Megaupload Dismisses Suit Against Universal Music

As the dust from last week’s Department of Justice strike against the popular filesharing site Megaupload begins to settle, the longterm picture regarding file-swapping sites in general — and the fate of Megaupload users’ files in particular — remains hazy. But at least one thing is clear: Universal Music Group no longer has to worry about fending off a Megaupload lawsuit. For now, anyway.

Megaupload’s lawsuit against UMG — filed in the wake of UMG’s takedown of the “Megaupload Mega Song” video that featured a catchy jingle and testimonials from celebrity users such as will.i.am, Diddy, and Alicia Keys — has been dismissed without prejudice, which is a fancy way of saying the plaintiffs reserve the right to re-file the suit against the defendants at a later date. In the meantime, it looks like Megaupload’s lawyers are focusing on YouTube and its parent company, Google.

In essence, Megaupload is trying to determine the nature of the contract between UMG and YouTube that allowed the label conglomerate to have the video pulled. As company founder Kim Dotcom put it in an email to the Hollywood Reporter a few weeks ago, “the question is, is Youtube helping UMG to keep the view count a secret?”

To that end, Megaupload is also trying to make sure Google preserves relevant records in the case — all while battling the criminal charges brought by the Department of Justice during last week’s raid on company headquarters. It’s all more than a little surreal, but the case has a number of profound implications for the future of filesharing — and in the meantime, at least one similar service has pre-emptively thrown in the towel.