>From my perspective it looks like they were follow the letter of the law on all, or nearly all counts
I used to see them as an agnostic upload bin, but I'm reading the indictment right now, and from my perspective, its certainly questionable.
I'm going to copy some text from the indictment here. I can see legal defenses that they could try to counter these claims, but I don't want to get into that, I just want to put this out there.
I may edit this later with more quotes, if I have time, I've only been skimming and only skimmed a few portions of the document.
>The site complied with DMCA regulations, and removed material when asked
When a file is being uploaded to Megaupload.com, the Conspiracy’s automated system calculates a unique identifier for the file (called a “MD5 hash”) that is generated using a mathematical algorithm. If, after the MD5 hash calculation, the system determines that the uploading file already exists on a server controlled by the Mega Conspiracy, Megaupload.com does not reproduce a second copy of the file on that server. Instead, the system provides a new and unique URL link to the new user that is pointed to the original file already present on the server. If there is more than one URL link to a file, then any attempt by the copyright holder to terminate access to the file using the Abuse Tool or other DMCA takedown request will fail because the additional access links will continue to be available
On or about April 23, 2009, DOTCOM sent an e-mail message to VANDER KOLK, ORTMANN, and BENCKO in which he complained about the deletion of URL links in response to infringement notices from the copyright holders. In the message, DOTCOM stated that “I told you many times not to delete links that are reported in batches of thousands from insignificant sources. I would say that those infringement reports from MEXICO of “14,000” links would fall into that category. And the fact that we lost significant revenue because of it justifies my reaction.”
On or about April 24, 2009, DOTCOM sent an e-mail to BENCKO,ORTMANN, and VAN DER KOLK indicating, “I remembered the steep drop of revenue at thesame time in 2008 and thought that this might have also been caused by careless mass link deletions. This made me very mad, especially because I told you that such mass deletions shouldbe prevented and sources checked much more carefully. I am sure such mass link deletions arealso contributing to a drop of revenue … In the future please do not delete thousands of links atones from a single source unless it comes from a major organization in the US.”
On or about September 4, 2009, a representative of Warner BrothersEntertainment, Inc. (“Warner”) sent an e-mail to Megaupload.com, stating that Warner was “unable to remove links” to copyright-infringing content on Megaupload.com using the AbuseTool. In the e-mail, the Warner representative requested an increase in Warner’s removal limit,which is controlled by the Mega Conspiracy. On or about September 8, the representative sent afollow-up request, and on or about September 9, the representative sent another follow-uprequest. On or about September 10, ORTMANN sent an e-mail to DOTCOM, stating, “They arecurrently removing 2500 files per day - a cursory check indicates that it’s legit takedowns of content that they own appearing in public forums.” ORTMANN also stated, “We should complywith their request - we can afford to be cooperative at current growth levels.” DOTCOMresponded that the limit should be increased to 5,000 per day, but “not unlimited.”
>2) The site did not directly promote piracy, which was Grokster decision.
On or about February 13, 2007, ORTMANN sent an e-mail to VAN DERKOLK entitled “my concerns about the thumbnails table.” In the e-mail, ORTMANN asked VAN DER KOLK to create “a dummy lifetime premium user,” stating that “[t]his is very important to prevent the loss of source files due to expiration or abuse reports.”
On or about October 25, 2008, VAN DER KOLK uploaded an infringingcopy of a copyrighted motion picture entitled “Taken 2008 DVDRip Repack [A Release LoungeH264 By Micky22].mp4” to Megaupload.com and e-mailed the URL link for the file to another individual.
On or about October 25, 2009, VAN DER KOLK instructed a MegaConspiracy employee in German through e-mail how to alter the “featured” videos list onMegavideo.com and the Top 100 Megaupload.com list.
So, MegaUpload.com has two links to a movie file, each created by a different user (user1 and user2). The copyright holder files a DMCA notice against the link created by user1.
Should MegaUpload.com remove the link for user2? The rights holder has not claimed that the second link is offending. It's possible that user2 has the right to distribute the file, but user1 does not.
Dicey indeed. They were playing very fast and loose with 17 USC 512(c)(1)(a)(ii), if not the takedown provisions themselves. The nature of their service makes no distinction between the recipients, regardless of link to the file, and the only difference is which uploader would get points (or whatever reward they had). Its really hard not to give the impression that there weren't just looking the other way. Sites like (IIRC) hotfile.com completly blacklist the md5, even preventing re-upload of files if the get a DMCA takedown.
If a trial goes forward, I expect to see some case law made clarifying this area.
I used to see them as an agnostic upload bin, but I'm reading the indictment right now, and from my perspective, its certainly questionable.
I'm going to copy some text from the indictment here. I can see legal defenses that they could try to counter these claims, but I don't want to get into that, I just want to put this out there.
I may edit this later with more quotes, if I have time, I've only been skimming and only skimmed a few portions of the document.
>The site complied with DMCA regulations, and removed material when asked
>2) The site did not directly promote piracy, which was Grokster decision.