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Megaupload Lawsuit News and Update: Film Studios Sue Kim Dotcom and Company For Copyright Infringement

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First Posted: Apr 09, 2014 11:40 AM EDT
MegaUpload Founder Kim Dotcom Released On Bail
(Photo : Sandra Mu / Getty Images )

Six major film studios including Twentieth Century Fox Film, Disney Enterprises, Paramount Pictures, Universal City Studios Prods., Columbia Pictures Industries, and Warner Bros. Entertainment have filed a lawsuit against Megaupload for allegedly encouraging and profiting from copyright infringement.

The civil suit was filed on Monday in the U.S. District Court for the Eastern District of Virginia against Megaupload, its founder Kim Dotcom, Megaupload majority shareholder Vester, the site's chief technical officer Mathias Ostmann, and its overseer of programming Bram van der Kolk.  According to the complaint, Megaupload benefited financially from the site and encouraged its users to upload popular and unlicensed content through the use of an 'Uploader Rewards' program.

Users who paid for the "Uploader Rewards" premium subscription, were granted access to unrestricted downloads, online advertising space, and were in turn paid based on how many times their content was downloaded.

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Prior to its shutdown in 2012, the Hong-Kong based company reportedly earned a grand total of $175 million and cost copyright owners more than $500 million by enabling copyright infringement on a massive scale. (Variety)

Megaupload made about $150 million from subscriptions and another $25 million from advertisements on Megaupload and associated websites, PCWorld reports. The six major Hollywood film studios plan to take $150,000 per infringement plus the profits generated by the defendants, according to the lawsuit.

"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. When Megaupload.com was shut down in 2012 by U.S. law enforcement, it was by all estimates the largest and most active infringing website targeting creative content in the world. It wasn't a cloud storage service at all; it was an unlawful hub for mass distribution," said Steven Fabrizio, general counsel for the Motion Picture Association of America, in a statement.

To check out the 24-page MPAA complaint, click here

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