from the this-is-disappointing dept
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.