New | Kim Dotcom vows to appeal as NZ ruling upholds US piracy arrest

A New Zealand court on Wednesday ruled that the search warrant used in the arrest of Kim Dotcom on US online piracy charges was legal, dealing a blow to the internet entrepreneur who is fighting extradition to the United States. Hours after the ruling, the Megaupload founder vowed to appeal before the Supreme Court.

Acting on the request of US authorities, the New Zealand government successfully appealed a 2012 ruling that police used illegal warrants when they arrested the tycoon in January 2012 at his mansion near Auckland and seized laptops and hard drives.

The decision will benefit US prosecutors who say the Megaupload website cost film studios and record companies more than US$500 million and generated more than US$175 million in criminal proceeds by letting users store and share copyrighted material, such as movies and TV shows.

If Dotcom is extradited, the ensuing copyright case could set a precedent for internet liability laws and, should he win, could force entertainment companies to rethink online distribution methods.

Wednesday’s ruling overturned an earlier High Court decision that the search warrants were vague and enabled police to seize materials irrelevant to the charges against Dotcom.

But the appeals court said the warrants were adequately worded and should not have caused misunderstanding.

“A reasonable reader in the position of the recipients of the search warrants would have understood what they related to,” the appeal court judges said in a statement.