Megaupload would have made copyright infringers of an earlier age "green with envy" through its ability to exploit the internet for money, the Supreme Court has been told.

Barrister Kieran Raftery QC, representing the United States, said the internet had no geographical boundaries and in this environment Megaupload had flourished.

"When it comes to copyright infringement, the advent of the internet has changed the landscape considerably."

He said Megaupload had harvested 180 million registered users during its existence.


"That is the sort of figure that would have made copyright infringers of the 19th and 20th century all green with envy."

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The US is having its first chance to be heard in the Supreme Court during the final appeal of the extradition case. It comes seven years after Kim Dotcom, Mathias Ortmann, Bram van der Kolk and Finn Batato were arrested on charges alleging a vast conspiracy to commit copyright infringement.

They were said to have done so through the Megaupload website, which the US claims to have caused US$500 million in losses to movie and music copyright holders.

Raftery urged the Supreme Court to dismiss arguments as to why the men should not be extradited, saying the conduct identified through the FBI investigation was a clear conspiracy to commit copyright infringement.

Asked by the court to identify the specific offending conduct, he said the FBI investigation had shown those involved in the "Mega conspiracy" encouraged users to upload infringing content through offering rewards for traffic accessing that content.

Megaupload accused Bram van der Kolk arriving at the Supreme Court today. Photo / Hagen Hopkins
Megaupload accused Bram van der Kolk arriving at the Supreme Court today. Photo / Hagen Hopkins

The links would then be shared through third-party sites which would direct people across the internet to movies, music and other content which was protected by copyright.

Those accessing the material would then find Megaupload didn't allow access to the entire film, he said.


"They wait for the sweet spot, 20 minutes before the end of the film, then it cuts off and you have to be a member."

Megaupload pulled "money in a big way" through such memberships, and through selling advertising on the site.

Raftery also attacked claims Parliament had written copyright law so as to offer a protection for internet service providers, and through that, to apply the definition to Megaupload.

"It seems to fly completely to the contrary of what would be commonsense."

He said increased penalties for copyright infringement in New Zealand at the time copyright law was changed showed Parliament took online piracy seriously.

Raftery said the law - contrary to arguments by the accused's lawyers - was not "designed to ensure someone in the position of the appellant are immune from prosecution".

The Supreme Court justice quizzed Raftery closely on how broad the alleged conspiracy was, given it was said it included those who were members of the site.

Megaupload accused Mathias Ortmann arriving at the Supreme Court today. Photo / Hagen Hopkins
Megaupload accused Mathias Ortmann arriving at the Supreme Court today. Photo / Hagen Hopkins

Chief Justice Helen Winkelmann asked how it was possible to be part of the conspiracy when Megaupload's terms of service specifically told users they were not to infringe copyright.

Raftery said the terms of service "was a sham" and breached more often than it was followed.

Earlier, barrister Anthony Rogers, representing Megaupload's former marketing manager Finn Batato, said the lower courts had not properly considered his client's role.

Batato - unlike the others - was not a shareholder in Megaupload, said Rogers.

"There is no evidence he did anything other than any employee is his position would do."

The day began with Kim Dotcom's lawyer Ron Mansfield aligning Megaupload with online services such as Dropbox and Youtube. He said they were all businesses of a type given specific protection when the New Zealand law of copyright was re-written to account for the online age.

The case was expected to finish on Friday. It will now run into next week.