straws

No, a more plausible explanation is that they knew there was lots of infringing content and if it was searchable it would be easier for content owners to find their content then issue takedown notices.

At the same time though one could argue that the very same system that enabled content owners to find their content would make it easier to ‘facilitate infringement’, increasing how much of it occurred, so by not having a search engine both content owners and potential infringers had a tougher time finding what they wanted.

MU was really screwed no matter what they did as far as the ability to search the site went. If they had a way to search, then that’s ‘facilitating/encouraging infringement’. If they didn’t, then they were ‘trying to hide infringement’.

Anonymous Coward says:

surely it shows, more than anything else, how those in whatever position, but obviously important, can be influenced to do exactly what the USA entertainment industries mostly the MPAA and RIAA want! it matters not what the law says in the other countries or, for that matter, in the USA, those industries have plied so many with so much, they can get whatever they want! the really shameful thing is, one of the most pro MPAA people is the judge who has been residing on the case in the USA, so he is so biased already, giving the DoJ whatever they want, he should never be allowed to sit on any copyright/file sharing case!!

GEMont (profile) says:

Conspiracy to commit mass muggery. Legally.

Methinks this be a “precedent” case, that is, by winning this case, Hollywood has won a set of usable legal means to make its US law enforcement arm chase down and charge just about anyone, for just about anything, using just about any method at hand.

Since Hollylaw Enforcement has used just about every dirty trick in the book and invented a bunch of new ones in order to destroy Dotcom, if they can pull this farce off in broad daylight without public outcry, then the sky is the limit for all future violations of rights against anyone that pisses off Hollywood.

Especially considering the bonus they get from all of those phony “trade deals” that increase the public perception of “evilness” of copyright infringement.

And that methinks, is the plan Stan.

I think this is what they meant when the Mob said it wanted to use the proceeds of its criminal enterprises to turn legit.

Not that the Mob would start to obey the laws, but that the laws would be made to obey the Mob.

Whatever (profile) says:


I think the judge got the context right. The real context here is that this is an extradition hearing, and not a criminal prosecution. Just like a civil case, the standards for extradition isn’t absolute certainty and a conviction. It’s only that the prosecution has some semblance of a reasonable case.

All that you argue here is guilt or innocence. That isn’t the point. Context is VERY important.

Anonymous Coward says:

You could take a number of these added claims and apply them to many other business’ that are considered “legit”, such as You Tube and their payback system, software developers used Megaupload legitimatley,

So what is this, justice based on political correctness? Selective enforcement? Is the court ignoring various attempts by the US to obstruct / tamper with evidence? There’s a lot of corporate crime that goes without similar level of criminal charges.

I think the day is coming that both systems of “justice” in the US will go by different names. This has become a new normal.

Anonymous Coward says:

Re: Re:

the DoJ illegaly went after the sex industry, gun manufacturers and other law abiding citizens they did not like by forcing banks to shut down accounts belonging to people associated with said industries. All because they did not like what these people did legally so they conspired to deprive them of their rights and belongings.

Operation chokepoint.

GEMont (profile) says:

Re: Re: Re:

Actually, that particular “operation” was designed to eliminate the non-complying competition, legally, for members and friends of the USG.

If the Guv don’t get its cut of the profits, then there is no place on earth you can hide your money from their legal wrath and greedy grasp.

Result: No competition equals quality and pricing control heaven.

Anonymous Coward says:

Looking forward to the circus coming to town.

I imagine this one will bring some protests. Maybe they’ll just do it in the secret squirrel court and we’ll never get to have a parade. I’d be very disappointed though. Maybe he can seek refuge in a central american embassy? Nope. He’d pirate T-shirt logos threatening the FTZ labor camps.

Hmm. Maybe Russia?

Really I think the DOJ is just pissed nobody listens to the Beatles back catalog anymore. You know, those songs they use during the credits to squeeze that last little squirt of poop out of their copyright holdings?

Hey DOJ! There is SO MUCH GOOD INDY MUSIC coming out right now, that nobody cares about these crusty old mobsters anymore. Please stop spending tax dollars on stupid shit while AIG execs still walk free.

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