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The Crown appealed again and in Marchthe Court of Appeal quashed the previous court decisions.
Crown lawyer John Pike, on behalf of the US Government, argued that the district court had no power to make disclosure decisions in an extradition case and that "disclosure was extensive and could involve billions of emails". The Court of Appeal agreed stating that extradition hearings were not trials and the full protections and procedures for criminal trials did not apply.
In Maythe Supreme Court agreed to hear the case, so it will make the final decision on whether Dotcom should receive all the FBI investigation files before the extradition hearing.
The settlement came after a damages claim was filed with the High Court over the "unreasonable" use of force when the anti-terrorism Special Tactics Group raided his mansion in January Settlements have already been reached between police and Bram van der Kolk and Mathias Ortmann who were also arrested. The New Zealand Herald reported that their settlements were six-figure sums and "it is likely Dotcom would seek more as the main target in the raid".
Commenting on the settlement, Dotcom said: Chief Justice Sian Elias dissented, saying there had been a miscarriage of justice as the search warrant was too broad.
When the US tried to have his bail revoked, a new lawyer, Ron Mansfield, helped keep him out of prison. In making this decision, Judge Tallentire said, "No one can say when that process of extradition will be completed given the appeal paths open to the various accused. Indeed, no one can say if it will ever be completed". Dotcom argued that Key had been involved in a plan to allow him into New Zealand so that he could then be extradited to the US to face copyright charges.
Key had consistently said he had never heard of Dotcom until the day before the New Zealand police raid on his mansion in Coatesville. Three days later, the Prime Minister John Key apologized for the illegal spying. I apologize to New Zealanders because every New Zealander… is entitled to be protected from the law when it comes to the GCSB Government Communications Security Bureau, and we failed to provide that appropriate protection for him. This opened the door for Dotcom to sue for damages — against the spy agency and the police.
Political commentator Bryce Edwards said the GCSB's involvement and the botched search warrants "turned the pursuit of Dotcom and the operations of our law-enforcement agencies into the stuff of farce". A Waikato Times editorial said that the announcement of the illegal spying "heightened suspicions that this country's relationship with the United States has become one of servility rather than friendship.
It is preposterous to suggest Mr Dotcom threatens our national security. The Government's unquestioning readiness to co-operate with American authorities seriously corrodes our claims to be an independent state. The deal was brokered to serve the Mana Party financially, with the combined structure's political campaign in the general election being primarily funded by Dotcom. In contrast, the fledgling Internet Party was to benefit from the possibility of seats in parliament in the event that the combined structure were to achieve a greater percentage of the country's vote, helped along by the Mana Party's existing seat.
On 16 SeptemberDotcom held an event in the Auckland Town Hall five days before the election in which he promised to provide 'absolute proof' that Key knew about him long before he was arrested. Dotcom said in January he had become such 'a pariah' in New Zealand that he might as well leave the country. The Mana connection was dropped and the party contended as the single entity the Internet Party.
He said there were no legal grounds to extradite Dotcom and the allegations and evidence made public by the US Department of Justice "do not meet the requirements necessary to support a prima facie case that would be recognised by United States federal law". Christine Gordon said one message written by Dotcom, when translated from German, read: Mansfield had the passage translated by three independent academics who said it had a very different meaning and should read: He said the US had a "large body of evidence" which supported a prima facie case.
However, Justice Murray Gilbert accepted the argument made by Dotcom's legal team that he and his former Megaupload colleagues cannot be extradited because of copyright infringement. The judge said he made this decision because: However, Justice Gilbert said there were "general criminal law fraud provisions" in New Zealand law which covered the actions of the accused and they could be extradited on that basis.
Both sides are expected to challenge aspects of the ruling before the New Zealand Court of Appeal and eventually the Supreme Court. In particular, the Court, disagreeing with Justice Gilbert, found that, even during the time of Megaupload's operations, it is a criminal offence in New Zealand to possess digital copyrighted works with an intention to disseminate them.
Accordingly, Dotcom and his co-accused could be extradited on the basis of copyright infringement to stand trial in the United States. He said the judge and prosecutor offered him a suspended sentence if he pleaded guilty. I should write a book about doing business in Hong Kong, that's how good it is.Kim Dotcom: The Man Behind Megaupload
Steve Jobs was a hacker and Martha Stuart [ sic ] is doing well after her insider trading case. I think over a decade after all of this happened it should NOT be the dominating topic. I am 37 years old now, I am married, I have three adorable children with two more on the way twin girls — yeah and I know that I am not a bad person.
I have grown and I have learned. Making this into an issue about my past is unfair to everyone else working at Mega. Our business is legitimate. Companies or individuals with concerns that their copyright material was being posted on Megaupload were given direct access to the website to delete infringing links.
Megaupload also employed 20 staff dedicated to taking down material that might infringe copyright. In addition, US privacy laws, such as Electronic Communication Privacy Actprohibit the administrators from looking into the accounts of the users. He explained the close ties of his case to that of Viacom vs YouTube in which the Digital Millennium Copyright Act DMCA shielded YouTube from the infringement of its users and described his surprise when he was arrested without trial or a hearing.
In regard to the illegal spying conducted by GCSB, Dotcom said they were not spying to find out where he was. Government full access to all my communication, without the requirement of a warrant," he said. He states that the US government prosecuted him in return for contributions from the studios to President Barack Obama.
Spies, Lies and the War for the Internet. The book covers aspects of Dotcom's personal life and reveals that he fears for his life. Media reports covering the case highlighted a number of points from the indictment used to support claims of illegal activity.
The indictment provided a number of instances alleged to show criminal behaviour, as well as indicating design points of Megaupload's operating model as being evidence of criminal intent: Continued storage is dependent upon regular downloads of the file occurring.
Files not downloaded are rapidly removed in most cases, whereas popular downloaded files are retained. Adverts are primarily viewed when files are downloaded and the business model is therefore not based upon storage but upon maximising downloads.
It is claimed they have "searched the internal database for their associates and themselves so that they may directly access copyright-infringing content".
Defendants explicitly discussed evasion and infringement issues, including an attempt to copy and upload the entire content of YouTube. Rothken claims that the raid was unjustly swift and did not give his client the opportunity to defend himself, quoting a similar case involving YouTube as an example of a completely different turnout.
Times analysis stated that the author was "struck by how far the indictment goes to find something nefarious";  likewise a TechDirt analysis concluded that while the founder of Megaupload had a significant history of "flaunting the law", evidence has potentially been taken out of context or misrepresented and could "come back to haunt other online services who are providing perfectly legitimate services".
The legal concerns included: Indictment cites lack of a site search as evidence supporting criminality, but in other copyright cases having a site search has been described as evidence in support of criminality and in Atari v.
RapidShare not having a site search was agreed by the court as evidence of responsible activity given that some infringing content might exist and be searched for if one existed. Damned if you do, damned if you don't. But federal court rulings repeatedly agree that no duty exists to search these out.
But many legitimate sites such as Imgur remove unused content after a while to free up server space. If files were routinely deleted after a short period it could equally suggest legitimate use - because it serves users who share legitimately for a short while, and enforces removal afterwards.
Many legitimate files are popular and popularly shared, and an assumption that paid use largely equates to infringing use would need evidence. For example the same content may be uploaded by legitimate and illegitimate users. Removing the infringing link does not affect legitimate uploaders. Removing the infringing file would wrongfully cause it to be deleted for legitimate users too. But other material may be legal for some users and not for others.
Megaupload legal case - Wikipedia
So the fact one case requires file removal and the other only requires link removal may well be correct conduct. But these include "basic payments" for web hosting, suggesting "lumping in" — adding matters that are in no way illegal to make a case look bad.
Safe harbor does not exist if the site has actual knowledge and does nothing about it. The indictment claims that Megaupload executives: According to prosecutors, although numerous takedown e-mails had been sent, none of the files had been deleted.
He also claimed that the indictment relied on a malicious interpretation of technical issues to construe its claim of criminal intent, and that there was significant legal use of Megaupload. Rothkenan attorney who has defended several copyright infringement cases. Ira Rothken stated that there is no criminal liability for secondary copyright infringement under US law, quoting a similar case involving YouTube as an example of similar accusations which were dealt with as a civil case.
The law firm Quinn Emanuelretained by Megaupload to argue for the retention of Megaupload's data, claimed in a motion filed to the court that there was a concerted effort by the United States Department of Justice to deny Megaupload fair legal representation.
In the brief, Quinn Emanuel alleged that several law firms had dropped out of the case after the DoJ wrote to them over potential conflicts of interest, arguing that they wanted to call clients of the firms as witnesses. Given the size of the Megaupload, Quinn Emanuel claimed that this "conflict of interest" argument could be applied to any law firm with experience in intellectual property rights, denying Megaupload experienced representation in a case where both law and technical issues are involved.
Quinn Emanuel received such a letter but rejected the DoJ's arguments. He pointed out that criminal copyright infringement requires that willful infringement has taken place, and that taking Megaupload offline had produced the "deeply unconstitutional effect" of denying legitimate users of the site access to their data. In a judgement in the end of May, NZ Judge David Harvey granted the defendants the right to the disclosure of evidence against them held by the FBI in preparation for the extradition trial.
He also confirmed that the charges in the indictment relating to money laundering, racketeering and wire fraud are not separate criminal acts but dependent on the claim of criminal secondary copyright infringement. The Mega Servers are not in the actual or constructive custody or control of the United States, but remain at the premises controlled by, and currently under the control of, Carpathia and Cogent.