FBI Blows Copyright Case

The high-profile case of contributory copyright infringement against file-sharing service MegaUpload was handed a major setback earlier today when the New Zealand High Court ruled that the search warrants used to seize servers and hard drives were illegal.
  The MegaUpload case was the US authorities' high-profile attempt to go after a non-U.S. internet service for contributory copyright infringement.  Contributory copyright infringement is defined as facilitating or encouraging copyright piracy, and MegaUpload was accused of encouraging copyright piracy by marketing a service where individual users could share files with others.  Since the corporate officers of MegaUpload lived in New Zealand, and their servers and data storage and servers were located outside the U.S., the FBI sought and obtained the cooperation of New Zealand authorities in serving warrants and arresting corporate officers.
  Responding to a legal challenge, the New Zealand High Court ruled that the warrants were illegal, as well as ruling that the FBI's moves to copy all the seized data and take it to the U.S. was unlawful.

"The warrants did not adequately describe the offences to which they related," High Court Judge Justice Helen Winkelmann said in her ruling. "Indeed they fell well short of that. They were general warrants, and as such, are invalid."

The ruling will impact further prosecutions in New Zealand and the U.S.  The judge ordered the FBI to return all copies of information and data provided by local authorities in violation of NZ law, and ruled that an independent lawyer would review all seized materials and judge what is relevant and appropriate to the case, and all other materials would be returned and could not be used in further court actions.  Lawyers for the Megaupload corporate officers raided indicated that they will argue,  in a hearing next week about how the case should proceed,  that all evidence seized in the raids should be considered tainted and invalid.  Standards in the U.S. are stricter, as any evidence obtained from illegal searches, or later developed based on information learned from the search, can not be used in court.  Lawyers for MegaUpload also argue that U.S. authorities cannot charge the company with criminal behavior because it is based in Hong Kong, asserting that no warrants or charges have been formally served on the company itself.
  Interestingly, lawyers representing the U.S. authorities said the ruling was "no surprise."  Which brings up the question of why jeopardize the case if you anticipate the warrants would be declared invalid?  Well, the procedures the U.S. have set up for combating intellectual property violations do not require any evidence of actual wrongdoing to take legal action.  The results in this case suggest that the U.S. will have trouble trying to gain cooperation from countries in the future in this area.  It's also a clear signal that a similar challenge in U.S. courts would be successful.

Sources -  NZ court finds Megaupload search warrants illegal,  Reuters
MegaUpload sees big court win, but case far from over,  cNet.com

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