It was inevitable once the smell of blood was in the water. Megaupload has been knocked off its perch by a police raid, its assets are frozen, and now the copyright lawyers are circling. The first aggrieved party to make a move is ValCom, and you could be forgiven for not being familiar with it. The company says many of its copyrighted files were being distributed via Megaupload, and now it wants compensation.
ValCom makes public notifications systems like those you might find in schools or public spaces. It also owns the rights to over 6,000 video and audio titles, and it is these that Megaupload is accused of hosting. ValCom is coming out swinging (and maybe looking for attention), reminding everyone in its press release that the maximum penalty per infringement under law is $150,000. Do the math, and 6,000 infringing files could be a staggering $900 million in damages. If things don’t go optimally (which is likely) ValCom might only get a few million for its trouble.
If anyone is going to get any money out of Megaupload, now is the time. The site is shut down, and things are about to get very expensive for the site owners. Also at issue is the probable mountains of infringing content that was being hosted on Megaupload. Almost every company that holds copyrights would have some claim to the funds being held by the government. It’s not going to be possible for everyone to get $900 million.
The Digital Millenium Copyright Act (DMCA) does allow for a site to claim safe harbor protection, provided that it complies with reasonable measures to the presence of infringing material. The fact that Megaupload was raided seems to close that door tight. Be on the lookout as more companies come out of the woodwork to file suits, and maybe they’ll want a look at that user data being stored by Megaupload’s hosting provider.