Retreating from a business practice that may be illegal is one thing. But even Megaupload had users who were putting the site’s abilities to legitimate purposes. This type of attack on illegal activity is also wounding lawful users through collateral damage. As a result, they may have new implications for free speech.

“I definitely think it’s a chilling effect,” said Jason Schultz, an assistant clinical professor of law at U.C. Berkeley.

He suggested the definition of that phrase — “chilling effect,” a freighted term used to imply that heavy-handed government action might unjustly intimidate people from engaging in First Amendment-protected speech — should be widened.

“I would say traditionally it’s in a First Amendment context around speech, around what you would publish, but it’s increasingly becoming relevant to the innovation context. What can you code? A lot of people consider code to be speech.

via Megaupload: Will Anti-Piracy Efforts Have a “Chilling Effect” on Innovation? | TechPresident.