Digital Enterprise: Copyright Infringement Analysis of Megaupload

This report examines the Megaupload case, focusing on copyright infringement allegations and legal implications under US and New Zealand law. The analysis includes the charges against Megaupload and its principals, specifically concerning the unauthorized distribution of copyrighted material and financial gains from these actions. The report also investigates the question of data ownership for users who uploaded content to the platform and discusses the legal ramifications of copyright infringement, including the implications for users and cloud storage services. Furthermore, the report highlights the negative impact of the Megaupload case on cloud storage services and the measures taken by other operators to avoid similar legal issues. The conclusion confirms that Megaupload engaged in illegal activities, breaching copyright norms and leading to significant legal consequences for the company and its users.

Running head: DIGITAL ENTERPRISE 1
Digital Enterprise
Student’s Name
University’s Name

DIGITAL ENTERPRISE 2
Table of Contents
Megaupload breach of U.S. Copyright Laws (Copyright Infringement)?.......................................2
Customers of sites like Megaupload have uploaded personal data to the sites similar to
Megaupload service. Who owns that data and what are the implications of this?..........................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................5

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Megaupload breach of U.S. Copyright Laws (Copyright Infringement)?
On January 5, 2012 the US district Court issued an indictment against a company
Megaupload Limited and its principals Kim Dotcom, Finn Batato and others which confirms the
alleged involvement of the company in the issues of copyright infringement (Reilly, 2017). They
were arrested on the charges of gaining profits through the infringement of copyright guidelines
through the operation of megavideo.com and megaupload.com domain names. The company
used to operate as cyberlocker where the users could upload the content to the servers of
Megaupload and after getting the URL from the company, they could download the file
wherever required. This service was charge free at the basic level and the premium membership
option was open for the customers at an affordable rate which provided them with better band
width. It also gave the uploaders rewards who uploaded the files that are extensively popular
(Fowler, Barrett, & Schechner, 2012).
The allegations were made on the defendants that they used to upload the materials and
files from other sources without taking their permission which is an issue of copyright
infringement. The company also allegedly promoted the users to copy the files from
unauthorized sources. The company benefitted from the infringement of the copyright financially
and also provoked and included others to commit the crime of copyright infringement.
Yes, the company breached the laws of copyright infringement in US. The company was
charged as criminals under copyright infringement according to the section 17 U.S.C. 506 and 18
U.S.C. 2319 of US constitutional Acts where the files and videos were uploaded by the
defendants without taking permission of the patent holders. They were also charged for money
laundering (18 U.S.C. 1956) for making money through the acts of copyright infringement. The
company was also legally charged for not designating a copyrighting agent under the Digital

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Millennium Copyright Act (17 U.S.C. 512) where they were sent an infringement notice but they
did not pay any attention and just deleted the link of the file on which the complaint was lodged
(DMLP, 2012)
Customers of sites like Megaupload have uploaded personal data to the sites similar to
Megaupload service. Who owns that data and what are the implications of this?
The data uploaded on Megaupload was owned by the company Megaplaud.com only.
Similarly, the data uploaded on websites with the same functioning is owned by the software
companies only. Also, the data which the customers upload on such websites are also owned by
the software companies developing them (Copyright Council of New Zealand, 2017).
The copyright law of New Zealand is governed by the Copyright Act 1994. It states that
any intellectual or innovative work of any user is owned by the user only. The rights for
economic exploitation of the work are solely in the hands of the user and if any person has to use
the work, he/she must take the permission of the developer or else the developer can file the law
pursuit against the user (Wells, 2017).
The privacy policies of most of the companies do not ensure absolute confidentiality of
the data. They inform that how their data can be shared, exchanged or sold but do not confirm
that their data will not be used anywhere. The companies that ask for the sharing of data online
do not guarantee its protection. Even the data which is not very useful for us can be extremely
beneficial and enough for the cyber criminals for example the email address, mother’s name etc.
There are several reported cases of the data breaches online.
The cyber criminals patch the complete identity of a person from the bits of data they
steal from the websites of the company. The pictures of the users can be used in a wrong profile

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and the information of the profile can lead to the penetration to the financial records of the users.
These records can be used for making illegal purchases.
To stay protected from such breaches, the users must read all the terms of usage on the
online sites of the merchants before making any financial transactions. The management of the
cookies of the browser can help in minimizing the risk (CSID, 2015).
Despite all the above discussion, the fact is that copyright infringement is an illegal
activity in both US and New Zealand and it is the only reason behind Dotcom’s extradition in
New Zealand.
Implication on Users: Now, the question raised that who owns the uploaded data. After
Megaupload’s shut down, the growing concern were related to the uploaded data on site. On the
basis of the policies of Megaupload, users have to keep the copies of their files & they would
have no ownership on data that is uploaded on website and this data can be terminated by the
website with the prior notice. Users’ access to their files can be possible if Megaupload wins the
case but still there is no guarantee for file access.
Implication for Apple cloud: Megaupload created a negative impact for cloud storage
services. Other operators have taken the precautionary actions by changing their policies to avoid
the legal implications. They disabled some certain file sharing functionalities to avoid such legal
turmoil. iCloud has created itself as brand image for its superior services so its business has not
been affected. So we can conclude that collateral damage is related to the trust (Leonhard, 2012).

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Conclusion
This assignment evaluates the New Zealand copyright law and identifies that
Megaupload broke such laws or not. On the basis of the available facts, it can be concluded that
Megaupload caught in illegal activity & breached the copyright norms.
References
CSID. (2015). The Implications of Sharing Personal Data. Retrieved from www.csid.com:
https://www.csid.com/2015/01/implications-sharing-personal-data/
Fowler, G. A., Barrett, D., & Schechner, S. (2012). U.S. Shuts Offshore File-Share 'Locker'.
Retrieved from www.wsj.com:
https://www.wsj.com/articles/SB10001424052970204616504577171060611948408
Reilly, C. (2017). Kim Dotcom eligible for extradition to US in Megaupload case. Retrieved
from www.cnet.com: https://www.cnet.com/news/kim-dotcom-eligible-for-extradition-
to-usa-megaupload-new-zealand-high-court/
Staff, D. (2012). United States v. Megaupload Limited. Retrieved from http://www.dmlp.org:
http://www.dmlp.org/threats/united-states-v-megaupload-limited
Wells, J. &. (2017). Copyright infringement - an overview. Retrieved from
http://www.jaws.co.nz: http://www.jaws.co.nz/information/category/copyright/copyright-
infringement-an-overview
Zealand, C. C. (2017). Welcome Copyright Owners. Retrieved from
http://www.copyright.org.nz: http://www.copyright.org.nz/owners.php