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Judge Tells Megaupload, Carpathia, DOJ to Resolve Server Maintenance Duties

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On Friday, a US judge told the lawyers for Megaupload, the US Department of Justice, web hosting provider Carpathia Hosting, and other parties involved in a dispute over the maintenance of the 1,100 servers previously used by Megaupload, that they should discuss the situation and arrive at a resolution.

Last month, Carpathia Hosting asked US District Court of the Eastern District of Virginia asking to relieve it of its hosting duties for the frozen Megaupload content as the DOJ continued its copyright infringement case against Megaupload.

Megaupload lawyer Ira Rothken said last week that if a verdict against Megaupload is reached it could lead to other cloud storage companies being held criminally liable for illegal content stored by customers
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With so many parties involved, each with their own agenda, the situation is only becoming more complicated.

The DOJ told Judge Liam O’Grady that it does not want the servers and being forced to comply would be a “massive burden” on the agency, which could result in tens of millions of dollars in hosting costs as the case continues.

Jay Prabhu, an assistant US attorney in the Eastern District of Virgini, said the DOJ already has all the information to bring forth a legal case against Megaupload.

Prabhu attacked Carpathia, claiming that its management was not merely an innocent third-party bystander because it had been warned with subpoenas regarding its alleged copyright violations from the government along with civil complaints filed against Megaupload.

He also told O’Grady that Carpathia profited significantly from hosting Megaupload, enabling the company to generate $35 million in revenue. He added that he had no reason to believe that Carpathia was a target for civil litigation.

Rothken told O’Grady Friday that while Megaupload was willing to maintain the servers, it would be like “trusting the thief with the money”.

Both the DOJ and the Motion Picture Association of America strongly objected to the servers being handed over to Megaupload.

Electronic Frontier Foundation attorney Julie Samuels, who discussed the case with the WHIR in February, told O’Grady that there are 150 million former Megaupload customers who used the service for legitimate storage, and continue to rely on their maintenance so that they can retrieve their data

She suggested that the DOJ ought to maintain the servers, particularly when consider that the agency continues to seize hundreds of thousands of websites for copyright infringement and should arrange a deal with the owners of legal data on those sites.

O’Grady told the lawyers of the various parties that they should sit down with a mediator and come to a resolution, and to report back to him in two weeks.

He also told Carpathia’s lawyers that he was “sympathetic” to their situation and they should have to continue paying the server maintenance fees, which is estimated to cost Carpathia $37,000 a month.

Talk Back: Which group do you think should be responsible for maintaining the servers? Do you feel that Carpathia should be reimbursed for the costs of maintaining the servers up until now? Let us know in the comments.

About the Author

Justin Lee has been a staff analyst with theWHIR since 2004. He writes about a range of web hosting and IT-related issues facing the industry on the WHIR website, as well the print version of the WHIR magazine. Follow him on Twitter @Justin_theWHIR.

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