Major record labels Warner Music, UMG, Sony and Capitol Records on Thursday followed Hollywood studios in filing a copyright infringement suit against Megaupload, accusing the site of fostering and even promoting access to pirated music.
In the suit, the labels say that Megaupload “played an active role in ensuring that it had the most popular content on its servers, that the URL links to those infringing content files were widely disseminated on the Internet, and that the links were advertised and promoted by pirate linking sites.”
The record labels are seeking unspecified damages, whether that be actual damages and Megaupload’s profits, or statutory damages, the maximum of which is $175,000 per case of infringement. The suit was filed in federal court in Alexandria, Va.
The suit claims that Megaupload has generated more than $175 million in “illicit profits” from copyright infringement, while “causing more than half a billion dollars in harm to copyright owners.”
Also named in the suit are Megaupload founder Kim Dotcom, Mathias Ortmann and Bram van der Kolk. They are facing charges of federal criminal copyright infringement after the Department of Justice issued an indictment in January 2012. That case has been mired in proceedings to extradite Dotcom from New Zealand, where he has defended his site and even appeared on “60 Minutes” in December.
The record labels’ suit, filed via the Recording Industry Assn. of America, follows the filing of a copyright-infringement suit earlier this week by the six major studios. The complaint was filed Monday by Twentieth Century Fox Film, Disney Enterprises, Paramount Pictures, Universal City Studios Prods., Columbia Pictures Industries and Warner Bros. Entertainment.
Attorney Ira Rothken, representing Megaupload, said that “the RIAA, the MPAA and DOJ are like three blind mice, following each other in pursuit of meritless copyright claims.
“The case against Megaupload is in reality an assault on cloud storage generally, as the company used copyright-neutral technology,” he said. “We strongly believe that like YouTube, once the court can hear all the facts and analyze the law, Megaupload and the other defendants will prevail.”
His reference to YouTube relates to the $1 billion lawsuit filed against the site by Viacom, claiming copyright infringement for videos uploaded to its site by users. A federal court judge sided with YouTube in its contention that it did not bear liability and removed the content from its site when it received takedown notices. The two sides settled the litigation earlier this year.
In its filing against Megaupload, the record companies contend that the site was “in no respect designed to be a data storage provider. Users without premium subscriptions were restricted not only in their downloading capabilities, but also in their ability to store files on the site.”
Megaupload was shut down in January 2012, as authorities in New Zealand raided Dotcom’s mansion near Auckland. But the operation stoked controversy as excessive, and a New Zealand judge found that the search warrants used in the raid were invalid. An appellate court ruled in February that the raid was legal, but found fault with the FBI’s removal of electronic information that was seized in the raid.
An extradition hearing is scheduled for July 7 in New Zealand.
“Given that the RIAA waited over two years since Megaupload was taken down to file this lawsuit, on the eve of an extradition hearing, we believe they are assisting the U.S. Department of Jusitce in a war of attrition by trying to win the cases on economics, rather than on the merits,” Rothken said.