Kim Dotcom's lawyers and the Crown are both considering appealing aspects of a Court of Appeal ruling that search warrants on Dotcom's Coatesville mansion were valid.
The warrants, executed by police on the properties of Dotcom and his associate Bram van der Kolk in January 2012, resulted in the seizure of some 135 electronic items.
The Court of Appeal today acknowledged there were "defects" in the warrants, but the warrants were legal.
The finding overturned a previous High Court decision that the warrants were invalid because they were not sufficiently specific. This was a major platform for Dotcom's fight against extradition to the United States to face a raft of charges relating to his Megaupload website.
Chief High Court Judge Helen Winkelmann had decided the warrants were not in sufficiently specific terms and "authorised the seizure of such very broad categories of items that unauthorised irrelevant material would inevitably be captured".
In overturning this decision, the Court of Appeal said a reasonable person receiving the search warrants would have understood what they related to.
"This view is reinforced by the fact that Mr Dotcom was a computer expert who would have understood without any difficulty the references in the search warrant to his companies ... and the description of the various categories of electronic items."
The court acknowledged the defects in the warrants were "in form not in substance".
"The defects in these warrants were therefore not so radical as to require them to be treated as nullities."
However, the Court of Appeal dismissed another aspect of the appeal, lodged by the Attorney-General, relating to the seizure of some 150 terrabytes worth of data from Dotcom and van der Kolk.
The Solicitor-General had given a direction that the seized items were to remain in the custody and control of the Commissioner of Police until further direction.
However, police permitted the FBI to remove clones - copies - of the items to the US. Justice Winkelmann ruled this was in breach of the Solicitor-General's direction and therefore unlawful, and the Court of Appeal agreed.
It also ordered a declaration that the removal of the clones from New Zealand was unlawful and that the police identify the clones that were removed.
Dotcom's US lawyer Ira Rothken said on Twitter today: "Our Kim Dotcom legal team is reviewing the ruling made by the Court of Appeal and will likely seek leave to appeal to the Supreme Court."
Attorney-General Chris Finlayson said the Crown was looking at whether it would appeal the decision which related to the police handing over the hard drives to the FBI.
Prime Minister John Key offered little comment on the decision.
"There's going to be a lot of twists and turns in terms of litigation with Mr Dotcom. These matters are highly likely to be appealed, so we'll leave it at that.''
He wouldn't comment on whether the decision increased the chances of Dotcom being extradited.
Mr Key said he expected the legal battle would continue beyond this year's election.
"If someone wants to appeal an extradition and take legal action at every nook and cranny then it can take a long time.''
Act MP John Banks also underlined that today's decision was only one of a number of milestones in the Dotcom case.
"It's a process, it's a long process.''
He would not comment further.
"These are not matters for me; these are matters for the Crown.''
Asked if he would be happy to see the back of Dotcom if he was extradited, Mr Banks said only: "It's a big back''.
NZ First Leader Winston Peters said the legality of the police warrants were not the central issue.
"The central issue is the use or distribution of information illegally and now two serious courts have found that to be the case.''
"I've always believed there was no way he could have got into the country under a proper immigration programme. I said so at the time and I've never changed my mind.''
Mr Peters believed today's decision did not make it easier for Dotcom to be extradited.
"How do you use evidence as part of your proceedings when because of your past actions you're denied the use of that evidence?''
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