Major movie studios sue Megaupload
Six of the biggest movie studios have sued Megaupload and its key operators, including founder Kim Dotcom.
They have alleged the site and its operators "facilitated, encouraged, and profited" from copyright infringement.
Megaupload was one of the largest file-sharing sites before it was shut by US regulators in 2012 who have accused it of costing copyright holders more than $500m (£320m) in lost revenue.
Mr Dotcom has denied those charges, saying the site was a storage service.
In a statement, Steven Fabrizio, global general counsel of the Motion Picture Association of America (MPAA), said: "When Megaupload.com was shut down in 2012 by US law enforcement, it was by all estimates the largest and most active infringing website targeting creative content in the world."
The MPAA alleged that Megaupload used to pay users for uploading popular content and as a result was not a storage service.
"Megaupload was built on an incentive system that rewarded users for uploading the most popular content to the site, which was almost always stolen movies, TV shows and other commercial entertainment content," said Mr Fabrizio.
"It paid users based on how many times the content was downloaded by others - and didn't pay at all until that infringing content was downloaded 10,000 times.
"Megaupload wasn't a cloud storage service at all, it was an unlawful hub for mass distribution," he added.
However, Mr Dotcom rejected those claims. He tweeted that files bigger than 100MB in size "did not earn rewards".
"Hollywood claims that we were paying users to upload pirated movies. Stupid."
Mr Dotcom has fought a long-running legal battle over the case in New Zealand where he lives.
He is fighting extradition to the US over charges of copyright infringement on a "massive scale".
Megaupload had about 150 million registered users before it was shut down. At one point it was estimated to be the 13th most frequently visited website.
In January 2013, a year after the closure of MegaUpload, Mr Dotcom set up Mega, which also allows users to host and share large files on the internet.