Chris Barton: Dotcom's costly battle continues

Kim Dotcom's legal battle won't be ending any time soon. Photo / Getty Images

Megalong, megacostly, megaembarrassing. Will the Kim Dotcom extradition case ever end? And how much will we have to pay? The case has dragged on for over a year and we haven't even got to the extradition hearing. If it starts in August as planned that will be twenty months since the megainvasion.

Don't expect any respite soon. Whatever the outcome of the extradition hearing, we know it's going to be appealed. So that's another long track from High Court, to Court of Appeal to the Supreme Court. The slow grinding wheels of justice: I'm guessing at least another two years, maybe more.

As to costs, pick a number. In April last year, the army of Crown lawyers and others working at the behest of the American Department of Justice had racked up costs of $1.12 million - borne by us, the New Zealand taxpayer, because that's the nature of the extradition agreement we have with the United States. The $1.12 million has likely now doubled and by the time we reach the end of the extradition saga, the bill absorbed by our Ministry of Justice could be $4 or $5 million. That's not counting potential multimillion dollar damages claims by Dotcom and friends for illegal search and seizure, not to mention illegal spying by the GCSB.

The latest round in these endless legal machinations saw the Crown win back some ground. The Court of Appeal quashed Judge David Harvey's disclosure orders which had also been upheld by chief High Court judge Justice Helen Winkelmann in a judicial review. Judge Harvey and Justice Winkelmann had reasoned that Dotcom and his co-accused had a right to see the basis of the evidence against them, as set out in our Bill of Rights Act which includes the right to a proper preparation for a trial.

The Court of Appeal said that extradition wasn't a trial but a preliminary proceeding that relies on the mutual recognition by New Zealand and the United States of one another's laws. The Court did agree that the right to justice in our Bill of Rights does apply, but said at this stage the summary, rather than more detailed documents, of evidence provided was sufficient. In brief, the Court went along with the United States prosecutors' position - something along the lines of: "Trust us - the summary of the evidence is quite sufficient for Dotcom to stand trial". If there were any problems with the reliability of the evidence, the Court's view was they would best be dealt with at the trial proper rather than the extradition hearing. The Court of Appeal did point out, however, that as extradition is essentially a government-to-government process, specific requests for more detailed evidence could be referred through the Minister of Justice and diplomatic channels. No doubt Dotcom's legal team will be looking at that option if it doesn't manage to overturn the Court of Appeal ruling in the Supreme Court first.

Either way the specifics of the allegations against Dotcom will be canvassed in some detail in the extradition hearing in August - and it's here that we will at last begin to see just how real the "Mega conspiracy" is. The essence of the United States case is that Kim Dotcom, Bram Van der Kolk, Mathias Ortman, Fin Batato, Julius Bencko, Andrus Nomm and Sven Echternach all got together and conspired to set up Megaupload to engage in unlawful activities. The conspiracy is critical because it brings into play the United States racketeering statue known as RICO (Racketeer Influenced and Corrupt Organizations Act) and an extraditable offence. The United States needs to prove conspiracy because copyright infringement, while it is liable to civil remedies, is not something you can be extradited for. Pulled into RICO, the Megaupload case becomes an organised crime charge - hence the racketeering, money laundering and wire fraud charges. Making such a case requires quite a leap and some rather novel interpretations of copyright infringement.

But to conspire to commit an offence, there must first be an offence. So the United States prosecutors have to show criminal copyright activity. Easier said than done. As a "cyberlocker", Megaupload presents itself simply as a private data storage provider - a site where the users, not the owners, were doing the alleged copyright infringement. To make their case, the United States prosecutors use the notion of "constructive infringement" - a theory that has worked in the past in prosecuting file sharing sites such as Napster, Grokster and Kazaa. The idea is that, while not involved in actual copying, such sites are aiding and abetting people to engage in that activity. In Megaupload's case, it's alleged that the company offered financial incentives to premium subscribers to upload popular files and that such subscribers would receive payments based on the number of downloads of the stored material. According to the summary of evidence, less than nine per cent of Megaupload's subscribers had ever uploaded material - indicating that most users accessed Megaupload in order to view and download content. The United States case says most of the content was copies of copyrighted works and alleges that Megaupload "purposefully made their rapid and repeated distribution a primary focus of their infrastructure".

Not surprisingly the defence says "show us the evidence" - especially in relation to conspiracy. If the right to justice is still important in New Zealand, that seems a fairly reasonable request. But if I was a betting man, seeing how much Hollywood has already influenced our laws here, I'd have to say Dotcom's odds don't look good.