Kim Dotcom's legal team has filed a motion calling for charges against his file storage company Megaupload to be thrown out.
His lawyers have asked the United States courts to dismiss charges against the company, saying there is no ability for the courts to remotely charge the Hong Kong-registered company with a crime.
Dotcom's San Francisco-based lawyer Ira Rothken today confirmed the papers had been filed.
Copies of the motion were posted on Dotcom's and Mr Rothken's twitter feeds.
They allege: "It seems beyond dispute that Megaupload has been deprived of its property, has had its reputation tarnished, and has had its business destroyed by the Government's actions in this case''.
The action follows original papers, filed in the United States Eastern District Court of Virginia in May, stating that the FBI had acted outside the law when it inspired raids across the globe which led to the company being shut down and its assets seized.
The FBI has since filed a response, defending the case.
The next stage in the case is a hearing on July 27 where the motion to dismiss is heard.
"We believe the law and logic are on our side,'' said Mr Rothken.
It was the first time lawyers acting for Kim Dotcom and his co-accused filed a formal defence against the US Megaupload charges.
The defence came four months after New Zealand police arrested Dotcom and his three co-accused in a dawn raid.
They are facing an extradition hearing in August over claims of criminal copyright violation, money-laundering and racketeering through Megaupload, which was the world's biggest file-sharing website.
If accepted by the court, it could lead to charges against Megaupload being thrown out and the collapse of freezing orders over company assets.
If the court rejects the argument of tossing out charges against Megaupload, other papers ask the court to release money from the company so it can fund a defence. The papers stated that even if the FBI were right - and it asserts it is not - then the amount of money lost is out of proportion to the NZ$88 million in ready cash which had been seized.