A New Zealand appeals court has dealt another blow to file sharing mogul Kim Dotcom in his years-long fight against extradition to the United States on copyright charges. The court agreed with a lower court judge that Dotcom was eligible for extradition under New Zealand law, taking Dotcom a step closer to facing justice in the United States.
"We are disappointed with today’s Judgment by the New Zealand Court of Appeal," Dotcom's US lawyer, Ira Rothken, said in an emailed statement. "We look forward to seeking review with the New Zealand Supreme Court. We think that ultimately Kim Dotcom will prevail."
The case dates back to 2012, when authorities staged a spectacular raid on Dotcom's rented mansion in the Auckland area. Dotcom had built a massively successful company called Megaupload that had become a popular platform for illicit sharing of copyrighted movies.
Far from merely turning a blind eye to rampant file sharing on the platform, US authorities say, Dotcom and his staff knowingly and deliberately promoted the use of the platform for copyright infringement. According to prosecutors, that cost movie studios hundreds of millions of dollars in lost revenue.
But before they could put Dotcom on trial, the US government had to get Dotcom to the United States. And Dotcom has now managed to drag that process out for more than six years by fighting extradition in the New Zealand courts.
Last year, a judge on New Zealand's High Court upheld a 2015 ruling by the trial court that Dotcom could be extradited to the United States. High Court rulings can be appealed to New Zealand's Court of Appeals, which ruled on the case on Thursday.
The Court of Appeals agreed with the lower courts that Dotcom and three of his deputies, Bram Van Der Kolk, Mathias Ortmann, and Finn Batato, could be extradited to the United States to face charges there. But it differed from High Court judge Murray Gilbert on one important issue.
Extradition from New Zealand to the United States requires a showing that the alleged offense is considered a serious criminal offense under both US and New Zealand law. Dotcom's lawyers had argued that he shouldn't be extradited because New Zealand law doesn't provide for criminal prosecution for online file sharing.
New Zealand law criminalizes distribution of an "object" that is "an infringing copy of a copyright work." Dotcom's lawyers argued that movie files stored on a server are not "objects" for purposes of New Zealand law. And therefore, the operation of Megaupload couldn't be criminal copyright infringement.
In his 2017 ruling, Gilibert accepted this argument but argued that Dotcom was eligible for extradition anyway, reasoning that "willful infringement of copyright can properly be characterized as a dishonest act." Hence, the lower court judge concluded, running Megaupload amounted to conspiracy to defraud, which was a criminal offense eligible for extradition.
In Thursday's ruling, the Court of Appeals reached the same result by a more direct route, arguing that Gilbert had read the word "object" too narrowly. Copyright law long predates the Internet, so it necessarily focused on physical copies in its early years. But the court concluded that "object" should be interpreted broadly—to encompass digital files as well as physical copies. The court pointed to several court decisions and government reports that had drawn no distinction between physical and digital copies in interpreting this provision of the law.
"We have now been to three courts each with different legal reasoning and one of which thought that there was no copyright infringement at all," Rothken said.
In any event, the result was the same: the Court of Appeals found that New Zealand had serious criminal offenses corresponding to several of the charges the United States brought against Kim Dotcom and his colleagues, and hence that the group could be extradited to the United States.
The fight isn't over, though. The group can still seek appeal to New Zealand's Supreme Court—though the nation's highest court, like the US Supreme Court, only agrees to hear a minority of the cases that are appealed to it. Then, the New Zealand's government must decide whether to extradite Dotcom and his colleagues—which seems likely, given the amount of effort the government has put into the case. And then if Dotcom is sent to the United States, he and his colleagues will face trial in US courts, a process that could easily take several more years.
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