To be fair, Megaupload didn't explicitly condone copyright infringement, and if I recall correctly infringing files were removed.

Are my memories flawed and Megaupload ignored the copyright infringement notices, or is Megaupload the fall guy to scare everyone else?

When Megaupload received notification of an illegal file, their action depended on the type of file. If it was child porn or terrorism propaganda, they deleted the file. If it was copyright infringement, they made the specific URL that was reported stop working, but retained the file, and all other links that referred to that file continued to work.

Even making the specific URLs stop working was a sore spot with Dotcom. He sent emails to employees telling them to not even do that when they got a mass report of infringement from an "insignificant source". An "insignificant source" meant anyone other than a major organization in the US (e.g., major Hollywood studios).

As far as explicitly condoning copyright infringement goes, sometimes users would see movie trailers, and ask Mega where they can see the full movie online, and Mega employees would answer by pointing them to third party sites that linked to the full movies on Mega. One Mega email to such a user included the explanation that you cannot find the links by directly searching Mega because "that would cause us a lot of trouble".

Megaupload also ran a monetary incentive scheme that ranked rewards for users based on the value of the content; discovery during the prosecution turned up emails from Megaupload employees overtly acknowledging copyrighted content and rewarding it with enhanced payouts.

To be fair, Megaupload used deduplication pretty extensively. So to remove the file would be to remove it from every single user whether they shared the URL or not. Any number of those users could have the right to a copy of the file in question or live in a country where copyright law just plain doesn't apply to sharing files (e.g. somewhere it's OK as long as it's down without commercial gain).

Removing just the link to the file seems reasonable to me. How do you choose which country to break the law? Removing just the link seems like the safest bet.

I've never done a copyright case in my life and intend to keep it that way but Mega had a rewards program where you got money for uploading content that people downloaded. A bounty program for fresh, new, just-released-at-the-box-office movies. Let's not rose tint the past. They had internal emails discussing how to get more movies closer to the release dates. It was pretty blatant. The compliance with take-down didn't even remove things from the server, just the link the copyright owner noticed..

Maybe I should call the copyright owner something else that fits HN, induces more sympathy... Intellectual Property Doyen? Post Marketing Profit Retrieval Specialist? VP of Marketshare and Ongoing Growth? Capital Return Scout? Nah can't keep a straight face, "Dude with the Creatives on a leash"

People at Megaupload were uploading copyrighted things onto their servers at one point to gain traction. Like, company policy to go around and get stuff to put onto their servers.

If you follow takedown notices, there's no issue, DMCA's safe harbor provisions protect you totally. The issue was that Megaupload was participating in the uploading and stuff

(for the record: not condoning the federal gov't's usage of time/money trying to get Dotcom arrested/extradited or whatever)