The Virginia federal judge overseeing the Megaupload case on Friday ordered Megaupload and the government back to the negotiating table over the fate of the locker site's servers, which has been a subject of dispute in recent weeks. CNet reports that Judge Liam O'Grady declared himself "sympathetic" to the financial burdens that Carpathia Hosting, Megaupload's former ISP, was incurring as a result of the Megaupload litigation, and "seemed dismissive" of the government's objections to letting Megaupload have its data.

Ira Rothken, MegaUpload's lead attorney, asked U.S. District Judge Liam O'Grady to send all the parties interested in the data back to the negotiating table to continue looking for a solution they can agree on. And that's exactly what O'Grady told them to do. What's most important about the judge's decision was that the user data will continue to be preserved. O'Grady told the parties that unless they wanted to hire their own "special master" to help mediate the talks, then he would send them to a magistrate judge known for his abilities to "bring people together" and hash out agreements.

The exchange also hinted at why the government has shown so little sympathy for Carpathia's plight. The government pointed out to the judge that Carpathia had "generated $35 million from working with Megaupload," and implied that the hosting company bears some responsibility for Megaupload's actions.

The Electronic Frontier Foundation urged the judge to establish a system to allow Megaupload users to retrieve their legal data. But the judge expressed skepticism that it would be feasible to set up and operate such a system given the large amount of data involved.