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Court Looks Deeper Into Mining Megaupload Data

(CN) - A federal judge is reviewing proposals that address whether and how a small-business owner may retrieve his files from the downed servers of Megaupload.

Kyle Goodwin runs a small business called OhioSportsNet that reports on high school sports in the Buckeye state. According to his March 2012 brief, Goodwin paid for Megaupload's premium services so he could store videos, interviews and news stories on the website's cloud storage service.

After his own computer crashed, Goodwin claimed that he tried to recover his files from Megaupload, only to find that the FBI had shut down the website for copyright infringement.

Last week, Goodwin, who is represented by the Electronic Frontier Foundation, asked the court to unseal documents related to the government's warrant to shut down Megaupload.com.

"The government engaged in a overbroad seizure, denying Mr. Goodwin access to his data, along with likely millions of others who have never been accused of wrongdoing," Electronic Frontier staff attorney Julie Samuels said in a statement. "Access to the government's warrant application and related materials can help us learn how this could have happened and provide assistance in our efforts to get Mr. Goodwin his property back."

The court responded a request for proposals detailing what issues it should consider in a hearing on whether and how Goodwin can recover his property.

In a proposal filed Tuesday, Goodwin said the hearing should focus on three issues: "1) whether the government disregarded the property rights of Mr. Goodwin and other innocent Megaupload users by failing to properly minimize the effect on third parties of its searches and seizure of Megaupload-leased servers and domain names... 2) the effects of that failure on Mr. Goodwin; and (3) whether and how to require the government to take steps to return Mr. Goodwin's property as well as restore the property of other innocent Megaupload users who were harmed by the government's overbroad seizure and failure to conduct proper minimization."

The proposal also insists that any remedy should include all legitimate Megaupload users, not just Goodwin.

"The government's failure to properly engage in minimization harmed all of those affected, not just Mr. Goodwin; the remedy the government supplies should include all those harmed," according to the proposal. "A contrary result would create a perverse incentive for the government in future digital seizure cases: it would allow it to deprive innocent people of their property (here, likely millions of them) yet only have to take steps to return it to the relative few who have the wherewithal to mount a federal court evidentiary hearing in a likely far-away court." (Parentheses in original.)

Though the government has said that recovering Goodwin's data would be "inordinately expensive" and take about 22,000 man hours, Goodwin did not directly respond to this claim.

In its opposing proposal, the government disputed whether Goodwin has shown a legitimate interest to recover his property.

"Because Mr. Goodwin has yet to demonstrate whether he has an interest in any property seized by the government, any preliminary evidentiary hearing in this matter should be limited to the question of whether Mr. Goodwin has an interest in any property which he can show was seized by the government," according to its brief. "Because that question alone is likely dispositive of the motion, and because that question can be decided based on sworn affidavits and documents, such an approach will conserve judicial resources and avoid a fishing expedition into a pending criminal prosecution."

It asked the court to adopt a limited, incremental approach, so as not to interfere with the criminal trial, and to avoid "a mini-trial conducted by a third party regarding an investigation that is still pending."

The Motion Picture Association of America (MPAA), which is not a party to the action, also filed a response to the court's request on behalf of six major movie studios. It asked that "any remedy granted should not compound the massive infringing conduct already at issue in this criminal litigation."

The association asked to participate in any part of the hearing pertaining to the potential retrieval process for Megaupload users, reminding the court of "the overwhelming amount of infringement of the MPAA members' copyrighted work on Megaupload."

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