Megaupload Kim Dotcom extradition hearing: 'Possession' of files under scrutiny
Kate Newton , Senior Journalist, In Depth
Whether or not Kim Dotcom's file-sharing Megaupload ever properly possessed users' files - and therefore criminally breached copyright - has come in for heated debate in the Supreme Court.
The Megaupload legal team, including Kim Dotcom's wife Elizabeth Dotcom, arrives at the Supreme Court for day four of their extradition appeal hearing. Photo: RNZ / Kate Newton
The court is hearing the appeal of Mr Dotcom and his three co-accused - Bram van der Kolk, Mathias Ortmann and Finn Batato - against extradition to the United States.
The US Department of Justice wants to extradite the men to face trial over criminal charges related to Megaupload, which the FBI said was committing copyright infringement on a mass scale by hosting music, movie and software files.
The men encouraged this by paying financial rewards to users who uploaded popular files, the US said.
The men contend that Megaupload was only ever designed as an online file storage locker and did not encourage or intend for its users to upload or share infringing files.
Part of the legal appeal this week has turned on the question of whether hosting files was equivalent to possessing them.
To extradite the four, the Crown - on behalf of the US - has to show the men have a criminal case to answer.
One of the few criminal offences in the Copyright Act is possessing an illegal copy of something with a plan to further breach copyright, such as by sharing it.
The men's lawyers have argued that the mere act of hosting users' files did not amount to possession, so there was no criminal offence.
However, Crown lawyer Fergus Sinclair told the court today that Megaupload was able to control its users' files and delete them if necessary.
"Having the power to remove this infringing material placed them in possession of it."
Mr Dotcom's lawyer Ron Mansfield has argued this week that access was necessary to be able to access safe harbour provisions in the Copyright Act. Those provisions protect internet service providers from prosecution for their users' actions, provided they delete or remove access to the infringing material as soon as possible.
Megaupload had no more control than that, Mr Mansfield said. If it did not have that ability, it would be unable to claim the safe harbour.
However, Mr Sinclair said storage equated to possession - otherwise the safe harbour for internet service providers who stored their users' files would not need to exist.
"To make the safe harbour provision make sense you have to make storage [equivalent] to possession," he said.
The Crown has also argued today the men could not fall back on the safe harbour provisions to prevent extradition anyway.
It was a defence they could use if they faced trial, not a reason to block extradition, Mr Sinclair said.
"In that case, it would not be our safe harbour but the US safe harbour. That's why it's not appropriate to be drawing our safe harbour provisions into the defence."
The hearing in front of a full panel of the five Supreme Court justices is expected to continue until Monday.