WIPOD – Intellectual Property Matters: Transcript of Eye on Copyright Enforcement – Episode 2

The Megaupload Saga

Karen Lee: Welcome to Intellectual Property Matters. In this WIPO podcast, we explore the fascinating world of creativity, innovation and intellectual property. Let's listen, learn, and get inspired.

Ben Rylan: Hello, I’m Ben Rylan. Welcome to the second episode of Eye on Copyright Enforcement.  

Today, we’ll hear from the Motion Picture Association about the ongoing copyright infringement case against Megaupload, a popular file hosting platform that provided access to millions of gigabytes of copyright-protected content – most of it pirated. 

The early days of the Internet looked quite different to what we’re used to today. For many of us, social media sites like Instagram and TikTok are the main points of reference for sharing information – whether it’s a funny video, holiday pictures, or daily musings on the tiniest details of everyday life.

But, there was a time when the idea of “sharing information online” often meant something quite different. The arrival of file sharing sites helped give rise to a whole new industry of media piracy, mainly the illegal sharing of films, television, and music.

One of those sites, called Megaupload, was launched in 2005, and it was the brainchild of a rather colorful character named Kim Dotcom.

My guest today is Karyn Temple, Global General Counsel for the Motion Picture Association.

Karyn, welcome to the show. To start, can you take us back to the early 2000s, what was Megaupload back then?

Karyn Temple: Well, Megaupload was actually at one point in time, the 13th most visited site on the entire Internet, it was 4% of the worldwide Internet traffic. I mean, it was a website that had 50 million daily visitors, but it wasn't simply selling candy canes.

It was an unlawful – what we call cyberlocker – that made stolen films and movies available worldwide, via what they called an incentive system. Users were rewarded for uploading illegal popular content to the site which was often stolen films, TV shows, and sometimes video games, music, and their pay was based on how many times the content was then downloaded by someone else. So, the more you put up stolen films, the more pay that you got as a user for that. Megaupload was then paid through advertisements to the website as well as through what they call premium subscriptions, where some people actually paid to get greater and faster access through the site.

Cyberlockers can be legitimate sites. If you're not putting stolen films and movies and music on it, it can just be a storage, a cloud storage. And what was unique about this though, it was taking something that could be used to store any type of legitimate content (so your term papers, your photographs, etc.), but turning it into an illegal structure that allowed for people from around the world to then sign-in and store these illegal films, music, video games. It was kind of unique, by taking something that was legitimate, and then turning it into something that was unlawful.

Ben Rylan: There was an indictment brought against Kim Dotcom. What was he accused of doing?

Karyn Temple: In January of 2012, Kim Dotcom, who was the founder of Megaupload, and some of his associates, were indicted by a grand jury, actually in Virginia in the United States, and the site operators were charged with basically engaging in a massive criminal copyright infringement as well as racketeering. It was a conspiracy, racketeering and copyright infringement case against Megaupload, that kind of started the public’s more general interest in the goings of the Megaupload.

Ben Rylan: And what was in it for him? Can you explain a little bit about how lucrative these activities might have been?

Karyn Temple: Yes, that's what was really striking about this particular case. In the indictment, it noted that the defendants had criminal proceeds of more than $175 million dollars. Kim Dotcom himself was certainly not shy about showing the proceeds of his criminal activity. This was a guy who had actually a pretty large Twitter following and he would boast about the kind of types of illegal goods he was able to get from the proceeds of his criminal activity.

He had three silver Mercedes with license plates that were labeled “GOOD”, “AND” “EVIL” – he would park them in the road so you could see them. That was some of his cars, and then he had a number of other cars with license plates such as “MAFIA”, “HACKER”, “STONED” and, just to put it, I think, in our face, the word “GUILTY” was one of his license plates. He had a 25,000 square foot mansion, I believe it was in New Zealand.

This was not something that he was doing for free or somehow just doing it for the public benefit. This was a huge criminal conspiracy, in which he and the other defendants were able to make massive amounts of money off the backs of the content that other people should have been rightly paid for, just like any other criminal conspiracy.

Ben Rylan: Well, he certainly wasn't a shy character and still isn't even today. Now, of course, as you mentioned, that indictment did eventually come. How did Kim Dotcom and his associates respond?

Karyn Temple: Well, they did respond fairly aggressively. They challenged the indictment. I think they there were search warrants and things that were done in New Zealand, which they challenged as well as the actual process there. So they aggressively challenged both the indictment and all of the procedures that were surrounding it.

One of the things that amazingly we're still waiting on is that they challenged the extradition back to the United States. So there are you know, a number of defendants who are not located in the United States, even though the indictment is in the United States.

We still do not have Kim Dotcom extradited to be able to face a jury here in the US. He is still currently fighting that, and more recently, actually, several defendants – his codefendants actually – pled guilty in New Zealand to avoid being extradited to the US.

So even though the indictment was first in 2012, there have been a lot of different legal proceedings that are still ongoing and we still haven't gotten to that final stage of the case, where we actually can have that criminal trial against Kim Dotcom and some of the defendants.

Ben Rylan: Karyn, why is it so hard to enforce copyright infringement internationally?

Karyn Temple: Well, it's complicated by the individual laws of each country. That is one of the things that makes copyright enforcement today, somewhat more difficult than we've ever had it before, because you're talking often about cases that involve a lot of different jurisdictions. You might have individuals who are defendants in one location, their servers – where they are storing the illegal computer files – at another location, codefendants at another, so a lot of different jurisdictions and countries are involved.

You have to go through often very onerous legal proceeding, either if you're trying to sue them civilly, or even if you're doing it criminally; and the Kim Dotcom case, he challenged the extradition, basically at every single level within the New Zealand court system. I think he challenged it at what we would call the district court level, and then he appealed it, so every time the US was attempting to extradite, he would challenge that extradition, and then you would have to go through a proceeding; and then you would then he would appeal that proceeding. That's why it's taking so long, because often some of these legal proceedings can take years to actually become final.

Ben Rylan: As we mentioned, Karyn, you represent the Motion Picture Association, which became involved in the case early on. Why did that happen? And how did the MPA’s involvement impact things?

Karyn Temple: It was the film studios’ content that was a large part of the stolen materials that were being used and sold on the website. So as I said, there were films, there was music, there was video games, but films were a large part of that.

We often will participate in criminal investigations, against various copyright infringement that is done on a commercial scale. We will, for example, help with evidence; we will provide information about the films and shows that are being stolen, showing that they're being stolen, that they're not being authorized to be on that website. That's what we did in this particular case: preparing evidence that the law enforcement could use for their criminal indictment.

Then we also did something separately, which we often do in these cases, and that is, we actually sued civilly as well. So we, along with the record companies, brought civil litigation against Kim Dotcom and Megaupload for the illegal conduct as well.

Ben Rylan: Still to come on the program: we'll hear from Karyn on how the long-term impact of the Megaupload case and changed the international enforcement of copyright infringement. Stay tuned.

Ben Rylan: You are listening to Eye on Copyright Enforcement. Still with me is Karyn Temple. She is the Global General Counsel for the Motion Picture Association. We're talking about how the actions of Kim Dotcom and his Megaupload file sharing site impacted the enforcement of copyright infringement globally.

Karyn, there were obviously many legal implications following this case. But what about the impact on the public perception of copyright enforcement? I mean, do you think it changed the way that we think about what copyright actually means?

Karyn Temple: Well, you know, I do, because, in some sense, the sensationalism of this particular case I think was –hopefully- able to show the public that these type of copyright infringement cases are just like other criminal cases. Just like other cases of theft and racketeering and criminal conspiracies.

A lot of times in the past, you've had people who've argued that somehow copyright infringement itself is a victimless crime or it doesn't hurt anybody, or the people who are doing it are doing it just because they want to get content out there. But I think the way this case proceeded, the way that Kim Dotcom and the defendants boasted about all of the various money that they were able to get through this illegal website, very, very publicly, again, showed –hopefully- to the average person that they're doing it for greed, just like any other criminal.

I think the fact that people were able to see that this is a defendant who and the codefendants who were able to make more than $175 million dollars; who were able to have cars and jet skis and mansions. You see the victims, because you are actually able to see how much money is being made and that this money is again, not going to the creators, it’s instead going into the pocket of Kim Dotcom, so you can have a license plate that says “GUILTY” on it.

Ben Rylan: What challenges do content creators and distribution platforms in film and the music industries face today, when it comes to enforcing copyright?

Karyn Temple: It's getting more difficult just because of the complexity: the multiple different jurisdictions that you have to deal with, as I said before, you're going to have cases that have aspects of each case in various different countries. So often now, we have to deal with law enforcement in multiple different countries. Even if we're going after one website.

Then, of course, you’re dealing not only with law enforcement in multiple different countries, you're dealing with the laws in multiple different countries. Some of the times those laws, they’re usually not conflicting, but they might be different in terms of the strength of their legal protections for copyright, for example.

You have to research and understand the various laws of each country that you might have to go into, just again to go after one specific target. That makes it really complicated: understanding how the overall global legal system is working and how you can go after the target, wherever that target may be. That is one of the -I think- the most difficult aspects of enforcing now, just the global nature of online piracy.

Ben Rylan: And what about some of the smaller content creators? How does online copyright infringement affect some of those artists who may not have some of the resources that those big entertainment conglomerates have?

Karyn Temple: Imagine an individual trying to go after targets in multiple jurisdictions, or having to send many -like large content owners do-, millions of DMCA notices weekly or monthly. That’s just something that is out of reach for most independent and small creators.

It is really unfortunate, because we often talk about the fact that if you don't have redress, you don't really have a right; and a right without some way to enforce the right is no right at all. So you have creators who have this copyright of their works, but if they can't enforce it, because they can't stop someone from selling it, that it's meaningless to them.

That’s actually something that has been discussed a lot in a lot of different countries. And the United States, I am glad to say that they have done something recently about that, by passing in the last couple of years, what we call the Case Act, which was a provision that created basically a small claims court for essentially smaller creators and independent creators to be able to get into court, without having the enormous amount of resources that are needed and costs that are needed if you're going to regular federal court. So, it's a small kind of claims court in the United States Copyright Office, so that there is this form of redress for smaller creators.

But that is how difficult it is often for creators to be able to protect their rights and we had to actually, in the United States, created an entirely new tribunal to be able to help assist independent and small creators to protect their rights.

Ben Rylan: Karyn, if you're talking to someone who is an independent artist, perhaps, what would your top tips for them be if they think that some of their intellectual property is at risk or has been infringed upon?

Karyn Temple: I would say especially those in the United States to go to the United States Copyright Office. As a former Director of the US Copyright Office, it is a really great resource for all content owners, but small creators and independent creators as well. There's a lot of information.

One of the most important things in the US is to register your copyrights. It's not required, in order to protect your copyrights, to have a copyright registered in the US, but you do need to have a registered copyright to be able to go into court. That's why it's very important for you as an artist to be able to register copyright.

It also affects your ability to get what we call in the United States statutory damages, which are usually much higher than your actual damages. So, it's important to register your copyrights both to be able to get into court, but also to get access to statutory damages in the United States.

So that's, I think, one of the biggest tips that I would give, and then to utilize all types of different organizations that might be out there that can help. There are organizations like the Volunteer Lawyers for the Arts, and other organizations that on a pro-bono basis might be able to assist those independent and small creators as well, in terms of protecting their rights.

Ben Rylan: Just finally, Karyn, I understand that the MPA has a sister organization called ACE. Can you tell me a little bit about what that is?

Karyn Temple: ACE stands for the Alliance for Creativity and Entertainment, and, we like to call it the world's leading content protection coalition worldwide, dedicated to combating copyright infringement around the world. One of the things that is unique about ACE is that it's not made up just of the MPA studios. It is actually made up of the MPA studios plus a number of different content owners globally. So we include the six MPA studios, Apple TV is a member, Amazon is a member, Canal+ is a member, and we also have organizations, again, from around the world. So we have organizations, local content owners, that are based in Asia, that are based in the European Union, that are based all around the world with one goal in mind, and that is to protect content and to ensure that we can combat digital piracy.

We have a team of nearly 100 investigators that are basically working around the clock to find targets out there that are stealing our ACE members’ contents; go after them wherever they may be. Sometimes that might be us knocking on the door in the Middle East; sometimes it might be knocking on the door in Asia – to literally go after these content owners, wherever they might be located.

Sometimes it’s through civil suits. Sometimes it’s working with criminal law enforcement. We have been you know really pleased with our progress on this, in terms of the ability to attack this global problem at the scale that we are currently able to, with the amount of resources we've been putting in, by having so many different partners participate. It’s a growing coalition, every day we seem to have a new coalition. I think we just hit over 50 members of ACE worldwide and we're continuing to expand that to make sure that again, we can stamp out online piracy wherever it may be in the world.

 

Ben Rylan: Karyn Temple thank you very much for joining us. Karyn is the global General Counsel for the Motion Picture Association. Thank you for listening to Eye on Copyright Enforcement, a production of the World Intellectual Property Organization, brought to you with the support of the of the Ministry of Culture, Sports and Tourism of the Republic of Korea. I’m Ben Rylan. I will be back next time with another conversation on copyright enforcement. I do hope you’ll join me. Until then, good bye.