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Music labels follow movie studios in suing Megaupload

Megaupload founder Kim Dotcom arrives at the New Zealand Court of Appeals in Wellington September 20, 2012. REUTERS/Mark Coote
Megaupload founder Kim Dotcom arrives at the New Zealand Court of Appeals in Wellington September 20, 2012. REUTERS/Mark Coote

NEW YORK (Reuters) - Four music labels filed a copyright infringement lawsuit on Thursday against the file-sharing website Megaupload and its founder Kim Dotcom, three days after several major movie studios did the same.

The lawsuit says that Megaupload, Dotcom and other defendants "engaged in, actively encouraged, and handsomely profited from massive copyright infringement of music," according to a statement issued by the Recording Industry Association of America.

The plaintiffs are Warner Music Group Corp, a unit of Time Warner Inc, UMG Recordings Inc, a unit of Vivendi SA, Sony Music Entertainment, a unit of Sony Corp and Capitol Records, also owned by Vivendi, and all RIAA members. They say Megaupload generated more than $175 million in illicit profits from copyright infringement while causing "more than half a billion dollars in harm" to copyright owners, according to the lawsuit.

U.S. authorities, which closed down the website in 2012, accuse Megaupload of costing film studios and record companies more than $500 million by encouraging paying users to store and share copyrighted material, such as movies and TV shows.

Dotcom says Megaupload was merely an online warehouse and should not be held accountable if stored content was obtained illegally.

Thursday's lawsuit was filed in U.S. District Court for the Eastern District of Virginia.

On Monday, movie studios including Twentieth Century Fox Film Corp, a unit of Twenty-First Century Fox Inc, Disney Enterprises Inc, a unit of Walt Disney Co, and Paramount Pictures, a unit of Viacom Inc, all members of the Motion Picture Association of America, filed a similar lawsuit in the same court.

Dotcom's U.S. attorney, Ira Rothken, lambasted the lawsuits on Thursday.

"The RIAA, MPAA and DOJ are like three blind mice following each other in the pursuit of meritless copyright claims," Rothken said. "These cases are an assault on cloud storage technology, as cloud storage is a neutral technology that can be used for both good and bad purposes."

"Megaupload strongly believes it's going to prevail," Rothken added.

The lawsuit is seeking damages and Megaupload's profits.

The lawsuits come as Dotcom, also known as Kim Schmitz, is fighting a bid by U.S. authorities to extradite him from New Zealand to face online piracy charges over the website.

Meanwhile, the legal storm has not stopped Dotcom, a German national with New Zealand residency, from delving into politics, launching a party last month to contest New Zealand's general election in September.

(Reporting by Bernard Vaughan; Editing by Eric Walsh)

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