Megaupload may be known as Mega now but it’s still facing numerous lawsuits. Just recently, the whole company, with some former employees (Kim Dotcom, Mathias, Ortmann, and Bram Van Der Kolk), have been slapped with a new lawsuit by major movie studios in Hollywood. According to the complaint, Megaupload, as a file-hosting website, was encouraging piracy. Of course, the legal team of Megaupload is ready to fight and said that it’s nonsense.

The studios that filed the lawsuit include MPPA, Disney, Paramount, Twentieth Century Fox, Warner Bros., Universal, and Columbia Pictures. All of them teamed up and went to a Virginia District Court to finally file the said complaint.

Nothing new actually as the group is also facing some charges by the US Government on the same allegations.

As with any lawsuits, the plaintiff is seeking millions of dollars for the damages Megupload had caused them. According to the movie studios, Megaupload facilitated copyright infringement by design. That despite a DMCA notice, Megaupload would not delete the original file but rather just removed the first URL and did a redirect.

Steven Fabrizio from MPAA noted that the file-sharing site was not a cloud storage as others saw it. It was an “unlawful hub for mass distribution”, Fabrizio described.

Fabrizio also added,

“Megaupload was built on an incentive system that rewarded users for uploading the most popular content to the site, which was almost always stolen movies, TV shows and other commercial entertainment content. It paid users based on how many times the content was downloaded by others – and didn’t pay at all until that infringing content was downloaded 10,000 times.”  

Torrenfreak tried to get a comment from Ira Rothken, lawyer of Megaupload. According to Ira:

“Megaupload believes that the suit lacks merit and we will vigorously defend against the claims. The MPAA is apparently concocting a civil claim out of desperation two years after the indictment because it is likely that they and Department of Justice believe the pending criminal allegations lack merit, as there is no such thing as secondary criminal copyright infringement.”

Megaupload stressed that it wasn’t really used for file-sharing but rather used for backup. Naturally, the movie studios don’t believe this as uploading-downloading-piracy-etc. were still rampant, despite the rewards program also in question.

Let’s see how this story unfolds in the coming weeks or months. I find this one interesting as this will play a major development in the cloud storage industry especially in the US. We’ll see.

[via Torrentfreak]