Judge tells Megaupload, other groups to work out server maintenance

Lawyers for Megaupload, the DOJ, the Web hosting company and other groups need to find a compromise, judge says

Lawyers for Megaupload, the U.S. Department of Justice (DOJ), Web hosting provider Carpathia Hosting and other groups fighting over who should maintain 1,100 servers formerly used by Megaupload should sit down and work out an arrangement, a U.S. judge said Friday.

Carpathia asked the U.S. District Court of the Eastern District of Virginia to relieve it of the responsibility of caring for the servers while the DOJ pursues a copyright infringement case against Megaupload. The DOJ, however, told Judge Liam O'Grady Friday that it doesn't want the servers and the potential cost of tens of millions of dollars as the case moves forward.

The DOJ has all the information it needs to try the case against Megaupload, said Jay Prabhu, an assistant U.S. attorney in the Eastern District of Virginia.

Megaupload lawyer Ira Rothken told O'Grady that the company would be willing to look after the servers, but the DOJ and the Motion Picture Association of America, pursuing a civil case against Megaupload, objected. The MPAA doesn't want the servers and an allegedly large amount of infringing data put back online, said Paul Smith, a lawyer for the trade group.

Giving the servers to Megaupload would be like "trusting the thief with the money," Prabhu added. "The transfer of allegedly infringing materials to the infringer was unacceptable to us."

Someone needs to maintain the servers, said Julie Samuels, a lawyer with the Electronic Frontier Foundation, representing Megaupload Kyle Goodwin, a video journalist who stored duplicates of his videos at Megaupload. Many of Megaupload's 150 million customers used the service for legitimate storage, and they need a way to retrieve their data, Samuels told O'Grady.

O'Grady told all the lawyers involved to sit down with a mediator and find a compromise. The DOJ had backed away from earlier discussions between Megaupload and Carpathia, but the judge encouraged the DOJ to come back to the table.

O'Grady also told Carpathia's lawyers that he was "sympathetic" to their argument that they should not bear the cost of maintaining the servers. Carpathia's cost of storing the servers is about US$37,000 a month, Carpathia lawyer Marc Zwillinger said.

"There are a lot of people who have interest in the data on these servers, except one," Zwillinger said. "That is us."

Megaupload has argued that the DOJ should maintain the servers if it objects to the company doing so. The servers may contain information critical to Megaupload's defense, including evidence of substantial noninfringing uses of the service, Rothken said.

But the DOJ has no interest or need for any more information on the servers, Prabhu said. Forcing the DOJ to maintain the servers would be a "massive burden" on the agency, he said.

In a court brief filed Thursday, the DOJ argued that Megaupload's claims that the servers contain important information to its defense are "pure speculation."

The EFF's Samuels suggested the DOJ may be the appropriate steward of the servers and the data. With the DOJ seizing more and more websites for copyright infringement, the agency needs to put plans in place to deal with the owners of legitimate data on those sites, she said.

"I think a lot of this chaos was of the government's making," she said.

O'Grady told all the groups to report back to him in two weeks. Further delays are inconvenient for legitimate users, but acceptable, Samuels said after the hearing.

"I didn't think Megaupload was going to get turned back on tomorrow," she said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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