Big film studios sue Kim Dotcom and Megaupload for infringing copyright

PUBLISHED : Tuesday, 08 April, 2014, 8:51pm
UPDATED : Wednesday, 09 April, 2014, 2:07am

Several major US studios filed a copyright infringement lawsuit against the file-sharing website Megaupload and its ebullient founder, Kim Dotcom.

Megaupload, the formerly Hong Kong-based site which US authorities shut down in 2012, facilitated a "massive copyright infringement of movies and television shows", according to a statement issued by the Motion Picture Association of America (MPAA) on Monday.

The plaintiffs in the lawsuit, all MPAA members, are Twentieth Century Fox Film Corporation, Disney Enterprises, Paramount Pictures, Universal Studios Productions, Columbia Pictures and Warner Brothers Entertainment.

"Megaupload wasn't a cloud storage service at all, it was an unlawful hub for mass distribution," Steven Fabrizio, an attorney for the MPAA, said in the statement.

US authorities allege Megaupload cost film studios and record companies more than US$500 million and generated more than US$175 million by encouraging paying users to store and share copyrighted material, such as films and TV shows.

Dotcom says Megaupload was merely an online warehouse and should not be held accountable if stored content was obtained illegally.

Monday's lawsuit, filed in the US district court for the Eastern District of Virginia, said Dotcom and other defendants "profited handsomely" by providing thousands of copyrighted works over the internet to millions of Megaupload users without authorisation or licence.

Movies whose copyrights Megaupload infringed, according to the lawsuit, include Avatar, Forrest Gump and Transformers, according to the lawsuit.

Commenting on Twitter on Monday, Dotcom said US authorities "probably demanded" that the studios file the lawsuit "because they initiated this ... Hollywood science fiction script of a case. Embarrassing."

The lawsuit is seeking unspecified damages as well as lawyers' fees. It claims the studios are entitled to Megaupload's profits and up to US$150,000 per infringement.

The lawsuit comes as Dotcom is fighting a bid by US authorities to extradite him from New Zealand to face online piracy charges over the now-closed website. He is also known as Kim Schmitz and Kim Tim Jim Vestor, according to the lawsuit.

Dotcom's US attorney, Ira Rothken, said that Monday's suit was a way for the country's film industry to go after Megaupload if the US Department of Justice fails to extradite Dotcom. An extradition hearing is scheduled for July.

"The MPAA is suddenly realising that we're a few months away from the extradition hearing, and once Kim Dotcom and the others prevail in the extradition hearing they'll have more resources and more assets," Rothken said.

"The MPAA wants to have cover if the Department of Justice fails in the extradition and the criminal case."

He predicted that the judge in the civil suit would probably stay the case pending the extradition hearing, adding that Megaupload would also seek access to evidence stored on its servers housed in Virginia to defend against the suit. Dotcom has been denied access to that evidence for the extradition hearing.