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MPAA Warns of Megaupload 'Relaunch' If Servers Are Transferred

Giving Megaupload back data would constitute a violation of studio rights, says a legal filing by the MPAA today

Kim Dotcom in custody - H 2012
Getty Images
Megaupload founder Kim Dotcom

The MPAA is objecting to the transfer of Megaupload data, saying in a court filing today that it could pave the way to a relaunch of the controversial file-sharing service.

The response comes two weeks after Carpathia, Megaupload's Virginia-based server host, filed an emergency motion to allow it to do something with the 25 petabytes of data it was holding. Carpathia wanted relief from the $9,000 it was spending per day to retain the data.

The question of what to do with that data has been of some controversy since Megaupload founder Kim Dotcom and others were indicted in a massive copyright action in January. The MPAA says that after Megaupload's founders were arrested, it learned that Carpathia has agreed to sell the data back to Megaupload, "with all the film and TV content intact." In addition, one Megaupload user has filed a motion to create a receivership that would allow all users who posted to Megaupload to be allowed to retrieve their data.

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The MPAA says it doesn't mind if Carpathia powers down the servers but expresses concern about what might happen if the company is allowed to transfer the data. In a filing today, the MPAA says:

"A sale or transfer of the servers to Megaupload (or any of the defendants) would raise a significant risk that Megaupload will simply ship the servers, hard drives or other equipment -- and all of the infringing content they contain -- to a foreign jurisdiction and relaunch the infringing Megaupload service, which would result in untold further infringements of the MPAA members’ copyrighted works. If so, the renewed criminal enterprise might be beyond any effective legal remedy."

The association of Hollywood studios also asserts ownership over much of the content contained on the servers and is expressing a noteworthy legal theory that distribution of the material would in and of itself be a violation of rights.

"The sale or transfer of those copies from Carpathia to Megaupload or any other third party would constitute an unauthorized “distribut[ion] … to the public” under the Copyright Act," says the MPAA in its legal filing.

The MPAA also says that Megaupload has been given access to inspect the data in preparation of its defense, but adds:

"In these circumstances, it seems likely that the only reason Megaupload and its co-defendants sought to purchase the 25,000 Carpathia servers (and incur the expense of buying, transporting and housing them) was simply to be in position to relaunch the Megaupload service in the near future."

The studios say they are "sympathetic" to users who were caught up in the allegedly illegal activity of Megaupload but insist that users had to know the risks when they signed up for the terms of Megaupload's service, which disclaimed any guarantee of continued access. The MPAA says that if a mechanism is set up so that users can retrieve their data, it has to be carefully set up so that no illegal files are downloaded. As for the full scope of Megaupload data, there's only one party that the MPAA would agree to allow to have it. The studios say they are fine with Carpathia's suggestion that the servers be transferred to the U.S. government.

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner