A United States judge has allowed the case against Megaupload to proceed after throwing out an appeal from its founder Kim Doctom.
The internet tycoon's US lawyer, Ira Rothken, had argued prosecutors made a procedural error by serving an indictment against the Hong Kong-based company because it has no US address.
But in a ruling made public today, East Virginia District Court Judge Liam O'Grady found there was no procedural error and the case against the file-sharing company could proceed, Reuters reported.
The case is far from shut, however, with Judge O'Grady noting there could be other grounds for appeal, including that delays in the case could amount to a denial of due process.
Mr Rothken told Reuters he would seek a new hearing.
US prosecutors are seeking to extradite Dotcom from New Zealand to face charges of running a criminal enterprise.