New Zealand's High Court ruled on Thursday that warrants used to search the home of Megaupload.com founder Kim Dotcom were invalid and the seizure of evidence, including computer hard drives, was illegal. It also ruled that the copying of the evidence by the U.S. Federal Bureau of Investigation (FBI) and sending it to the United States was also unlawful. The case is the FBI's highest profile action against global copyright theft. While the ruling did not kill the extradition case against German national Dotcom, also known as Kim Schmitz, one legal commentator said it had likely made it more difficult. His lawyers say the company simply offered online storage. The High Court said the search warrants were too vague and did not properly spell out either the offences or the evidence being sought, but has left it to a hearing next week to decide on what further steps will be taken. New Zealand police have said they are discussing their next step with prosecutors, while the FBI said it would respond in court at the appropriate time. A U.S. Federal Court will hear several motions later on Friday that the company cannot be charged with criminal behaviour because it is Hong Kong based and that no papers have ever been served formally. A public interest group, the Electronic Frontier Foundation, will also ask the U.S. court to free the private and legal data of people who stored material with Megaupload. Dotcom mocked U.S. and New Zealand authorities in a Twitter post after Thursday's court ruling, showing a computer monitor encased in police 'crime scene tape' and asking if any of his 40,000 followers had a pair of scissors.

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