Content stored on Megaupload servers will, for the time being, not be destroyed, a district judge decided today.
The two sides - the ill-fated Megaupload cloud storage service and the U.S. government - were also asked to confer with either U.S. Magistrate Judge John F. Anderson or a special magistrate within two weeks to see if the parties can come to an agreement, according to a Justice Department spokesman.
"Megaupload is pleased with the Judge's ruling in US in favor of server data preservation and ordering conference with experienced Magistrate," Megaupload lawyer Ira Rothken tweeted today.
The DOJ took down Megaupload.com in January for massive copyright infringement, and arrested several of its executives, who face up to 50 years in prison. Though founder Kim Dotcom resided in and operated out of a lavish New Zealand mansion, some of Megaupload's servers were located in Virginia, allowing U.S. intervention.
In February, the DOJ charged Dotcom and other Megaupload execs with additional counts of copyright infringement and wire fraud.
Following the Megaupload takedown, though, users expressed concern about the legitimate files they had stored on the service. What would happen to them? Virginia-based Carpathia Hosting and D.C.-based Cogent Communications leased servers to Megaupload. According to court filings, the Justice Department executed search warrants on the companies' servers on the same day that it shut down Megaupload.com. Officials copied select data from these servers but did not remove them from the premise.
"The government made clear that it is not seeking the destruction of the content of the Mega servers," the DOJ spokesman said today. "In fact, it was the United States that notified the court and interested parties that the hosting company was contemplating wiping the content of the servers. Throughout the prosecution of this case, the government has sought to protect the legitimate interests of the victims of Megaupload, and the innocent users of the Megaupload storage service."
In pursuing the case, he continued, "the government has to balance the interests of the victims who would be entitled to restitution from the seized assets, the access of innocent users, and the fair prosecution of this matter in a manner that does not waste tax dollars on unwarranted litigation and storage expenses."
Carpathia Seeks Guidance
Carpathia teamed up with the Electronic Frontier Foundation (EFF) to launch megaretrieval.com, a website intended to help lawful U.S. users recover files that were uploaded to Megaupload, though it was unclear how that might happen. In late March, Carpathia filed a motion in federal court "seeking the court's guidance on how to proceed in resolving this matter," according to Brian Winter, Carpathia's chief marketing officer.
In response, the DOJ said earlier this month that Carpathia's filing was premature. "There is no authority that would permit this Court to rule prospectively on issues related to as-yet-unfiled civil lawsuits involving the Motion Picture Association of America ('MPAA') or the Electronic Frontier Foundation ('EFF')," the DOJ argued.
Carpathia was paying $9,000 a day to rent a facility that housed the servers containing Megaupload files, the DOJ filing said. The lease on that facility, however, expired earlier this month, and Carpathia transferred those servers to a building it owns.
As a result, it "would be incorrect to suggest, that Carpathia is losing revenue by housing the Carpathia Servers at otherwise vacant space at Carpathia-owned premises, until such time as a Carpathia customer wishes to lease that space," the DOJ said.
Carpathia said it cost $65,000 to transfer its servers, but the DOJ said Carpathia did "not indicate whether that cost was an actual outlay or another allocated cost."
The judge today was apparently not sympathetic to Carpathia's concerns, given that the company earned at least $35 million from working with Megaupload, CNET reported.
Cogent Communications has not commented.
Also today, the court postponed a request from Megaupload lawyers for limited appearances before the Virginia court.
"The court indicated that it needed additional information from the government and Mega," the DOJ spokesman said. "It did allow counsel for Mega to speak on a limited basis for the purpose of today's hearing."
For more from Chloe, follow her on Twitter @ChloeAlbanesius.
