The US attorney's office has dismissed claims by Megaupload founder Kim Dotcom that criminal copyright charges against him should be thrown out.
According to an article on CNET News the attorney's office said, in a paper filed to a court, that Dotcom's claims the US government had no jurisdiction over the Hong Kong-based Megaupload service were incorrect.
The US government also argued that Dotcom's request that the charges be dismissed was premature as none of the defendants have actually appeared before a court on the substantive charges.
And a request that more of Megaupload's money was returned would be like returning money to a bank robber, Neil MacBride, US Attorney for Eastern District of Virginia, told CNET News.
"The seized assets are simply not the defendants' to spend - and they never were," he said.
This comes after news yesterday that a former New York federal judge has waded into the Dotcom saga saying it is ''outrageous'' the US government is refusing to give Megaupload users back their data.
In an article on wired.com Judge Abraham David Sofaer said he was ''troubled'' that the files of 66.6 million Megaupload customers were being kept as part of the US government case against Dotcom.
"It's really quite outrageous, frankly.
''I was thinking the government hadn't learned to be discreet in its conduct in the digital world. This is a perfect example on how they are failing to apply traditional standards in the new context."
Sofaer has teamed up with the Electronic Frontier Foundation and is urging a US federal court to set up a system to allow Megaupload users to get back their legal content, the site said.
Dotcom, 38, is currently on bail in Auckland awaiting an extradition hearing. Authorities say he used Megaupload and its affiliated sites to knowingly make money from pirated movies and games, and have charged him with multiple copyright offences.
He and Mathias Ortmann, Finn Batato and Bram van der Kolk are fighting moves to extradite them to the US.
They applied to the Auckland District Court to ease bail restrictions and recently, against Crown opposition, Judge David Harvey granted the application, saying: "The initial concerns about flight risk were overstated.
"These gentlemen have displayed a willingness to abide by court orders. They have been upfront and transparent."
He also recently won the right to be given files on him collected by the FBI. At that time the court heard FBI agents secretly copied data and sent it overseas without telling New Zealand authorities or Dotcom's lawyers.
The trial of Dotcom has raised dozens of questions about the safety of content in cloud services, computerworld.co.nz editor Sarah Putt said.
Users are increasingly turning to online storage systems such as Dropbox, Gmail, YouTube, iCloud, and Google Drive, to share and store their data.
Putt said the Megaupload case was ''a concern''.
''Data sovereignty is a concern to all consumers and it reinforces the need for consumers to back up their data on to an off-site area.
''Just because you can put it in a cloud doesn't mean you can outsource your responsibility.''
Putt said Megaupload was used by many small business owners because it was relatively inexpensive and easy to use.
- Auckland Now