The AP reports that the founder of Megaupload has started a new file sharing venture. Apparently, the new venture allows users to upload large files for downloading by others. The new service also apparently includes encryption that prevents the service from knowing what has been uploaded. This is supposed to shield the new venture from liability. However, given the possibility of applying Grokster-type inducement, I’m not sure it will work out as the service hopes.
Perhaps the most interesting thing about this story is the apparent inability of criminal prosecution to deter services from facilitating copyright infringement. Throughout the “war” on Internet copyright infringement, the assumption has been that powerful penalties will deter people from infringing. In this case, however, Megaupload’s founder is facing extradition to the U.S. to face prosecution, yet he has pretty much come right back for another go. Makes me think that now, more than ever, security for digital works will always be evanescent, at best.