Megaupload shows online copyright protection is needed

[Commentary] By most measures, the Web site Mega­upload was a 21st-century success story, with 50 million daily visitors and $175 million in profits. According to the Obama administration, it was also an “international organized crime enterprise.”

In an indictment last week, the Justice Department accused the company and several of its principals of conspiracy, racketeering and vast violations of copyright law. The loss to copyright owners of movies, television programs, entertainment software and other content: some $500 million. The government calls this the largest criminal copyright case in the nation’s history. Megaupload maintained servers in the United States and relied on U.S.-registered domain names, allowing U.S. prosecutors to tap domestic laws to shutter the business. But what if the Web site had been run using only foreign-based servers and foreign-registered domain names? U.S. law enforcers would have had a difficult if not impossible time stopping the alleged wrongdoing. That reality, of course, is what gave rise to the Protect IP Act (PIPA) and its House counterpart, the Stop Online Piracy Act (SOPA), which proposed to give the Justice Department and copyright owners the legal reach and muscle to thwart overseas theft of American intellectual property. SOPA was fatally flawed, with vague provisions that could have made legitimate Web sites vulnerable to sanctions. PIPA was more measured, allowing action against a site only if a federal judge concluded it was “dedicated to” profiting from the unauthorized peddling of others’ work.