Why MegaUpload Doesn’t Have a DMCA Shelter

This article was written by a Friend of MonkeyBiz, who asked if I could post it. I thought others may find it interesting, so here it is.

As he is involved in the legal field, he asked that I add this disclaimer:

This article is for educational purposes only, and contains only general information about the law and does not, under any circumstances, constitute legal advice.

In an interview with TorrentFreak, Kim Dotcom seemed surprised that his business was not protected by the DMCA, “…Megaupload had spent millions of dollars seeking out the very best legal advice and the conclusions drawn were clear – providing the site did its part in tackling infringement it would be protected under the DMCA and could not be held liable for the actions of its users.”

The most interesting aspects of the Department of Justice allegations are those that remove DMCA (OCILLA) protections. These “safe harbor provisions” of 17 USC §512 were designed to prevent secondary liability from attaching to sites that provide specific types of internet service. The relevant section to MegaUplaod is (c) Information Residing on Systems or Networks At Direction of Users. See:

The DOJ argues the statute’s language doesn’t apply to criminal cases, instead it offers civil liability shelter. The protection is for copyright infringement which can be both a civil and criminal suit. However, it is limited to monetary, equitable or injunctive claims. These are not criminal law subjects so the statute will likely not apply. Criminal copyright infringement requires proof of “willful infringement.” DMCA shelter is only extended to passive infringers. The DOJ will have to prove that MegaUpload was willfully violating copyright in either outcome.

DOJ allegation #2 is that the Mega Conspiracy uploaded pirated content on its own, separating it from “3rd party content” that (c) protects.

– Allegation #4 advertising methods targeted people seeking pirated material. The Supreme Court determined Grokster, a p2p program not eligible for DMCA shelter, could be secondarily liable for 3rd party violations due to advertisements that show intent to draw pirates from Napster’s user base.

“We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” MGM Studios, Inc. v. Grokster, Ltd. 545 U.S. 913 (2005)

– Allegation #21 is that abuse reports do not function according to the (C) take down provision. MegaUpload used de-duplication to prevent storage of the same files multiple times. Their “abuse tool” removed the link, not the offending file. By not complying with the take down provision, MegaUpload loses DMCA protection.

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