Comments on the Megaupload Prosecution (a Long-Delayed Linkwrap)

By Eric Goldman

[I’ve been working on this linkwrap for 3 months. Linkwraps rarely improve with age. At this point, it’s not even clear the US government has a case due to its repeated gaffes. Nevertheless, I’ve decided to post this linkwrap now because–regardless of its disposition–the Megaupload prosecution is an incredibly important Cyberlaw development that almost certainly will make my top 10 year-end list.]

While there could be a small amount of provable criminal copyright infringement—under our modern overexpansive criminalization of ordinary daily activities—for infringing files the Megaupload principals uploaded themselves, the government ordinarily wouldn’t have cranked up its massive machinery for those violations. After all, millions of Americans routinely commit violations like that, and mass panic would be at hand if the government exercises its prosecutorial discretion so loosely.

Instead, the government’s prosecution of Megaupload demonstrates the implications of the government acting as a proxy for private commercial interests. The government is using its enforcement powers to accomplish what most copyright owners haven’t been willing to do in civil court (i.e., sue Megaupload for infringement); and the government is doing so by using its incredibly powerful discovery and enforcement tools that vastly exceed the tools available in civil enforcement; and the government’s bringing the prosecution in part because of the revolving door between government and the content industry (where some of the decision-makers green-lighting the enforcement action probably worked shoulder-to-shoulder with the copyright owners making the request) plus the Obama administration’s desire to curry continued favor and campaign contributions from well-heeled sources.

The resulting prosecution is a depressing display of abuse of government authority. It’s hard to comprehensively catalog all of the lawless aspects of the US government’s prosecution of Megaupload, so I’ll just focus on two:

1) Trying to hold Megaupload criminally liable for its users’ actions. Criminal copyright infringement requires willful infringement, a very rigorous scienter level. I discuss the implications of this high scienter requirement in more detail in my decade-old article on warez trading. Megaupload’s business choices may not have been ideal, but Megaupload has a number of strong potential defenses for its users’ activities, including 512(c), lack of volitional conduct and more. Whether it actually qualified for these is irrelevant; Megaupload’s subjective belief in these defenses should destroy the willfulness requirement. Thus, the government is simply making up the law to try to hold Megaupload accountable for its users’ uploading/downloading.

2) Taking Megaupload offline. Megaupload’s website is analogous to a printing press that constantly published new content. Under our Constitution, the government can’t simply shut down a printing press, but that’s basically what our government did when it turned Megaupload off and seized all of the assets. Not surprisingly, shutting down a printing press suppresses countless legitimate content publications by legitimate users of Megaupload. Surprisingly (shockingly, even), the government apparently doesn’t care about this “collateral,” entirely foreseeable and deeply unconstitutional effect. The government’s further insistence that all user data, even legitimate data, should be destroyed is even more shocking. Destroying the evidence not only screws over the legitimate users, but it may make it impossible for Megaupload to mount a proper defense. It’s depressing our government isn’t above such cheap tricks in its zeal to win.

The government has also been shockingly cavalier about the collateral consequences of its prosecution on the marketplace. Legitimate web hosts, and their investors, are quaking in their boots that they will be next. It doesn’t help that the content industry is circulating a “kill chart” of its next desired targets.

In the end, the Megaupload prosecution demonstrates that SOPA advocates are inevitably going to win. The content owners’ ire toward “foreign rogue websites,” combined with the administration’s willingness to break the law, if necessary, to keep content owners happy, leads to lawless outcomes like the Megaupload prosecution and ICE’s domain name seizures. I’ll say more about this in my long-delayed SOPA linkwrap.

Some links about Megaupload or the situation more generally worth checking out:

Source Materials

* Superseding indictment

* Some of the assets seized

Analysis of the Enforcement

* EFF: Megaupload Goes to Court: A Primer

* Ars Technica: How can the US seize a Hong Kong site like Megaupload

* Techdirt: Megaupload Details Raise Significant Concerns About What DOJ Considers Evidence Of Criminal Behavior

* How did the FBI get access to internal Megaupload conversations?

* Ars Technica: Megaupload: Erasing our servers as the US wants would deny us a fair trial

Collateral Effects

* Phil Corwin on collateral effects

* FileSonic changed its sharing practices in light of the prosecution

* TorrentFreak: RapidShare Publishes Anti-Piracy Manifesto for Cyberlockers

* RWW: Feds to Megaupload Users: Tough Luck

Revolving Doors/Patronage

* Nobody wanted MegaUpload busted more than MPAA

* U.S. Attorney chasing MegaUpload is former piracy fighter


* CMLP site on Megaupload

* Irina D. Manta, The Puzzle of Criminal Sanctions for Intellectual Property Infringement, 24 Harv. J.L. & Tech. 469 (2011)