Media Release

Kim Dotcom Internet Copyright Case White Paper:

U.S. Accuses Kim Dotcom of Crimes That Don't Exist in U.S. Law

Call for Congressional Action

Millions of Cloud Storage Users Around the World Lose Their Data

Members of the legal defense team representing internet entrepreneur Kim Dotcom have released a new White Paper, stating that the crimes he's accused of do not exist under US law and that the prosecution was carried out at the behest of special interest groups close to the Democratic Party.

The United States has charged Kim Dotcom with criminal liability for the acts of his Megaupload cloud storage users, a form of secondary copyright infringement, but no criminal statute for secondary copyright infringement exists, the White Paper states.

Millions of Megaupload cloud storage users around the world lost access to their data because of the U.S. government's take-down of Megaupload.com.

"The vast range of abuses committed in this case raise serious questions as to whether the Department of Justice is carrying out a 'contract prosecution' against the defendants," said Kim Dotcom's international human rights lawyer Robert Amsterdam.

"The U.S. actions against Kim Dotcom set a frightening precedent for the basic rights of internet users and innovators of new technologies. Frankly, the lies that were told to friendly governments and the illegal spying on Kim Dotcom demonstrate a gunslinger attitude to rule of law."

The U.S. launched the action against Kim Dotcom and his Megaupload cloud storage service a day after Hollywood's chief lobbyist, former Democrat Senator Chris Dodd, openly threatened to withhold donations to Barack Obama's 2012 re-election campaign unless the administration took action against Hollywood's perceived copyright threats.

Megaupload.com was one of the world's biggest and most successful cloud storage services, with one billion unique visitors per year, more than 60 million registered users and an average 50 million daily visits. It was the 13th most frequently visited website on the internet and accounted for about 4% of total internet traffic.

"The U.S. government acted illegally when it took down one of the world's largest cloud storage services without any notice or chance for Megaupload to be heard in a court of law and by omitting exculpatory evidence in their submissions to the court. The result ignores substantial non-infringing uses of cloud storage and is both offensive to the rights of Megaupload and to the rights of millions of consumers worldwide, who stored personal data with the service," said Ira P. Rothken, counsel for Kim Dotcom and Megaupload.

Mr Dodd is head of the Motion Picture Association of America (MPAA), which represents Hollywood's big six film studios. The MPAA is a major donor to the Democratic Party. Vice President Joe Biden and Mr Dodd were for nearly 30 years Democratic Party colleagues in the US Senate. Mr Biden has said that Mr Dodd is "one of my best friends in life".

"The motivation for the Obama administration's action against Kim Dotcom and Megaupload appears to be more related to its role as fundraiser-in-chief for the Democratic Party than as the defender of the American constitution," said Mr Amsterdam.

"The U.S. government's take-down of Megaupload and Kim Dotcom has ramifications far beyond a single company and its executives. It sets an alarming precedent for regulation of the internet, freedom of expression, privacy rights and the rule of law. The U.S. government should not be able to act outside the bounds of due process, at the behest of special interest lobbies, to destroy foreign-owned business enterprises and expropriate the private property of millions of individuals.

"In response to the unlawful conduct of the US government, we call on the U.S. House Committee on Oversight and Government Reform, and the Office of Professional Responsibility of the U.S. Department of Justice to conduct an investigation and hearings into the conduct of the Megaupload prosecution by the U.S. Department of Justice. In particular, the issue of special-interest influence over the executive branch and the failure of the Department of Justice to protect Megaupload consumer data access should be scrutinized."

Robert Amsterdam and Ira P. Rothken are the co-authors of the White Paper, a full copy of which is available at www.robertamsterdam.com/kimdotcom and www.techfirm.com.

The U.S. is seeking to extradite Kim Dotcom from New Zealand, where he resides. Kim Dotcom's international legal team is challenging the extradition proceedings.

The US Actions - No Basis in Law

Key Legal Points

1. The United States has charged Kim Dotcom and the rest of the Megaupload defendants with criminal copyright infringement for the acts of cloud storage users, a form of secondary copyright infringement, but no criminal statute for secondary copyright infringement exists under US law. The attempt by prosecutors to expand criminal liability to secondary copyright infringement goes against established precedent in case law and repeated positions taken by the US Congress.

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" do not apply in criminal proceedings. Courts and judges cannot create a new criminal liability, only Congress can by enacting legislation. Federal crimes must be expressly authorised by statute; the courts have no power to impose or create a basis for criminal liability beyond what's authorised by statute.

2. Cloud storage services such as Megaupload are a dual use technology capable of substantial non-infringing uses and therefore protected under the Sony doctrine. Any kind of online service, including cloud storage services, are susceptible to misuse by some customers. Megaupload instituted several measures to comply with global "safe-harbor" provisions such as those under the Digital Millennium Copyright Act (DMCA). Megaupload cooperated with copyright owners by following the "notice and takedown" procedures described in the DMCA millions of times.

The recent federal court decision in Viacom v YouTube upholds the safe-harbour provisions of the DMCA, declaring unequivocally that generalized knowledge of copyright infringement does not deprive a service provider of those protections. The court noted that service providers serve a useful function. Given the volume of content being uploaded/downloaded on a site like YouTube "no service provider could possibly be aware of the contents of each such video." Congress put the burden on the copyright owner to notify the service provider of infringements, in writing and with specified contents. The court concluded that the burden could not be shifted back to YouTube to disprove its knowledge. The Viacom court also emphasized that YouTube was not required to affirmatively seek out or locate any infringing material; it had no duty to do so.

Megaupload went above and beyond what it was legally required to do under the DMCA's safe-harbour provisions. It negotiated with numerous major copyright holders or their agents, including the Recording Industry Association of America, Disney, Warner Brothers, NBC and Microsoft, to allow them access to remove directly an active link to material they believed infringed their copyrights. This direct access enabled such parties to protect their copyrights in a fast and automated fashion and resulted in more than 15 million take-downs.

3. Criminal copyright infringement requires willful infringement – a very rigorous level of criminal intent – and it is one of the rare criminal claims where both ignorance of the law and a defendant’s mistaken belief that he is compliant with the law are complete defenses. Megaupload immediately responded to copyright take-down notices from copyright holders on millions of occasions. The company’s subjective belief that it was operating within the law (even if it turns out to have somehow been wrong in that regard) should by itself be enough to negate the criminal willfulness requirement, especially considering the novel nature of the prosecution’s legal theory.

Megaupload, the Copyright Lobby,and the Future of Digital Rights: The United States v. You (and Kim Dotcom)a White Paper by Robert Amsterdam and Ira P. Rothken:

Kim Dotcom White Paper (PDF)
One Page SUmmary of Legal Points (PDF)

ENDS

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