Studios and Music Labels File Lawsuits Against Megaupload

Major film studios — including 20th Century Fox, Disney, Paramount, Universal, Columbia Pictures and Warner Bros. — have filed a civil lawsuit against the now defunct entertainment website Megaupload and its founder, Kim Dotcom. The studios claim that visitors to the Hong Kong-based site illegally downloaded thousands of copyrighted works. Damages could reach a maximum of $150,000 for each infringement. In addition, four music labels filed a similar lawsuit yesterday.

Megaupload is accused of encouraging users to infringe upon copyrighted material and profiting from the illegal distribution. In the Hollywood studio suit, about 30 feature films released by the six major Hollywood studies were listed as having been distributed illegally. These films include “Avatar,” “Cars 2,” “Transformers,” “Ghostbusters” and “Forrest Gump.”

Megaupload reportedly earned about $150 million from subscriptions that gave visitors to the site access to unrestricted downloads.

“An ‘Uploader Rewards’ program, for example, is alleged to have paid Megaupload users to upload popular unauthorized and unlicensed content to Megaupload’s servers,” explains PCWorld. Dotcom responded that files above 100MB did not earn rewards.

“Megaupload wasn’t a cloud storage service at all; it was an unlawful hub for mass distribution,” said Steven Fabrizio, general counsel for the MPAA.

Three days after the studios filed their complaint, music labels and RIAA members filed a similar suit. Warner Music Group, UMG Recordings, Sony Music Entertainment and Capitol Records claim that “Megaupload generated more than $175 million in illicit profits from copyright infringement while causing ‘more than half a billion dollars in harm’ to copyright owners,” reports The New York Times.

The complaints follow a 2012 indictment by a grand jury in Virginia that charged Dotcom and colleagues with racketeering, two counts of criminal copyright infringement, conspiring to commit copyright infringement and money laundering, according to the U.S. Department of Justice.

“Dotcom, who was born Kim Schmitz, has been fighting extradition from New Zealand to face criminal charges of copyright infringement and racketeering in the United States,” explains NYT in a related article. “Ira Rothken, a lawyer for Megaupload and the other defendants, said he believed the [Hollywood studio] suit was without merit.”