By Ray Pride Pride@moviecitynews.com

MOVIE STUDIOS FILE LAWSUIT AGAINST MEGAUPLOAD AND ITS OPERATORS OVER MASSIVE COPYRIGHT INFRINGEMENT

Posted Monday, April 7th, 2014 - Comments Off on MOVIE STUDIOS FILE LAWSUIT AGAINST MEGAUPLOAD AND ITS OPERATORS OVER MASSIVE COPYRIGHT INFRINGEMENT
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Washington, DC – The major U.S. movie studios today filed a lawsuit against Megaupload and its
key operators, alleging that the defendants facilitated, encouraged, and profited from massive
copyright infringement of movies and television shows before the defendants were indicted on
federal criminal charges and Megaupload was shut down.

“When Megaupload.com was shut down in 2012 by U.S. law enforcement, it was by all estimates the
largest and most active infringing website targeting creative content in the world,” said Steven
Fabrizio, Senior Executive Vice President and Global General Counsel of the Motion Picture
Association of America. “Infringing content on Megaupload.com and its affiliates was available in at
least 20 languages, targeting a broad global audience. According to the government’s indictment, the
site reported more than $175 million in criminal proceeds and cost U.S. copyright owners more than
half a billion dollars.”

The lawsuit was filed by Twentieth Century Fox Film Corporation, Disney Enterprises, Inc.,
Paramount Pictures Corporation, Universal City Studios Productions LLLP, Columbia Pictures
Industries, Inc., and Warner Bros. Entertainment Inc., in the U.S. District Court for the Eastern
District of Virginia.

The defendants named in the lawsuit are Megaupload Limited, the registered owner of the
website; Vester Limited, the majority shareholder of Megaupload Limited; Megaupload founder
Kim Dotcom (aka Kim Schmitz and Kim Tim Jim Vestor); Mathias Ortmann, the Chief
Technical Officer; and Bram van der Kolk, who oversaw programming.

“Megaupload was built on an incentive system that rewarded users for uploading the most
popular content to the site, which was almost always stolen movies, TV shows and other
commercial entertainment content. It paid users based on how many times the content was
downloaded by others – and didn’t pay at all until that infringing content was downloaded
10,000 times. Megaupload wasn’t a cloud storage service at all, it was an unlawful hub for mass
distribution,” Fabrizio said. “To be clear, if a user uploaded his term paper to store it, he got
nothing – and, in fact, unless he was a paying subscriber, Megaupload would delete the paper if
it was not downloaded frequently enough. But if that same user uploaded a stolen full-length
film that was repeatedly infringed, he was paid for his efforts. That’s not a storage facility; that’s a business model designed to encourage theft – and make its owners very rich in the process.
There’s nothing new or innovative about that. That’s just a profiteer using existing technology
to try to get rich off of someone else’s hard work.”

Fabrizio noted that the television and movie community is working every day to develop new
and innovative ways to watch content online. “Today, it’s easier than ever to watch the shows
and movies you love where you want them, when you want them. Our industry is committed to
giving consumers more choices, and to delivering the high-quality, fast viewing experience that
audiences expect and deserve. But Megaupload — and sites like it that are built on stolen works
— damage the consumer experience online and undermine the creators who don’t get
compensated for their work.”

A copy of the complaint can be found here.

About the MPAA
The Motion Picture Association of America, Inc. (MPAA) serves as the voice and advocate of the American motion
picture, home video and television industries from its offices in Los Angeles and Washington, D.C. Its members
include: Walt Disney Studios Motion Pictures; Paramount Pictures Corporation; Sony Pictures Entertainment Inc.;
Twentieth Century Fox Film Corporation; Universal City Studios LLC; and Warner Bros. Entertainment Inc.

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