There was no evidence put forward by the FBI the movies or music found on the defunct Megaupload site were actually covered by copyright, the Supreme Court has been told.
Instead, it was told the decision to extradite Megaupload's Kim Dotcom, and three others, was made on the assumption the works over which copyright was claimed were actually covered by United States copyright law.
Grant Illingworth, QC, told the Supreme Court in Wellington a serious criminal charge resulting in possible decades of prison time required the key evidential link to be shown.
It should not have been assumed, he said, because it was a core fact in the allegation of offending.
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Dotcom, Mathias Ortmann and Bram van der Kolk, along with Finn Batato, were found eligible for extradition to the US in 2015 to face those charges.
The charges relate to the Megaupload website, which was taken down in 2012 on the same day the four men were arrested in Auckland. The FBI alleges they ran the website to profit from pirated movies and music which were downloaded by users from Megaupload.
They deny the allegations on a range of grounds, and have maintained Megaupload was a service which offered cloud storage to users and claim copyright breaches were policed in accordance with the law.
Earlier appeals against extradition have failed at the High Court and Court of Appeal. This week sees their final appeal to the Supreme Court before Minister of Justice Andrew Little decides whether to sign the paperwork which would see them sent to the US to stand trial.
The decision to extradite the men was on the basis of a "Record of Case" put forward by the FBI, which was effectively the narrative of the investigation and the allegations which resulted in charges.
Illingworth said the narrative was "replete with allegations and assertions that various items enjoy copyright status without saying under what law".
"In the legal situation where there is an onus of proof, that has to be proved. The United States has not given you a critical piece of the puzzle."
He said that was evidence which showed the work claimed as being subject to copyright, which was named as such in the FBI case, was actually covered by copyright law in the United States.
"In any case, be it civil or criminal, if an allegation is made someone owns copyright … it's not something that can be assumed."
Illingworth said one such title which carried no proof of US copyright protection was the film Taken, starring Liam Neeson.
It was "actually produced in France", he said. "Each count (against the accused) requires its own analysis if US copyright law applies."
Illingworth put forward four grounds for appeal and faced a day of robust questioning from the Supreme Court justices, testing the grounds on which the appeal was based.
On the issue of copyright being proved, Justice Susan Glazebrook said it would be enough to know a film had recently been at the cinema to know it was subject to copyright.
"We do expect kids to know, and the ordinary person, they shouldn't copy (a movie) and put it on the internet."
She said any visit to the cinema saw theatregoers confronted with warnings against breaching copyright.
"We would expect just the ordinary person to know these things coming up recently would be subject to copyright."
Illingworth said it might be a reasonable assumption but a criminal case resulting in jail sentences of decades required specific documented evidence.
Ortmann, van der Kolk and Batato were present for the hearing but Dotcom was not present. His wife Liz Dotcom, who recently qualified as a lawyer, sat with Dotcom's legal team in the body of the court.
Dotcom, who made $40m out of Megaupload in 2010, tweeted during the proceedings: "In 2005 I created a website that allowed people to upload files to the cloud. At the time only small files could be attached to emails. Megaupload allowed users to email a link to a file. That's it.
"In 2019 the NZ Supreme Court decides if I should be extradited for this 'crime'."
Earlier in the day, Illingworth laid out the grounds for the appeal, which largely focused on attacking aspects of Dawson's 2015 judgment which found the four defendants eligible for extradition.
He called it a "cut-and-paste" judgment as part of an assertion it should have been subject to a judicial review at the High Court, instead of having the issues raised bundled into an appeal.
Illingworth said he had a copy of the extradition judgment with sections highlighted to show how much matched - or closely resembled - the US submissions. He said about 150 pages had been lifted from the US case into the judgment.
Other arguments put to the Supreme Court this morning saw Illingworth argue that copyright as alleged against the Megaupload defendants was "not criminal here". The hearing is expect to run the course of the week.