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Feds: No need to keep data on Megaupload servers

By Matthew Barakat

Associated Press

Published: Thursday, April 5 2012 2:07 p.m. MDT

McLEAN, Va. — Federal prosecutors have told a judge there's no need to preserve millions of digital files associated with the file-sharing site Megaupload, whose owners are charged with running a huge online piracy scheme.

A hearing is scheduled next week in U.S. District Court in Alexandria on what should be done with the 1,100 servers that store Megaupload's files. The servers hold 25 million gigabytes of data, the equivalent of more than 325 years of high-definition video.

Megaupload's founder, Kim Dotcom, is in New Zealand fighting extradition to the U.S. He and six others were charged were charged in January with facilitating massive copyright infringement by knowingly allowing users to use Megaupload to share TV shows and movies in violation of copyright laws. The government shut the site down when the arrests were made, and users of the site have been unable to access files, even if the content was legitimate.

The company that owns the servers, Carpathia Hosting in Dulles, Va., says it has been spending $9,000 a day to maintain them. Megaupload had been paying to rent those servers, but the government seized its assets and it has apparently not been paying its bills.

Carpathia said it is leery of erasing files that might be needed as evidence in either the criminal case or related civil cases, so it has asked a judge for either explicit permission to erase the data and put its servers back into use, or that someone pay to keep the data preserved.

In a motion filed earlier this week, the government says it already copied the necessary evidence and can provide the data to the defendants as required under federal trial rules. It contends most of the files are illegal copies of copyrighted TV shows and movies. Those with legitimate files, the government says, should have saved backup copies elsewhere.

"Megaupload.com's own terms of service ... cautioned uploaders not to keep the sole copy of any document on Megaupload.com, and stated that Megaupload.com's duty to preserve data ends ... at its sole discretion and without any required notice," prosecutors wrote in their brief.

One individual who says he was unfairly harmed by the government's shutdown of Megaupload, Ohio resident Kyle Goodwin, has also filed papers with the court asking that procedures be established so innocent users like him can get their files back. Goodwin says his own hard drive crashed and he was counting on the copies he stored with Megaupload to restore the data he lost. But the feds shuttered Megaupload before he could restore copies. His business, which puts together clips of high school sports in Ohio, has suffered as a result.

"It is one thing to take legal action against an alleged copyright infringer. It is quite another to do so at the expense of entirely innocent third parties, with no attempt to prevent or even mitigate the collateral damage," write Goodwin's lawyers, including attorneys for the San Francisco-based Electronic Foundation, which has criticized the government for being overly aggressive in its pursuit of a case against dotcom and Megaupload.

Lawyers for Megaupload, meanwhile, want to see the data preserved so they can do their own analysis of what evidence is needed to build their defense. But the defense lawyers may not have standing to make any argument before the court. They have not yet received any assurance they can be paid for their work through the duration of the trial, and they are seeking to make a limited appearance to argue for the preservation of the data without committing to serving for the whole trial. Prosecutors argue that such a limited appearance is not allowed.

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