Megaupload Case News: Judge Denies Motion to Dismiss Federal Lawsuit Against Company

While a judge threw out file sharing web site Megaupload's bid to dismiss a federal lawsuit against them, the owner of the site isn't going down without a fight.

U.S. District Court Judge Liam O'Grady ruled Tuesday that the U.S. has the authority to bring copyright charges against the popular file sharing website, in spite of the company's claims that, as they are not located in America, the U.S. government had no authority over them.

Prosecutors are accusing the company, founded in 2005, of making millions of dollars in illegal proceeds from sharing pirated film, music and software files, while costing movie makers and songwriters $500 million in copyright revenue, the Associated Press reported.

The company countered, Courthouse News Service writes, that the government did not mail them a summons in accordance with Rule 4 of the Federal Rules of Civil Procedure.

In their dismissal, Megaupload argued that it was "impossible" for the government to serve the corporation by mail because Megaupload, located in Hong Kong, has no office or officers in the states.

"Service of a criminal summons on Megaupload is therefore impossible, which forecloses the government from prosecuting Megaupload," the company stated.

However, O'Grady rejected their claim.

"Rule 4 does not require a result so extreme as dismissal, and to this Court's knowledge, no court has ever dismissed an indictment for failure to meet Rule 4's secondary mailing requirement," O'Grady wrote.

As the company's founder, Kim Dotcom, is not in the U.S., federal officials are seeking to extradite him to the states, where Dotcom could serve 20 years prison time, according to Stuff.co.nz.

The web site's founder claims that he can't be held responsible for users acting illegally and that his site complied with copyrights by removing links to pirated material when asked.

However, recent tweets by Dotcom are hinting that a new site that would replace Megaupload is on the horizon.

On his Twitter page, Dotcom wrote "Just had a look at the latest version of the new Mega site. Just a few more weeks. It's absolutely..." A picture of a smiley face followed with one word: "Awesome."