A judge in the United States will hear a motion to dismiss copyright infringement charges against Megaupload.
The judge in Virginia granted the request by Megaupload's counsel to hear a motion to dismiss the case. He set a briefing schedule that will be completed by July 18 with oral argument occurring shortly thereafter.
The court found the request to unfreeze funds to pay defense attorneys' fees to be premature and invited such a motion if the Motion to Dismiss Megaupload is not granted.
The judge said he is considering a hearing to determine whether the US Department of Justice acted improperly in blocking Megaupload customers' access to their files when company assets were seized in January.
Dotcom is fighting extradition from New Zealand to face the charges in the United States and an extradition hearing is scheduled for August 6.
A guilty verdict could mean up to 20 years behind bars for
Dotcom and the other defendants.
Meanwhile, lawyers for Dotcom are considering seeking compensation after an illegal police raid on his Auckland mansion.
On Thursday, a High Court judge ruled the search warrants used to confiscate hard drive data and other personal items from the internet tycoon's Coatesville home in January were invalid.
Dotcom's lawyer Ira Rothken told ONE News he has not ruled out seeking compensation from the New Zealand Government in a move that could potentially cost the taxpayer thousands of dollars.
"It looks like there was too much deference paid to the USA. It looks like there was not enough independent scrutiny of search warrants, and an oversight of the police," said Rothken.
During the initial search of Dotcom's rented mansion, police took dozens of items including anything that could store digital data, meaning home videos, CCTV footage and data from the swimming pool heating system were seized.
The German national was arrested in the raid and stands accused of breaching copyright laws costing owners more than $US500 million.