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A New Zealand court on Wednesday ruled that the search warrant used in the arrest of Megaupload founder Kim Dotcom on U.S. online piracy charges was legal, dealing a blow to the internet entrepreneur who is fighting extradition to the United States. The decision will benefit U.S. prosecutors who say the Megaupload website cost film studios and record companies more than $500 million and generated more than $175 million in criminal proceeds by letting users store and share copyrighted material, such as movies and TV shows. If Dotcom is extradited, the ensuing copyright case could set a precedent for internet liability laws and, should he win, could force entertainment companies to rethink online distribution methods. Wednesdays ruling overturned an earlier High Court decision that the search warrants were vague and enabled police to seize materials irrelevant to the charges against Dotcom.