10 Jun 2019

Megaupload not intended for illegal use, Dotcom's lawyers say

4:56 pm on 10 June 2019

Kim Dotcom's Megaupload website was never intended to encourage copyright breaches, lawyers for Mr Dotcom and his fellow accused have told the Supreme Court.

Kim Dotcom at his extradition appeal at the High Court in Auckland in 2016.

Kim Dotcom at his extradition appeal at the High Court in Auckland in 2016. Photo: AFP

More than seven years after they were arrested, the internet entrepreneur and three other Megaupload executives - Mathias Ortmann, Bram van der Kolk and Finn Batato - are making their final appeal against extradition to the United State in the New Zealand Supreme Court this week.

The United States Department of Justice has been trying to extradite the men since 2012, to face criminal charges related to their defunct file-sharing website Megaupload.

North Shore District Court found in December 2015 that the men were eligible for extradition but they have fought the decision every step of the way, unsuccessfully appealing to the High Court and then the Court of Appeal.

Mr Dotcom, Mr Ortmann, Mr van der Kolk and Mr Batato were arrested on 20 January, 2012, during a dramatic armed raid on the rural Auckland mansion Mr Dotcom was renting at the time.

The FBI, which co-planned the raid with its New Zealand counterparts, claimed the site wilfully breached copyright on a mass scale by hosting illegally-created movie, music and software files.

The agency said the site aided and abetted users who uploaded such files by paying them rewards.

But the men have maintained in court hearings for the past seven-and-a-half years that Megaupload was designed only as a digital storage locker for people to keep and share large files.

The hearing took a long detour before lunch into analogies about pirated novels and photocopiers, as the Supreme Court justices attempted to clarify the appellants' arguments about whether Megaupload was aware of or complicit in copyright breaches committed by its users.

"If Justice [Ellen] France has written a novel ... and I take it and print it up and sit on a street corner and sell copies for $10, haven't I breached copyright?" Justice Susan Glazebrook asked.

Grant Illingworth, the lead lawyer for Mr Ortmann and Mr van der Kolk, disagreed, saying the analogy did not apply as it was never Megaupload itself making the illegal copies, but the site's users.

"They're providing the photocopier, someone else comes along and uses the photocopier. They're [Megaupload] not putting up a sign saying, 'Please come and use our photocopier for illegal purposes.'"

Justice Joe Williams, alluding to the fact the Megaupload paid financial rewards to users who uploaded popular files, added to the Justice Glazebrook's analogy.

"What if I get a wheelbarrow and I convey the copies [of the novel] to the street corner, knowing that she'll be selling them, and she and I have some kind of agreement to share the profits?"

"The problem is the wheelbarrow is not a true analogy," Mr Illingworth said.

It was true that users were paid, but that was not to reward illegal behaviour, he said.

"They're trying to generate as much traffic as they can because that's good business. They're not saying you get rewards for breaching copyright, you get rewards for increasing traffic."

Earlier, Mr Illingworth, told the Supreme Court he would be arguing for the finding to be overturned on several grounds.

Firstly, the actions the men were accused of did not amount to criminal offences in New Zealand and were therefore not extradition offences, he said.

Even if they were, the Crown - on behalf of the US - had not provided sufficient evidence that the offences had occurred, Mr Illingworth said.

Regardless, the district court had made serious errors in its decision and the High Court and Court of Appeal should never have upheld its ultimate finding, he said.

"The district court judge misapplied the law at every stage of the judicial analysis.

"That constituted a serious miscarriage of justice. No higher court could have justified a finding of that kind, no matter how much they agreed with the outcome," he said.

The decision was the "antithesis" of justice.

If the Supreme Court upholds the extradition finding after this week's hearing, it will be referred to Justice Minister Andrew Little to make the ultimate decision.

Canterbury University law professor Neil Boister said if neither decision went in Mr Dotcom's favour, a judicial review of the minister's decision offered one last narrow window of escape.

"The difference with the judicial review is that you can introduce all sorts of material that's not evidence," he said.

That could include arguments about whether extraditing the men could amount to a breach of their human rights.

"You could introduce Amnesty International reports about the conditions in the US jails and so on."

This week's appeal is being heard by a full panel of the five Supreme Court justices.