1. REPORT PREPARED FOR: THE COPYRIGHT ISSUE ANALYSIS OF   BY XIU QIN LIU, GUANG HUI DUAN, XIN LI, MOHINI MARIA, POSTGRADUATE DIPLOMA IN BUSINESS APMG 8119: DIGITAL ENTERPRISE 2017
Use title slide layout

2. Background of Megaupload case
Six year old site, based in Hong Kong, was the home for digital pirates.
It was the 72nd most viewed site on the web in 2012.(Internet Traffic Analytics firm Aliexa)
The company operated as a “Cyberlocker”, which allows users to upload files to their server and share with others through URL.
The service of uploading, downloading and URL generating is free at the basic level, while premium membership is charged at an amount of money.
In 2012, Kim Dotcom and Finn Batato were arrested by US on the charges of gaining profits through copyright infringement conducts by operating Megaupload.com.
Kim Dotcom,
Megaupload founder
Finn Batato,
Megaupload CMO

3. Megaupload case study based on US copyright law
Megaupload breached US copyright law due to the acts as below: 1
Megaupload were involved and playing a facilitating role in a process where files were uploaded by Megaupload users who didn’t obtain the permissions from copyright owners.
The company turned a blind eye on and encourage the users to upload popular files through programs such as “Uploader Rewards” to have generated revenue out of adverts that associated with the downloaded files which were illegal.
Megaupload didn’t contract a copyright agent as required under the "safe harbor" of the Digital Millennium Copyright Act.
Instead of taking down an allegedly infringing file from its server, Megaupload deleted only those links through which a user could share the infringing files with others 2 3 4

4. How to define copyright infringement?
NZ Copyright Law
How to define copyright infringement?
What should ISP do?
New Zealand copyright Amendment Act, 2011 has given exclusive rights to the owners. Other people need to ask the permission before they can exercise one of those rights.
Infringement of copyright law is defined as copyright work being used without the permission from copyright owners.
3-notice process should be implemented, once the company receive evidence of illegal file sharing from copyright owners.
- Detention notice
- Warning notice
- Enforcement notice

5. Megaupload case study based on NZ copyright law
It is controversial that Megaupload breached New Zealand copyright law or not.
Who is the subject of copyright infringement?
Individual users.
By the New Zealand copyright law, those who use the files without owner authority are usually regarded as the offender. Therefore, in Megaupload case, the users rather than Megaupload itself should have been charged for copyright infringement.
Is Megaupload innocent based on NZ copyright law?
No.
Infringement notification was not sent to users appropriately.
Revenue was generated indirectly through illegal files uploading and sharing.

6. Data ownership on file sharing platform
“Personal data” is defined in 2 ways.
Copyright ownership
According to New Zealand copyright law, the ownership of copyright works always belongs to the original creator.
When uploading the file on to the file sharing platforms, the ownership or copyrights may be specifically defined depending on the content of terms of use agreement.
Personal information on the website
Privacy policy various from different companies.
In most of the case, the usage of user personal information data is described in the terms of use agreement, which is very important to customer to protect private information being disclosed or misused.

7. Sendspace.com case study
Sendspace.com provides similar services as Megaupload, with clear responsibility and liability description in the terms of use agreement published on their website.
Service Method
Highlights in terms of use agreement:
The stored data is sole responsibility and liability by user.
User has to make sure they’re the copyright owner or legal owner of the digital files.
User should have authority when they use another party’s material.
Sendspace.com may delete the data upon the determination of the terms of use agreement.

8. Legal issues of Sendspace.com
No obvious legal issues investigated for Sendspace.com; however, there is foreseen risks of copyright infringement.
It is clearly stated that how to report copyright infringement on the website. Therefore, legal risks is under control through a mature report and alerting mechanism of Sendspace.com.
Regarding to copyright owner, it is high risk to be offended, as sometimes it is hard to collect evidence to accusation misconducts.
Furthermore, even if they showed evidence of the act in violation of copyright law, it would be late most of the time, as it is already done, and loss might occur.

9. Practical Implication
The necessity of copyright registration by creators.
The Megaupload case would prompt the original creator of the copyright work to file to government agencies for formal copyright registration
Technological tools for copyright protection.
Technological tools for original users to identify and reauthorize the use of copyright works to the public use, such as Creative Commons.
There exists content identification system by which rights holders can automatically control their works when it is uploaded by a third party onto platform.
Legal system perfection.
The associated companies, such as file-sharing platform, should be advised actively to be involved in the process of related law adjustment.
The successful block of Stop Online Piracy Act (SOPA) bill in 2012 in the US congress has set excellent example for business to fight against excessive government control on the freedom of internet

10. Practical Implication
Cooperation with copyright licensing organizations/companies.
Apart from reminding users to upload legal copyright works by terms of use or any other webpage prompts, copyright data sharing and monitoring mechanism must be established
Obey the laws of business residence countries.
Whether the US or another world powers will reach out beyond their border to enforce their copyright laws is unknow, but it is clear that file-sharing companies must obey and fulfil strictly the legal obligations of the business residence countries.