New Zealand High Court rule Kim Dotcom, founder of Megalupload, can be extradited in largest criminal copyright case ever brought by the United States.
In 2005, Kim Dotcom (a German national), founded the business “Megaupload”. This business enabled users to upload files for storage in the cloud by providing users with a unique link to the file, which they could then provide to others enabling them to access the file.
The business also established Megavideo, which allowed users to upload videos to Megaupload and obtain a link, which would provide access to it. A user could repeatedly upload the same video and obtain multiple links. The user could then choose to share these links with others, including through third party websites, enabling them to access the video using Megavideo. Megaupload was not responsible for these linking sites. Only the user could determine whether to make a link available to others.
In March 2010, the Motion Picture Association of America made a complaint of criminal copyright infringement arising out of the operations of Megaupload, leading to a lengthy investigation by the Federal Bureau of Investigation.
On 5 January 2012, the Grand Jury returned an initial indictment against Kim Dotcom and three others. The United States Court issued arrest warrants and made restraining orders in respect of all of the appellants’ assets worldwide. Extradition proceedings commenced in New Zealand on 18 January 2012 when the United States filed a without notice application in the District Court at North Shore and obtained provisional arrest warrants for the appellants. The following day, search warrants were issued.
The United States of America claims the appellants and others were members of a worldwide criminal organisation that engaged in criminal copyright infringement and money laundering on a massive scale with estimated loss to copyright holders well in excess of USD 500million. The case has been touted as one of the largest criminal copyright cases ever brought by the United States.
Denying any wrong doing Dotcom accused the US authorities of pursuing a personal vendetta against him on behalf of politically influential Hollywood studios and challenged the extradition request.
On 23 December 2015 the New Zealand District Court, found that the appellants were eligible for extradition.
The appellants appealed this decision claiming that the Judge made errors of law in virtually every aspect of his eligibility finding. The United States also appealed against several aspects of the judgment.
On 20 February 2017, the High Court in New Zealand upheld the District Courts ruling that Dotcom could be extradited, not however on the basis of committing a copyright offence. High Court judge Murray Gilbert said that there was no crime for copyright in New Zealand law that would justify extradition but that Dotcom could be sent to the United States to face allegations of fraud.
Dotcom’s barrister Ron Mansfield said that outcome was “extremely disappointing” and that his legal team intended to appeal against the extradition order, in what they considered a “politically charged and misunderstood case.”