"Those internal communication mean nothing"

In prosecuting copyright cases, internal communications mean everything. I'm not speaking in the abstract here; incriminating emails were instrumental in the Napster case and some other major copyright cases, going back to the BBS days. It's an all-too-common pattern: publicly, the company claims that it doesn't know that copyrighted information is being shared in an unauthorized manner; their internal emails reveal that they do know this; plausible deniability is destroyed; game over.

This is central to the concepts of contributory infringement and vicarious infringement. The former is when you know infringement is happening but you do nothing to stop it; the latter is when you're ignoring it because there's a financial incentive to do so.

"The point being, is that just because something seems to be illegal - doesn't mean it is, you/we have NO idea if the customer in question has some kind of weird contract with the copyright holder and if they are in violation of it or not - THAT is up to a judge and/or contract attorney to decide, no one else."

Agreed, compliance can be a hassle, and the more customers and activity you have, the bigger your exposure, which is why ISPs, file lockers, Torrent sites and the like must have sufficient staff for compliance with copyright laws, just as they require sufficient staff to ensure compliance with other laws (everything from Sarbanes Oxley to workplace safety). From reading your situation, it's clear that your ISP is one of the "good guys." However, it's not analogous to MU. It wasn't an issue of not being properly staffed to handle takedown requests, or even legitimate concerns that the requests were bogus -- it was deliberately ignoring the requests because their business model required it.

"What is "reasonable"?"

"reasonable person" is a legal construct. Wikipedia explains it pretty well:

http://en.wikipedia.org/wiki/Reasonable_person

"Why? What if it's a bogus DMCA takedown request?"

You've read the indictment, right? It's not even an issue of thinking the takedown requests are bogus (ie. somebody's forging an email from Fox to issue a takedown on Avatar). They ignored takedown requests that they knew to be legitimate on hugely popular files (ie. the latest scene releases) because they were making tons of money. Kim's instructions to his team were to ignore all takedown requests except from the major media companies in the US -- ie. the ones that would actually do something about it if the requests were ignored. They knew exactly what they were doing.

"How can anyone know that account which uploaded the video does not actually hold copyright on it? Yes, question sounds silly, but it is extremely complex. Unless someone else claims the copyright ownership, you can only assume that whoever uploaded it is the copyright owner."

You nailed it with "silly." The courts tend to have a lower threshold for silliness than many people understand. If even the proponent of an argument acknowledges that it's silly, it won't pass the laugh test in court.

You see, the justice system has a very low tolerance for bad actors. If the facts are these:

1. User "DeEzNuTs" uploads a screener rip of Avatar.
2. 20th Century Fox sends you a DMCA takedown request.
3. You purposely delete all but one link to the file, so that it stays in the system -- in other words, you don't honor the takedown request.

A reasonable person would understand that "DeEzNuTs" is not the copyright holder for Avatar, and that the film company's distribution strategy does not include posting screener rips to sites known for piracy. Likewise, if MU's defense is that, gosh, they had no idea that DeEzNuTs wasn't actually the copyright holder, they'll be laughed at.

"Yes, of course they were aware about piracy on the site, but what can you realistically do about that except taking down files when they appear in DMCA notice?"

Again, you've nailed it. Respond to copyright claims in good faith, and you're in that safe harbor. That's why it's called a safe harbor. That's why the DMCA hasn't brought down the Internet: the laws are easy to follow. It's nigh on impossible to run a successful service that (a) actively induces piracy and (b) follows the law; each time a Torrent site operator claims that they're "just like a search engine".... they're not. If you avoid the DMCA safe harbor provisions, you're not just like a search engine.

MU ignored the safe harbor previsions, because it would have interfered with the successful execution of their business model.

"There are so many things that need to be properly tested in court, this will certainly be a massive one."

This is all pretty basic stuff. These were all tested in the Grokster decision, the Napster decision, and lots of other P2P-related decisions. Some of this stuff goes back more than a decade.

if the model is basically "we pay if your file is popular", but there is no checking of the actual file, whether the user has actual rights to the file or not, or encouragement of piracy specifically, all that's left is accusing MegaUpload of encouraging popular files.

Note the IF. What you describe is not how MegaUpload operates. If the indictments are to be believed, the operators were caught numerous times encouraging the sharing of content that they knew to be pirated.

You're correct that a truly content-agnostic file storage and sharing site should have nothing to fear. DropBox is safe. The operators of MegaUpload, however, serve as a textbook example of purposely avoiding all the safe harbor opportunities. This isn't because they were stupid -- far from it -- but because this is their very business model.

The legal concept of mens rea -- latin for "guilty mind" -- applies here. The MegaUpload guys, through their actions, have been nailed fair and square. This is their choice. They took the lucrative, but risky, path, of actively courting piracy. Their business model is wholly different than that of DropBox.

The amorphous "they" is actually two sets of organizations, who are often at odds with each other.

Record labels, of course, make money by selling recordings. They spend money to promote music with the express goal of driving sales.

BMI and ASCAP are performance-rights societies run by and for artists. They are part of the music industry, but not the recording industry. It is BMI and ASCAP who collect these royalties from radio stations. While most of the money goes to the artists who are played the most, distribution is equitable, and a reasonably successful artist (that is, not a superstar) can often still make a couple of hundred bucks a months from performance rights. This is money that the record labels don't see, unless the artist has signed with a publisher that happens to be owned by a record label (Warner/Chappell comes to mind).

Since BMI and ASCAP are run by and for artists, they are generally considered to be the "good guys," as they offer opportunities for artists to make money that's not dependent on music sales or even having a recording contract. The exception is when we hear a story of BMI/ASCAP actually attempting to collect this money -- like coming down on a business that refuses to purchase a BMI or ASCAP license. Then -- at least per popular opinion here on Slashdot, they tend to be thought of as bad guys, like the record companies.

"Unless you are a major corporation and have a contract with Microsoft the only support you get is reinstall-reinstall-reinstall, with Open Source you get to contact the developers directly ..."

And like that poor woman who wrote to Squirrelmail developer Steve Brown found out, it's liable to get your email published along with open calls for your harrassment.

By the developer.

Because you were a novice user who had the audacity to contact a developer, because that was the only email address you could find.

Other FOSS developers supported his behavior because "the act of contacting the developer is a pretty big no-no."

You're correct out of context, but it's essential to understand that this *is* about partisanship.

Utah is simply taking a tactic from the Texas School Board; they were taken over by the religious right a few years back and have been dramatically reworking the curriculum to fit the right wing political and social agenda. The list of horrifies is long, but includes de-emphasizing Thomas Jefferson (because he strongly pushed for separation of church and state), as well as several non-white contributors to American history. Texas schoolchildren are now specifically required to be told that the term "separation of church and state" is not in the Constitution, to evaluate whether the United Nations undermines US sovereignty, and -- yes -- that the US is most definitely a "republic" and not a "democracy."

While this disgusted educators nationwide, many in Utah are applauding the new Texas curriculum:

http://www.utahsrepublic.org/standards/texas-vs-utah-elementary-history-standards/

The byline for that site is a quote from the Constutition that reads "The United States shall guarantee to every State in this Union a Republican form of Government..."

No problem if you're happy with your $500 PC, but he's not referring to you -- he's referring to the "$2500 overclocked gaming monster" crowd on the high end, on the opposite side of the $300 Wal-Mart buyers. He is defining the boundaries.

You're correct that there's certainly a huge market for $500 PCs, and you're also correct that $500 PCs can play the majority game with adequate performance just fine.

The "$2500 overclocking gaming monster" crowd will easily spend $500 on their rig just on the case and the cooling alone.

And it's those people who can't fall into the "I pirate because I can't afford it" group. "I spent all of my money on my hardware, how do you expect me to actually pay for software?" is weak sauce.

"I would definitely want to know how they determined this... I could be making a legal backup copy to the cloud by using BitTorrent..."

That's another one of those imaginary loopholes; that is, one which pirates think will get them out of hot water, but in reality, aren't very effective. Sadly, if you opt to "back up" your legally acquired copy of PhotoShop or the latest album you bought by seeding it, it's still unauthorized distribution, no matter what your intent is. Making backups generally stays on the right side of the law only if you don't distribute those backups.

"on a more serious side... "manually verified"? wtf does that mean? how can they possibly know whether the person/organisation/computer seeding or leeching the file has a propere license to do so? I'm pretty sure that they wouldn't have such information so are they assuming that everything that wasn't in public domain or free was actually infringing?"

No; I think the article is clear that they looked up the content to see if it was infringing. It's pretty straightforward -- you can determine pretty quickly that Adobe hasn't released the full version of PhotoShop as freeware; nor is the new Rick Ross album being distributed in its entirety for free by the record label. If it's software, a game, an album, or some other media you haven't heard of, then you look it up -- as the article stated -- to learn what the distribution model is. A little common sense and a little Google go a long way. If you're still not sure what I mean, think about how you would undergo such a task, and then it's a safe bet that the researchers are just as smart as you, and did something similar.

Of course, even a smart person like you or I might misidentify the distribution rights of a file here and there, but the margin of error is likely pretty low. With a ratio of 99.7 to 0.3, a small error in either direction won't fundamentally change the conclusion.