File-sharing Services Re-evaluate Sharing After US Justice Department Shuts Down Megaupload

On January 19th, 2012, the US Justice Department, acting on allegations of copyright infringement, shut down Megaupload.com (Megaupload), one of the world’s largest “cyber-locker” services. Later, prosecutors added wire fraud and additional criminal copyright infringement counts to earlier criminal charges. Cyber-locker services allow users to upload their own computer files to the cyber-locker, after which any Megaupload user is then able to download the file. US authorities have alleged that Megaupload is responsible for the downloading of pirated music, movies, and software on a massive scale. Its founder, Kim Dotcom, and several other employees, were arrested on the same day the site was shut down and they currently await trial in New Zealand. In the wake of the Megaupload arrests, other cyber-locker services are reported to have taken steps to reduce the likelihood they will suffer a similar fate. For example, Fileshare.com and Fileserve.com have restricted user downloading from their sites to content uploaded by the same user. Readers may recall that several years ago the filesharer Grokster Inc was found to have induced copyright infringement (see the 2005 US Supreme Court decision in MGM Studios, Inc v Grokster, Ltd 545 US 913). However, the Grokster case was heard under the civil law copyright infringement regime and not the criminal law regime under which Megaupload has been charged. For more news on the topic, visit: http://tinyurl.com/7he7qky and http://tinyurl.com/748gdhr Summary by: Thomas Wong