1. Presented by:
Go
Tonya
Garima
Dmitry The Megaupload Case
Copyright and Data Ownership

2. Megaupload’s Business Background
>>APMG 8119: DIGITAL ENTERPRISE

3. Webpage
>>APMG 8119: DIGITAL ENTERPRISE

4. Business Background
Megaupload Limited is the Hong Kong-based company
 Established 17th of July 2005; 150 employees
 Business type: File hosting service (including Image, Video, and music hosting )
 Visitors per day: 50,000,000 (13th most visited website)
 Registered member: 180,000,000
 Incomes: Premium subscriptions ($150M)
and online advertising ($ 25M)
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

5. Main income - Service fees
Subscription: Paypal, Inc
 $9.99 Monthly
 $59.99 Yearly
 $199.99 Lifetime
Moneybookers
 €9.99 Monthly
 € 59.99 Yearly
 € 199.99 Lifetime
Advertising: AdBirte - $840,000
PartyGaming - $3 Million
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

6. Main Expenses – 4 sources
1. Corporate entities, co-conspirators and employees
2. Developing and promoting websites
3. Uploader Rewards
4. Infrastructure supporting to its businesses
65 million for Internet Hosting Services
Carpathia Hosting-Carpathia.com: 25 petabytes of data storage
Cogent Communications-Cogentco.com: computers, internet
bandwidth, hosting, and support services
Leaseweb-Leaseweb.com: computers, internet hosting, and support
services
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

7. Free file sharing – Unique visitors
>>APMG 8119: DIGITAL ENTERPRISE Source: (Sidenius, Jensen, Jensen, Fiktus, & Tommerup, 2012)

8. The basic flow how Megaupload works
Megaupload harm to Copyright holders?
 Reproduce and distribute copies of popular copyright
content over the internet without authorisation
 Account for up to 40% of all file downloads on the internet
 Cause more than 500 million USD in lost revenue
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

9. The basic flow how Megaupload works
What Governments Acted
 2009 blocked in Hong Kong
 2010 blocked in Saudi Arabia
 2010 intermittently blocked in the United Arab Emirates
 2011 blocked in Malaysia
 2011 blocked in India
 2012 shut down by U.S Government
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

10. The basic flow - Megaupload works
1 Upload copyrighted
Client A
song/movie
3
2
Song link Megaupload.com Server
Others
5 Abuse Tool
Upload copy of
Client B Copyright holders
4 copyrighted song 6
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

11. The basic flow - Megaupload works (cont.)
Megaupload:
Megaupload is the first and only site on the Internet which pays consumers for
hosting their files (Uploader Rewards):
$1USD cash per 1,000 downloads of consumers’ uploaded files
 Basic service is available for free and allows users to upload files of up to
1,024MB (Expiration <21 days)
 Free registered users are offered 50 GB of total file storage
(Expiration < 90 days)
 Free users cannot download files larger than 1 GB
 Premium users are offered 1 TB total file storage (No Expiration)
Megavideo: is a free online video sharing service for a premium subscription
>>APMG 8119: DIGITAL ENTERPRISE Source: CrunchBase (2012)

12. The Company Web Services
Main Websites
No. Website Description of Service
1 Megaupload.com A one-click hosting service
2 Megavideo.com Upload associated and ad-supported video
3 Megapix.com Uploading of images
4 Megalive.com A live video-streaming service
5 Megabox.com Uploading of whole music libraries and playlists
Put the “dinosaur record labels” out of business
6 Megaporn.com File-sharing of pornographic movies and
images
>>APMG 8119: DIGITAL ENTERPRISE Source: Sidenius, Jensen, Jensen, Fiktus, & Tommerup (2012)

13. Mega Networks - Websites
No. Mega Conspiracy No. Mega Conspiracy
1 Megaupload.com 11 Megahelp.com
2 Megavideo.com 12 Megagogo.com
3 Megaclick.com 13 Megamovie.com
4 Megaworld.com 14 Megaporn.com
5 Megalive.com 15 Megabackup.com
6 Megapix.com 16 Megapay.com
7 Megacar.com 17 Megabox.com
8 Megafund.com 18 Megabest.com
9 Megakey.com
10 Megaking.com
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

14. Mega Networks - Companies
No Mega’s supporters No Mega’s supporters No Mega’s supporters
1 Megaupload Limited 11 Kimvestor Limited 21 Mega Services
Europe
2 Vestor Limited 12 Trendex Limited 22 Megateam Limited
3 Megamedia Limited 13 Monkey Limited 23 Megastuff Limited
4 Megavideo Limited 14 Kimpire Limited 24 Megacard Inc
5 Megarotic Limited 15 A Limited 25 Megasite Inc.
6 Megapix Limited 16 N1 Limited 26 Seventures Limited
7 Kingdom Int Venture 17 RNK Media Company 27 SECtravel
8 Netplus Int Limited LLC 18 Megapay Limited 28 Bramos B.V
9 Basemax Int Limited 19 Megamusic Limited
10 Mindpoint Int Limited 20 Finn Batato
Kommunikation
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

15. Kim Dotcom
Kim Dotcom (38 year olds) is the CEO of MUL
 A dual citizen of Finland and Germany
 A resident of both Hong Kong and New Zealand (PR 29 November 2010)
 Director and sole shareholder: Vestor & Kingdom International Venture
64 bank accounts worldwide
 Sole shareholder of Megavideo.com, Megaporn.com, and Megapay.com
 Hold 68% of total shares of Megaupload.com, Megaclick.com, Megapix.com
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

16. Other Executives
No Name Country Position on Megaupload Limited Benefits from Mega
(Infringing copies of copyright works) Conspiracy
1 Finn Batato Germany Chief Marketing and Sale Officer > $400,000
2 Julius Bencko Slovakia Graphic Directors > $1,000,000
3 Sven Echternach Germany Head of Business Development > $500,000
4 Mathias Ortmann Germany Chief Technical Officer - Founder > $9,000,000
5 Andrus Nomm Estonia Chief Development Software officer > $100,000
6 Bram Van Der Kolk Dutch Programmer-in-charge > $200,000
Source: The United States district court for the eastern district of Virginia (2012)
>>APMG 8119: DIGITAL ENTERPRISE

17. Copyright Act 1994
Copyright Defined:
“Copyright is an intellectual property right that exists in various kinds of
original works listed in the Copyright Act. Copyright is not concerned
with original and new ideas but with expressions of them in various forms
or works”pg.505 - Gerbic, P., & Lawrence, M. (2006).

18. Copyright Act 1994
What does the Copyright Act do/cover - Section 2
Sound
All other
Recordings &
Copyrights
Film

19. Copyright Act 1994
Who owns the data?
• Section 16
Infringements
• Section 37

20. Global Law
How do you copyright something?
Global – how does that work?
• WIPO

21. Kim Schmitz
Kim.Com also know as:
• Kim Schmitz
• Kimble
• Kim Tim Jim Vestor
Colourful history:
• Hacker
• Dealing in stolen property
• Computer fraud
• Data espionage
• Insider Trading
• Faking your own death
• Breaching trading laws

22. Kim.Com
Charges:
• Conspiracy to commit racketeering;
• Conspiracy to commit copyright infringement;
• Conspiracy to commit money laundering;
• Criminal copyright infringement by distributing copyrighted work
being prepared for commercial distribution on a computer network
and aiding and abetting criminal copyright infringement;
• Criminal copyright infringement by electronic means and aiding and
abetting criminal copyright infringement.

23. Angry Customers
Carlos Sanchez Alveida – Spanish Anger
• Barcelona Spain belonged
• Complains his legal contents stored
now was inaccessible for
companies customers
• Users gather together to file legal claim
• Spain has already proved to be one
tough cookie for U.S. Law after a similar
file sharing website “Roja Directa”
• As Roja Directa survives but in a different
domain expectedly mega upload will
survive

24. Suzanne Barbieri
• London based musician – Beloved Aunt
• Using Mega upload since 2009
• Sends songs to producers & record label
• YouSendIt could not be used by her
• 2GB free account mega upload offered
• Pre-release tracks in hand of US Govt.
• Digital version of her work - freebie
downloads
“Piracy hurts artists”
But so does this heavy – handed approach of
Penalizing legitimate users for sharing their work

25. Mark Ellul
• Reader by profession
• Used mega upload account for online storage and backups
• Also send personal home videos about her daughters to their
grandparents from Spain to Australia (HD Videos)
• It was a pirated use but personal
• No trust left for any file sharing website any more even drop box
whether any time they will also be shut down by the FBI

26. DJ’s legal creations are also behind the locks now Mark Ellul received
tweets regarding this, who is another victim of this file sharing website
“Mega Upload”

27. Geoff Luk - Vancouver resident
• Used 4GB space of mega upload for storage of files
• Worked voluntary to take photos & Videos at 2010 winter Olympic
games
• Loss – 2 ISO DVD images that were created from PPT slide shows and
photos and video taken while he was volunteering with 2010
Vancouver winter Olympic games
• Was not possible to physically share both DVD copies of the photos
videos, and ISO files with team of 75 Downtown Vancouver, and
another 25 in Whistler/Blackcomb
• Problem – had everything backed up locally, although uploading
files again to another service will be inconvenient

28. Movant Kyle Goodwin
• Deprived of access to his own property wanted the
permission to grab his own file which was a part of his
growing business in Ohio
• Filed Motion for his property pursuant to 18 U.S>C. §
1963 AND/OR FEDERAL RULE, CRIMINAL PROCEDURE
41(g ) in May
• His living is taping high-school sports events

29. The dramatic unexpected shutdown of mega upload
• 180 million registered users
• More than 50 million daily visitors
Had a chilling effect on the growing online storage industry which some
people place in the “cloud computing” business
Sufferers even many who were the sole owners and had proper copyright of
their material
Reason
“Piracy”

30. Copy-rights
vs.
File-sharing
“Due to deep changes in technology […] we are entering a new
age where people participate in economy like never before”
“… new forms of mass collaboration are changing how goods
and services are… distributed on a global basis”
(Tapscott & Williams, 2008)
File sharing is the practice of distributing or providing access to
digitally stored information:
• computer programs,
• multimedia (audio, images and video),
• documents
• electronic books.

31. Copy-rights
vs.
File-sharing
Primary information.
File sharing is not necessarily illegal,
even if the data being shared are covered by copyright.
Primary property.
File sharing is clearly to infringe on copyright laws.

32. Transparency
Report
Copyright Owners – 2,223
URL’s Requested to be Removed – 7,010,047*
Top “Pirate” Domains
in the Past Month:
• fenopy.eu
• filestube.com
• isohuntz.com
• torrentz.eu
• 4shared.com
* 10th of October 2012

33. Mechanisms
Platform based cloud storage:
• Apple iCloud
• Google Drive
Multi-platform based cloud storage:
• DropBox
• SugarSync
Peer-to-peer (P2P) and torrents:
• Napster
• The Pirate Bay
• BitTorrent
Some social networks:
• VK (V Kontakte)
• Odnoclassniki

34. Apple iCloud
for Apple users with Apple ID: Stores:
• Mac-based computers • music, photos, apps
• Apple TV • apps
• iPad, iPhone, iPod • documents & files
Functions:
• access iTunes purchases
• Synchronize data between devices
• share digital images

35. DropBox
Tool for storing and accessing any files from any devices with
Internet connection.
Tool, that integrates into any operation system = “virtual flash-drive”.
Simplified the process of uploading, downloading, and updating
all kind of digital content.
Allows to designate which files and folders will be accessible to
anyone.

36. Piracy Influence
The technology itself is perfectly legal.
Functional limitations:
• Tightening access to shared files
• Content scan (based on file’s control sums)
• Automatic remove of “suspicious” files = censorship
• Privacy reduction
• Prohibition of “direct” links

37. P2P & Torrents
Peer-to-peer file sharing allows users to download media files using a
special software client that searches for other connected computers.
Peer-to-peer file sharing began in 1999 with Napster, a file sharing
program and central servers that linked people who had MP3 files
with those who requested these files.
BitTorrent is a protocol used for distributing large amounts of data over
the Internet.
Peer-to-peer networks have accounted for
approximately 43% to 70% of all Internet traffic.
BitTorrent is utilized by 150 million active users.

38. Two Sides of
File Sharing
Positive:
BitTorrent protocol can be used to reduce the server and network
impact of distributing large files.
• Amazon S3 "Simple Storage Service" equipped with built-in
BitTorrent support.
• The UK government used BitTorrent to distribute details about
how the tax money of UK citizens was spent.
• Florida State University uses BitTorrent to distribute large scientific
data sets to its researchers.
• Facebook uses BitTorrent to distribute updates to Facebook
servers
“We grew up with the Internet and on the Internet. […] The Internet
to us is not something external to reality but a part of it. […]
We do not use the Internet, we live on the Internet and along it. “
Piotr Czerski

39. Two Sides of
File Sharing
Negative:
Pose a threat to distribution of pirated content.
File sharing hurts sales and influences on economic development.
File sharing represents high risk in terms of malware.
The risk to be punished by court decisions.
Example:
Minnesota woman to pay $220,000 fine
for 24 illegally downloaded songs
Ethic of illegal content download:
• 75 percent of young people aged 18-20 supported file
sharing: "I think it is OK to download files from the Net,
even if it is illegal."
• We forget the idea that content creators should be
rewarded for their work.

40. Content Must Be
Legal and Paid
• Movies, books, music, games should be downloaded from the
network only for a fee from the owner’s permission.
• If person pays, he/she becomes a discriminating consumers who
vote for the content by “paying money”.
Psychology:
1. People do not appreciate things that they get for nothing.
2. People feel uncomfortable in excess of choice.
3. Unlimited access to all desired content results in a spoiled
child syndrome.

41. Copy Right
into
Copy Risk
“Music can and should be made to feel free, even when it is not free.”
Jim Griffin
• Monthly payments
• Blanket (collective) license –grant rights to distribute recordings
to ISPs, collect money from them, and distribute the funds to
copyright holders.

42. References:
Go – Kim & Megaupload
BBC News. (2012). Porfile: Megaupload file-sharing site. Retrieved October 6, 2012, from BBC News
http://www.bbc.co.uk/news/world-us-canada-16657800
CrunchBase. (2012). Megaupload Limited. Retrieved October 6, 2012, from CrunchBase
http://www.crunchbase.com/company/megaupload-limited
Sidenius, K. H. R., Jensen, M. S., Jensen, B. H., Fiktus, M. K., & Tommerup, E. (2012). Copyright VS. Megaupload.
Roskilde University Digital Archive. Retrieved from http://rudar.ruc.dk:8080/handle/1800/7515
The United States district court for the eastern district of Virginia. (2012). Indictment. Virginia, VA. Retrieved
from http://www.scribd.com/doc/78786408/Mega-Indictment
Tonya - Copyright
Case 1:12CR3 (United States District Court for the Eastern District of Viginia Alexandria Division 2012).
Gerbic, P., & Lawrence, M. (2006). Understanding commercial law (6th ed.). Wellington: LexisNexis NZ Ltd.
World Intellectual Property Organization. (n.d.). Encouraging creativity and innovation.
from http://www.wipo.int/portal/index.html.en

43. References (cont.):
Garima – Customers
http://www.clipartguide.com/_named_clipart_images/0511-0811-0415-
3734_Cartoon_of_a_Red_Faced_Angry_Man_clipart_image.jpg (Picture 1)
http://comm200fa11.files.wordpress.com/2011/09/music_piracy_cartoon.jpg
http://www.fotosearch.com/CSP193/k1935509/ (Picture 2)
http://knowyourmeme.com/memes/events/operation-megaupload (Picture 4)
http://www.fotosearch.com/clip-art/angry.html#comp.asp?recid=55770885&xtra= (Picture 6)
http://news.cnet.com/8301-1023_3-57441702-93/eff-to-federal-court-return-megaupload-data-now/
(Picture 7)
BRIEF OF KYLE GOODWIN IN SUPPORT OF HIS MOTION FOR THE RETURN OF PROPERTY PURSUANT TO 18 U.S.C. §
1963 AND/OR FEDERAL RULE OF CRIMINAL PROCEDURE 41(g), 1:12-cr-00003-LO (IN THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION May 25, 2012). Retrieved from
https://www.eff.org/sites/default/files/filenode/BriefMotRetProp.pdf
Brodkin, J. ( 2012, January 21). Megaupload wasn't just for pirates: angry users out of luck for now. Retrieved
from ars technica: http://arstechnica.com/gadgets/2012/01/megaupload-wasnt-just-for-pirates-angry-users-
out-of-luck-for-now/

44. References (cont.):
Garima – Customers (cont.)
Roman, D. (2012, January 20). Spanish Anger at Megaupload Closure. The Wall Street Journal. Retrieved from
http://blogs.wsj.com/tech-europe/2012/01/20/spanish-anger-at-fbi-megaupload-closure/
Dmitriy – iCloud
Carmack, C. (n.d.). How BitTorrent Works. Retrieved from How Stuff Works:
http://computer.howstuffworks.com/bittorrent1.htm
Czerski, P. (2012, Feb 15). We, the Web Kids. Retrieved from Pastebin: http://pastebin.com/0xXV8k7k
Ernesto. (2010, Jun 25). Facebook Uses BitTorrent, and They Love It. Retrieved from Torrent Freak:
http://torrentfreak.com/facebook-uses-bittorrent-and-they-love-it-100625/
Ewing, A. (2006, Jun 8). Young voters back file sharing. Retrieved from The Local Sweden's News in English:
http://www.thelocal.se/article.php?ID=4014&date=20060608
Fisk, N. W. (2009). Understanding Online Piracy: The Truth about Illegal File Sharing. Santa Barbara: ABC-
CLIO, LLC.
Holpuch, A. (2012, September 11). Minnesota woman to pay $220,000 fine for 24 illegally downloaded songs.
Retrieved from The Guardian: http://www.guardian.co.uk/technology/2012/sep/11/minnesota-woman-
songs-illegally-downloaded
Levine, R. (2012). Free Ride: How Digital Parasites Are Destroying the Culture Business, and How the Culture
Business Can Fight Back. New York: Anchor Books.

45. References (cont.):
Dmitriy – iCloud (cont.)
Maxey, R. (2011). The Infinite Dropbox. Salt Lake City: RMWP.
Rich, J. R. (2012). How to Do Everything iCloud. McGraw-Hill Osborne Media.
Tapscott, D., & Williams, A. D. (2010). Wikinomics: How Mass Collaboration Changes Everything. Portfolio
Trade.