As a direct result of the Megaupload raid many legitimate users of the site lost access to their personal files. To find out why the Government put the interests of copyright holders before those of the public, one user convinced the court to unseal the seizure warrant matarials. Surprisingly, however, there is absolutely no mention of Megaupload's legal use in the released records. In a response Megaupload founder Kim Dotcom says the whole case is a tragic copyright comedy.

In the wake of the January shutdown of Megaupload, many of the site’s legitimate users complained that their personal files had been lost.

Among these users are many people in the U.S. military who used the site to share pictures and videos with family. TorrentFreak learned that least 15,634 soldiers had accounts at Megaupload, between them sharing hundreds of thousands of files.

One of the users, entrepreneur Kyle Goodwin, asked the court to return his files. As part of this request his attorneys filed a motion to unseal the Megaupload search warrants so they can see on what grounds the data was taken.

This week Judge O’Grady granted the request and ordered the release of the warrants and their applications, albeit redacted. This means we can now see how the U.S. put forward its request to seize the domains and servers.

The search warrant applications don’t offer any new facts and mostly recite what has already been written in the indictment. The Government describes Megaupload as nothing more than a place where copyright infringing files are stored, and this is what the judge signed off on.

However, what is striking is that none of the released records even mention the legitimate use of the site. In other words, the rights of Megaupload’s legitimate users were never taken into consideration.

Speaking with TorrentFreak, Kim Dotcom shares our surprise, noting that nearly half of all files stored on Megaupload were never downloaded.

“The legitimate use was completely ignored in the seizure warrant applications. Almost 50% of files stored on Megaupload didn’t have a single download. There was massive non-infringing use by those who just wanted to store data in the cloud,” Dotcom says.

The lack of discussion about the many legitimate users of Megaupload is concerning.

Several of the allegations made against Megaupload could easily apply to other hosting and video services. The FBI, for example, explains in detail how their undercover agent was able to upload, view and download copyrighted videos, something that’s also quite common on YouTube.

More direct allegations against Megaupload are misleading according to Dotcom. For example, that the Megaupload team failed to delete infringing files that were pointed out in a criminal search warrant back in 2010.

“A member of the Mega Conspiracy informed several of his co-conspirators at that time that he located the named files using internal searches of the Mega Conspiracy’s systems. As of November, 18 2011, thirty-six or the thirty-nine infringing copies of the copyrighted motion pictures were still being stored on servers controlled by the Mega Conspiracy,” the DoJ writes.

However, Dotcom now explains that they didn’t touch the files because they were never asked to do so, and didn’t want to interfere with evidence in a criminal case. A document seen by TorrentFreak backs this up.

“The FBI asked us for uploader information regarding 39 files and told us to keep their investigation confidential. We assisted and obviously didn’t touch the uploader accounts or files because of the ongoing investigation,” Dotcom tells us.

“To use this against us and to tell a Judge that the Megaupload domain seizure is justified because we have not removed those 39 files is totally unethical and misleading,” he adds.

In another section the DoJ points out that Megaupload only deleted links to files when they received DMCA-notices, not the actual files themselves.

“Copyright holders were led to believe that the Mega Conspiracy’s systems would then remove, or disable access to, the infringing content. In practice, however, only the specific URL links identified in the notices were disabled,” the seizure application reads.

What isn’t mentioned is that this is common practice. YouTube doesn’t delete all the same videos either when they get a DMCA notice. After all, the file may also be hosted by the person who actually owns the rights.

Dotcom says the there are numerous other examples of weaknesses in the case, some of which we’ve discussed before.

“This case makes the DOJ look increasingly stupid and will become an embarrassment for the White House. If it wasn’t such a tragedy for our Megaupload staff and users as well as our families I would just be smiling. Brain deficiencies and lag of knowledge become increasingly obvious in DOJ court filings.”

“I can’t believe I’m in the middle of this tragic copyright comedy,” he says.

Beyond the current case, the unsealed search warrant materials will aid in the national discussion about copyright infringement related domain and data seizures. How easy should it be for the DoJ to take sites offline without due process, and what about the damage done to the public?

To be continued.