DOOM for Dotcom? Pleading the ‘I’m a Techie’ Defense
In January, federal prosecutors in Virginia indicted Kim Dotcom, a.k.a. Kim Schmitz, a.k.a. Kim Tim Jim Vestor, the high-flying internet entrepreneur behind the file-sharing website, MegaUpload.com.
Previously, I wrote about the larger ramifications of this case. The U.S. government’s ability to shut down Megaupload and prevent many innocent users from accessing their non-copyright-infringing data raises serious questions about the future use of the Internet, I explained.
Now, let’s focus on the defendant, Kim Dotcom.
The U.S. has charged Dotcom and several other companies and individuals with racketeering, copyright infringement, and money laundering conspiracies, along with aiding and abetting the distribution of copyrighted work. Over the course of 72 pages, the government tells a compelling story. Dotcom and his co-conspirators created MegaUpload.com, along with several related websites, to illegally obtain and distribute copyrighted material in the form of music, movies, and other media.
The scheme proved very lucrative, and the defendants made millions from their activities. To keep the scheme alive, Dotcom and others created incentive programs through which frequent “uploaders” of copyrighted material received payments or points, which could be redeemed for cash. (Of course, all of the above is only the government’s view.)
Dotcom’s lawyer responds that his client did not know that Megaupload was being used as a funnel for obtaining and distributing infringing material. The defense will certainly want to disclaim any knowledge on Dotcom’s part. The mere fact that Megaupload could be used to violate copyrights does not mean that Dotcom himself is guilty of any crimes. But, will the defense be able to prove that their client really had no knowledge of the massive copyright infringement alleged by the U.S.?
Prosecutors have provided a detailed outline of the alleged scheme. They have traced monies received by the co-conspirators. They have e-mail communications that appear to establish knowledge on the part of Kim Dotcom and other co-conspirators that they were soliciting and distributing copyrighted works. And, they have evidence of payments to various “uploaders” who delivered infringing materials to the website.
As outsiders looking in, we can only speculate as to how Kim Dotcom’s defense is taking shape. Did Dotcom’s attorneys engage in any pre-indictment negotiations with the U.S.? Dotcom and Megaupload have clearly been a target of U.S. prosecutors for some time. During the investigatory phase, but before an indictment is returned, defense attorneys often have an opportunity to meet with prosecutors to lay out their side of the story. In this careful dance, Kim Dotcom’s lawyers may well have presented the outlines of a “high-tech company” defense.
That defense goes something like this: Megaupload is a file-sharing website. It is open to the public, and allows individuals to upload, share, and distribute a broad array of media. As with any similar platform, this website can be used for both legal and illegal purposes. So, just because he is the architect behind Megaupload, Kim Dotcom cannot be held responsible for the copyright infringing activities of the website’s millions of users.
In fact, as the government well knows, Dotcom and his co-defendants took steps to limit infringing activities. They developed an “abuse tool,” which would identify infringing material and remove it from the Megaupload site. That this tool did not detect or stop all potentially infringing works from circulating is not Dotcom’s fault. And, even if it is, there are civil penalties and other remedies that can be employed short of arrest and criminal prosecution.
But, why tell the government all of this, especially before they have obtained an indictment? Pre-indictment negotiations offer defense attorneys an ideal opportunity to educate the prosecution. Why would the defense want to teach the government anything? The answer, at least in this case, is simple.
To the government, Kim Dotcom and his associates are nothing more than digital pirates. Dotcom and his gang knowingly plundered millions of dollars from innocent copyright holders for their personal enrichment. But, to a tech-savvy defense lawyer, Kim Dotcom and Megaupload did not engage in criminal conduct. Dotcom created a platform, nothing more. Megaupload is a passive website. It cannot obtain or distribute copyrighted material unless someone uploads the protected media in the first place. The mere fact that anybody can use Megaupload to distribute protected material does not make the website, much less its founder, guilty of criminal conduct.
But what about the evidence that Kim Dotcom knew that some users were transferring copyrighted material through MegaUpload? Herein lies the challenge. The “criminal” aspects of this case will ultimately turn on what Dotcom knew. If he was an active participant in the copyright infringement alleged by the U.S. government, then his attorneys may be limited in fully exploiting the “high-tech company” defense.
Whether Dotcom pleads guilty or goes to trial will be revealing. A trial may well be the digital equivalent of recent terrorism-related cases, requiring the defense to expose people, companies, and policies that the government may ultimately want to shield from the public.
Carlos F. Gonzalez is a Certified Anti-Money Laundering Specialist (CAMS) and partner at Diaz Reus & Targ, LLP, an international law firm serving U.S.-based and global clients, where he concentrates on trial and appellate litigation with an emphasis on international civil and commercial disputes and white collar criminal defense. Contact him at email@example.com.