Negotiations over Megaupload data to start this week

An outstanding issue is the lack of a criminal summons to Hong Kong-based Megaupload Limited

Negotiations over how to preserve 28 petabytes of data from Megaupload are set to begin on Thursday, according to the file-sharing site's attorney.

Megaupload and U.S. government lawyers will meet with a U.S. magistrate in Virginia to work on a resolution, said Ira P. Rothken on Monday. If that fails, it will go back to a federal court judge for a decision.

The website was shut down Jan. 19 after criminal copyright infringement charges were filed against two companies and seven individuals, including founder Kim Dotcom. Carpathia Hosting, which supplied most of the hosting for Megaupload, would like to be paid to continue holding the data, which it claims costs $9,000 a day.

Megaupload has sought funds to be released from frozen bank accounts to pay for preserving data. It had reached an agreement with Carpathia to buy the servers for around $1 million, payable after a criminal trial, but the U.S. government opposed it.

The digital rights group Electronic Frontier Foundation (EFF) has filed a brief with the court on behalf of users who weren't infringing copyright and lost access to their data when it was shutdown. The EFF has asked the court for a procedure to assist innocent people to recover their files.

Another issue is also looming before the court, Rothken said. Megaupload Limited, which is named as a defendant in the indictment, was never served a criminal summons, which would be required before a company can be brought to court, Rothken said.

Under U.S. law, criminal summons can be served to individuals who are outside the U.S., but not to companies, Rothken said. Megaupload is based in Hong Kong, not the U.S., Rothken said. A brief has been filed with court, he said.

The issue came up briefly during a hearing on April 13, when Judge Liam O'Grady ordered the parties to mediation. O'Grady said the summons issue will required a "further hearing."

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