The U.S. government shut down popular file-storage service, Megaupload, in a 2012 criminal raid, and is still seeking to extradite the site’s CEO, Kim Dotcom, from New Zealand. Now, Disney and five other movie studios have piled on with a civil lawsuit over unauthorized downloads of films like Harry Potter and Transformers.
In a complaint filed in Virginia this week, the studios claimed Megaupload and its owners rewarded users for uploading copyrighted content, and ran a hub where users could obtain a large library of popular movie and TV shows. It said Megaupload systematically ignored evidence of infringement:
For example, even though defendants received more than 85 notices regarding a particular user’s infringing uploads, defendants paid that user $3,400 pursuant to the Uploader Rewards program.
The studios didn’t name a specific damage amount, but the claim could run into tens or hundreds of millions of dollars because the studios are seeking the statutory maximum of $150,000 per infringement. An exhibit to the complaint (embedded below) list dozens of example films, including Back to the Future, Avatar and Forrest Gump.
While Megaupload touted its service as a secure storage locker, the studios claim that its real business model was piracy; the studios claim the site owners earned its revenue through premium subscriptions that let users watch full-length movies, and from advertising against copyrighted content.
While the studios are likely to triumph in the copyright case, the bigger question is whether they will be able to get anything out of Dotcom and the other defendants. While Dotcom regularly flaunted yachts and other signs of wealth before his arrest in 2012, it’s unclear if the studios will be able to get their hands on it — or even identify the country where Dotcom stores his assets in the first place. In the meantime, the U.S. government has had recent success overcoming procedural obstacles in seeking to extradite Dotcom from New Zealand.
Here’s the complaint, which also names other executives and investors in Megaupload:
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