The U.S. government seems to be losing ground quickly in the PR war surrounding the case against Megaupload, the massive file-sharing site, and the company’s leader, Kim Dotcom. Just over a week ago, we learned that Quinn Emmanuel had signed on as the company’s defense team; the firm hit the ground running with a brief calling B.S. on one of the government’s objections.

And on Friday evening, news broke that the FBI may have again screwed the Megaupload pooch. The potential procedural goof was apparently severe enough that a federal judge wondered aloud if it might have killed the case…

TorrentFreak gives us the news on the government’s latest struggles to prosecute Dotcom. CHECK YOU SERVICE OF PROCESS:

It turns out that the US judge handling the case has serious doubts whether it will ever go to trial due to a procedural error. “I frankly don’t know that we are ever going to have a trial in this matter,” Judge [Liam] O’Grady said as reported by the NZ Herald. Judge O’Grady informed the FBI that Megaupload was never served with criminal charges, which is a requirement to start the trial. The origin of this problem is not merely a matter of oversight. Megaupload’s lawyer Ira Rothken says that unlike people, companies can’t be served outside US jurisdiction. “My understanding as to why they haven’t done that is because they can’t. We don’t believe Megaupload can be served in a criminal matter because it is not located within the jurisdiction of the United States,” Rothken says. Megaupload’s lawyer adds that he doesn’t understand why the US authorities weren’t aware of this problem before. As a result Judge O’Grady noted that Megaupload is “kind of hanging out there.”

As Randy Marsh once said, “Well, that sucks.” It will be interesting to see how the feds respond to this. These issues can be complex (and are surely absorbing many hours of Quinn associates’ time), but they come up frequently in cases like this one. Defendants who are not located in the United States frequently cry “no jurisdiction” or “improper service,” but the government claims they have sufficient contacts with the U.S. and goes after them anyway.

Kim Dotcom, who is still under house arrest in New Zealand, took news of the FBI’s possible screw-up as an opportunity to go on the offensive:

“They destroyed 220 jobs. Millions of legitimate Mega users have no access to their files.”

The government has gotten a lot of flack for allegedly seizing not only copyright-protected data, but also information owned and uploaded by individuals who no longer have access to their own files. Negotiations on how to handle that data will start later this week.

Dotcom continued ranting against the attorney problems that Quinn tried to fix just over a week ago:

“We are refused access to the evidence that clears us, we are refused funds to pay our lawyers, we are refused to pick the lawyers we want to represent us and have any chance for a fair trial,” Dotcom says.

And then he turned his ire to the Hollywood “copyright extremists”:

This Mega takedown was possible because of corruption on the highest political level, serving the interests of the copyright extremists in Hollywood,” he says. “Mega has become a re-election pawn.”

It’s interesting to see how Megaupload appears to be prevailing over the government in the spin war. At first, going after Megaupload seemed like a slam-dunk. Even people who don’t disagree with a lot of the entertainment industry’s enforcement tactics could see the seemingly clear legal justification for going after the cyber locker. It was pretty obvious (and I know this from personal experience) to anyone who’d ever visited Megaupload that there was A LOT of copyrighted content on the site that probably shouldn’t have been there.

But various bungles on the part of the prosecution may have squandered some of the good PR karma the government had going into the case. We will just have to wait and see if the feds have any other tricks up their sleeve.

Megaupload Trial May Never Happen, Judge Says [TorrentFreak]

Kim Dotcom Lashes Out Against “Corrupt” US Government [TorrentFreak]

Dotcom trial may not occur – Judge [New Zealand Herald]

Earlier: SOPA Be Damned, DOJ Has Sent a Message to Internet Pirates. And the Internet Sent a Message Right Back