Megaupload Protests Movie and Record Studios’ Assets Freezing Game

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Megaupload is protesting movie and music industry attempts to keep Kim Dotcom's assets under lock, which would limit Megaupload's capacity to defend itself. According to Megaupload's counsel, the MPAA and RIAA members are trying to win their case on procedure rather than merits.

megauploadFollowing in the footsteps of the U.S. Government the major record labels and Hollywood’s top movie studios filed lawsuits against Megaupload, Kim Dotcom, and his colleagues earlier this year.

In a response last month, Megaupload’s legal team asked the court to freeze both cases in order to protect their clients’ Fifth Amendment rights not to implicate themselves in advance of the U.S. Government’s criminal case against them.

The movie and music companies were not opposed to a limited cease-fire, although they specified a few conditions under which that could take place. Among other things, they want to retain the option of freezing Megaupload’s assets at home and abroad.

This is relevant, since New Zealand’s High Court previously said it would not extend the foreign restraining order against his assets, and if the Government loses the appeal Megaupload’s fortune will be released.

Fearing that Megaupload and its accused employees would quickly move the millions in assets, the movie studios started a civil assets freezing request in New Zealand, and this week the record labels followed suit.

In a new filing submitted to the U.S. federal court Megaupload is hoping to put a stop to these efforts. TorrentFreak spoke to Megaupload lawyer Ira Rothken who accuses the movie studios and record labels of playing a procedural game.

“The recording and film studios are engaging in a procedural game to try to freeze Kim Dotcom’s assets so they and the DOJ can win on procedure and not on the merits,” Rothken tells TorrentFreak.

Megaupload’s legal team is asking the U.S. federal court not give the entertainment industry companies a “carte blanche” to come after the assets, wherever and whenever they choose. In their filing Megaupload brings up a variety of arguments, including a likely violation of Fifth Amendment and due process rights of the defendants.

According to Rothken it eventually all boils down to money. As long as Megaupload is deprived of access to its assets, it will have less fighting power in court, which puts its adversaries at an advantage

“These copyright cases cost tens of millions of dollars to defend. The studios and the DOJ have a healthy concern that if Kim Dotcom can have the funds and evidence to mount a fair defense, he and the others will prevail,” Rothken says.

Megaupload is prepared to argue its case in court as long as it’s a fair fight. Rothken brings up the example of YouTube, which recently scored a victory in the U.S. in its long running copyright case against Viacom. Megaupload wants a similar trial without dirty games, in which it can show that it operated in accordance with the law.

“Megaupload and Kim Dotcom are entitled to assert the same copyright safe harbors that YouTube recently used to defeat similar claims, and that ought not be meddled with in a single hearing based on a flimsy record, with evidence locked away, and prior to a civil trial on the merits,” Rothken tells TF.

“Indeed a number of studios applauded Kim Dotcom and Megaupload in writing for their track record in handling takedowns,” he adds.

It’s now up to the court to decide what steps to take next, and whether the movie studios and record labels can continue to go after Megaupload’s assets while the criminal case is ongoing.


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