Is Megaupload doomed? Last month, we talked to three legal scholars who suggested that the shuttered file locker was probably in trouble. While the University of Virginia's Chris Sprigman thought Megaupload's principals had a fighting chance of being acquitted, James Grimmelmann of New York Law School argued that the government had a strong case—perhaps even a "slam dunk."

But Jennifer Granick, a Bay Area attorney blogging for Stanford's Center for Internet and Society, has risen to Megaupload's defense, calling the site "a lot less guilty than you think."

Granick focuses on an issue that didn't come up much in our earlier discussion: the distinction between civil and criminal law. Traditionally, copyright enforcement has largely been a civil matter—that is, it focused on private disputes between copyright holders and infringers. But in recent years, Congress has increasingly made copyright infringement a criminal matter, getting the federal government directly involved in prosecuting alleged infringers.

For example, the lawsuits against Napster and Grokster a decade ago were both civil cases in which major copyright holders sought damages and injunctions against the file-sharing services. The individuals who ran those companies didn't face jail time even though they lost their cases. In contrast, Megaupload is being criminally prosecuted by the federal government. If he loses the case, CEO Kim Dotcom (read our profile) is likely to spend years in jail.

That matters because some of the government's key arguments against Megaupload are based on judge-made doctrines that have emerged from civil cases. Concepts like "secondary liability" (e.g. a company like Napster knowingly facilitating infringement by users) and "inducement" (e.g. Grokster "inducing" its users to commit infringement) were created through America's common-law legal process, in which earlier decisions serve as precedents for later ones. And the courts have shown great reluctance to throw a defendant in jail for actions that have not been explicitly declared illegal by Congress.

Direct vs. indirect

Megaupload's executives face two kinds of charges. First, they are accused of direct copyright infringement—the unauthorized duplication of copyrighted works by the defendants themselves. Second, they are accused of secondary infringement—aiding and abetting infringement by Megaupload users.

"I agree with the copyright law experts interviewed by Ars Technica that the most damning allegations in the indictment are the claims of direct infringement, particularly for the prerelease movies," Granick said in her blog post. But she argued that the government's case was much weaker on the secondary infringement charges.

Granick says the government's "aiding and abetting" charges are "something like the civil liability inducement theory the US Supreme Court created in the 2005 Grokster case." But, she said, it's far from clear that a civil offense like inducement can actually give rise to criminal liability.

"This has never been decided by any court," she wrote, but the pending Rojadirecta case raises just this issue. The government's seizure of rojadirecta.com was a criminal matter, but the charges against Rojadirecta focus on links to infringing content, which would be secondary—and therefore civil—infringement.

Rojadirecta's lawyers "argue that judge-made secondary infringement liability theories, including Grokster-style inducement, cannot be the basis for a criminal copyright violation because the criminal copyright statute doesn't mention secondary liability," Granick wrote. "Due process doesn't allow incarceration under a civil legal theory that the Supreme Court dreamed up in 2005."

She makes a similar point about the conspiracy charges facing Megaupload. Conspiracy is a criminal offense, but the government is effectively charging Megaupload's executives with conspiring to commit civil copyright infringement. Yet the conspiracy statute "makes clear that the object of the conspiracy must be an offense or fraud against the United States, in other words, a federal crime," Granick writes. A conspiracy to induce others to commit copyright infringement doesn't qualify.

"Prosecuting this case against Mega, especially if Defendants get good criminal lawyers who also understand copyright law, is going to be an uphill battle for the government," she concluded.

"The defendants look really guilty"

Is she right? We asked Derek Bambauer, a noted legal scholar at Brooklyn Law School, for a second opinion.

Bambauer largely agreed with Granick on the merits; subjecting Megaupload to criminal penalties for committing offenses under judge-made civil law would be a troubling step. But Bambauer wasn't convinced that Granick's arguments will save Kim Dotcom.

For starters, under the 1997 No Electronic Theft (NET) Act, direct infringements alone (for example, casual file-swapping by individual Megaupload employees) could get the defendants five to ten years in prison. He noted that in principle, ordinary users sharing infringing works on BitTorrent face similar penalties; the federal government just doesn't invoke these penalties very often. But when the government wants to, as in this case, it can seek multi-year jail sentences for even casual file-swapping.

That means that the Megaupload principals could wind up serving long jail sentences even if Megaupload is found completely blameless for the infringing activities of its users.

Unsurprisingly, then, Bambauer predicts the defendants will accept a plea bargain agreement rather than take the case to trial.

As for the inducement charges, Bambauer suggests one way the government could argue for applying criminal penalties: while Congress hasn't explicitly endorsed judge-made theories of secondary liability, it has jacked up the criminal penalties associated with copyright infringement since the courts began formulating secondary liability theories. The courts might rule that when Congress made more kinds of infringement subject to criminal penalties in 1997, they were implicitly including secondary infringements among the offenses eligible for those penalties.

Bambauer notes that Kim Dotcom and his associates are not sympathetic defendants. "In theory, they should be interpreting this carefully, but the defendants look really guilty," he said. "They look like they are running a criminal enterprise. There are all sorts of emails showing them trying to skirt the law." So, he predicted, the courts might well be strongly motivated to find a legal theory that allows them to put Kim Dotcom and company in jail.