Megaupload reported dropping Universal from lawsuit

January 22, 2012 | Filed under: News | Posted by: Sam Turker

Megaupload’s lawsuit opposing a takedown of a promo video may have taken an unusual turn. The company was claimed by a Hollywood Reporter source with access to the case to have dropped Universal, which orchestrated the takedown, from the suit. Only a number of unnamed people who had participated in the takedown remained.

The withdrawal was without prejudice, which in the US court system lets a plaintiff sue again if circumstances changed. Megaupload is also believed to have told the court that it still wanted “limited discovery” of the processes that led to the takedown.

Universal on having the video pulled said it hadn’t made a traditional takedown request and instead had used special access it had to pull the video, which saw a number of musicians and other celebrities promote Megaupload. YouTube later said it hadn’t given as much authority as Universal said it did, and was unhappy that Universal had abused its position to take down content that most consider legal.

The music label would later go on to try to hush news reports about the incident by using a more conventional takedown request against TWiT’s Tech News Today.

Megaupload is still described as angry at YouTube and its parent company Google for supposedly aiding Universal, such as by having incomplete documents and withholding view counts on YouTube that would help popularize the celebrity promo.

More details are expected in a hearing on Monday. The court still has to decide whether or not to take Universal out of the case.

The lawsuit may have its chances dimmed now that the company has faced site shutdowns and arrests for allegedly condoning piracy and engaging in racketeering. Universal’s view has been that Megaupload is inherently a haven for piracy and may have helped persuade the FBI and New Zealand police to orchestrate the raids that have taken the site down. A chance exists that Megaupload may want Universal out of the lawsuit to avoid its claims becoming an issue at trial.

Megaupload.com employees Bram van der Kolk, also known as Bramos, left, Finn Batato,second from left, Mathias Ortmann and founder, former CEO and current chief innovation officer of Megaupload.com Kim Dotcom (also known as Kim Schmitz and Kim Tim Jim Vestor) in New Zealand court (AP)