Earlier this week District Court Judge Liam O’Grady denied Megaupload's request to drop the company from the indictment. The judge, however, noted that the cyberlocker could ask for a temporary dismissal until it is decided whether the U.S. Government can serve Megaupload. This ruling surprised Kim Dotcom and his legal team, who quickly filed a new motion pointing out that they already made this request during a hearing in July.

On Tuesday, Megaupload’s request to have the criminal charges against it dropped on the grounds that the U.S. Government failed to serve the company, was denied.

District Court Judge Liam O’Grady believes that the authorities could still satisfy the serving requirement if they can prove that Megaupload is an alter ego of Kim Dotcom.

While the motion to dismiss the case for lack of jurisdiction was denied, the judge’s order did leave an option open to dismiss the case temporarily, until Megaupload is properly served.

This suggestion baffled Dotcom and his lawyers, who expressly requested such a temporary dismissal during a hearing in July.

Kim’s surprised

Megaupload’s legal team jumped on the issue and a day later they have filed a renewed request to dismiss the indictment, pointing out the apparent mistake made by Judge O’Grady.

“Megaupload respectfully submits that at oral argument on the motion to dismiss it requested, as an alternative remedy, dismissal without prejudice pending extradition,” they write.

In the supporting memorandum of law Megaupload’s lawyers quote directly from the transcript of the July hearing, where they suggested a temporary dismissal as an option.

“We do think that the alternative would be dismissal without prejudice, allow the Government at the appropriate time to then supercede the indictment again, add the corporation into the indictment.”

“But, in the meantime, having the company subject to the incredible burden of a criminal prosecution with no ability to defend itself and no service is an extraordinary result and one that is unprecedented.”

Dotcom’s legal team reiterates that Megaupload’s due process is at stake. The company has already been destroyed and is being held ransom by the U.S. Government, without any funds to establish a proper defense.

“Before this Court is a corporation that has been criminally indicted, has had its website seized, has had its business destroyed, has had all of its assets criminally frozen, and then been left in an indefinite, ongoing state of criminal limbo, all without the Government complying with Rule 4, attempting to comply with Rule 4, or identifying any prospect that it might comply with Rule 4 any time in the foreseeable future.”

“This combination of circumstances seems inimical to due process, especially considering that the rights of a criminal defendant are at stake,” the lawyers add.

With the renewed motion to dismiss, Megaupload hopes to have the criminal charges against it dropped, at least until the U.S. Government finds a way to serve the company. This may take weeks, months, or may not happen at all.

It is now up to Judge O’Grady to rule on this renewed request, which may come as quite an embarrassment in such a high profile case.

Meanwhile, Kim Dotcom is preparing the comeback of Megaupload, which he says will be bigger and better than its predecessor.