10 Oct 2012

US judge allows Megaupload case to go ahead

3:35 pm on 10 October 2012

The lawyer for file-sharing website Megaupload says he will seek a new hearing after losing an attempt to block an internet piracy case in the US against his client.

Megaupload and website co-founder Kim Dotcom are fighting allegations in the United States that they encouraged global copyright theft, while court cases are also proceeding in New Zealand.

A US judge ruled on Tuesday that the American government's criminal case against Megaupload will go forward for now.

In May this year, Megaupload lawyers asked that the indictment against the company be thrown out because they said it had no address in the US and could not be served with court papers.

In his order, US District Judge Liam O'Grady agreed with prosecutors that there was no procedural error in their inability to serve papers in the United States to Megaupload, which is based in Hong Kong.

He wrote that a foreign company violating laws within the United States cannot "evade the jurisdiction of United States courts by purposefully failing to establish an address here."

But the judge left open the possibility that he could later dismiss the case on other grounds, like an argument that delays have denied the company its right to "due process".

Megaupload lawyer Ira Rothken told the Reuters news agency that he plans to file such a request soon.

Megaupload was one of the world's most popular websites, allowing users to store and share data, until a US-led operation shut down the company in January, seized its assets and raided Mr Dotcom's luxury estate at Coatesville near Auckland.

US prosecutors accuse Mr Dotcom and seven others of organising a criminal enterprise that made more than $US175 million. Mr Dotcom, a German national with New Zealand residency, denies the charges.

Court cases continue in New Zealand over the US request to extradite Mr Dotcom and a challenge asking the US Government to disclose the evidence it has against Mr Dotcom.

Mr Rothken said the company respectfully disagrees with the result of the judge's order but appreciates "the court implicitly allowing" a new motion.

"We will be filing such a motion shortly," he said.

The case is proceeding in Alexandria, Virginia, and federal prosecutors there had no comment.