You’re absolutely correct regarding “malicious prosecution.” My statements apply only in the case where defendants (or a defendant corporation) is found guilty. If it does turn out the DOJ has email or other clear communication evidence that MegaUpload or its officers promoted illegal content storage for corporate gain, it’ll be tough to prove malicious prosecution. All ethical or personal arguments aside, current law removes their DMCA “compliance” protection if that intent is proven. And unfortunately the DOJ rarely indicts if they don’t think they have a slam dunk. Then again this is a new topic for them so who knows. Megaupload may also have a shot if the complicated international arrest and seizure procedures were flubbed.

As far as “protecting innocent third-parties,” I believe the EFF is claiming this but it might be a fight since there’s probably little precedent in the context of data storage, especially when the third-parties had already waived recourse in terms of service (regardless of to whom they waived it). Historically the DOJ’s responsibility to protect third-parties has even been tossed out in cases where people lost land and physical property such as houses and buildings. The EFF rarely wins such fights, but as in far left or right politics, they do a great job of shedding light on issues and evolving the system in a more reasonable direction for all.