IP Law Daily Jury hits Internet service provider Cox for $1B for users’ music piracy
Friday, December 20, 2019

Jury hits Internet service provider Cox for $1B for users’ music piracy

By Thomas Long, J.D.

Cox found liable for willful contributory and vicarious infringement of over 10,000 copyrighted works that were infringed by subscribers via file-sharing software over Cox’s network.

A jury in sitting in the federal district court in Alexandria, Virginia, has determined that Internet service provider providers Cox Communications, Inc., and CoxCom, LLC (together, "Cox") are liable for $1 billion in damages for its role in subscribers’ unlawful digital file-sharing of over 10,000 musical compositions and recordings owned or managed by several complaining music publishers, including Sony, EMI, Warner, and UMG. The jury found that Cox was both contributorily and vicariously liable for its users’ infringement, and further found that Cox’s conduct was "willful," warranting an increase in the damages awarded to a possible maximum of $150,000 per infringed work. The jury awarded $99,830.29 for each of 10,017 works, reaching the round figure of $1 billion as a total damages award (Sony Music Entertainment v. Cox Communications, Inc., December 20, 2019).

Fifty-three members of the recording industry filed suit against Cox in July 2018, seeking damages for copyright infringement in connection with unauthorized downloading and distribution of files via peer-to-peer file-sharing software over Cox’s network. The plaintiffs asserted claims for contributory and vicarious infringement against Cox based on alleged acts of direct infringement by Cox’s Internet subscribers.

Last month, the district court largely granted the plaintiffs’ motions for summary judgment on the issues of copyright ownership and Cox’s knowledge of its users’ unlawful peer-to-peer file-sharing activity. Registration certificates, documents detailing ownership transfers and licenses, and testimonial evidence established that there was no factual question as to the plaintiffs’ ownership of the works at issue, although the court ruled that the plaintiffs could not go forward with claims regarding 78 works that were not registered until after the period of alleged infringement. Additionally, the court determined that Cox could be liable for its users’ conduct, based on thousands of infringement notices sent to Cox on behalf of the plaintiffs by anti-piracy company MarkMonitor. These notices contained specific details regarding the direct infringers, and Cox had the ability to take action in response to them, the court determined.

"Knowledge." A hotly contested issue in the case was what constituted "knowledge" in the context of contributory copyright infringement, and whether the infringement notices Cox received from MarkMonitor were sufficient to convey that knowledge. The court noted that in a Fourth Circuit decision involving prior litigation between Cox and BMG Rights Management (US) LLC, involving similar factual allegations and legal claims, that court held that contributory liability can be based on willful blindness, but not on recklessness or negligence. "Generalized knowledge" of infringement on an Internet service provider’s network was not enough to establish contributory infringement liability. The proper standard required a defendant to have specific enough knowledge of infringement that the defendant could do something about it. In the BMG case, the Fourth Circuit held that Cox was not entitled to assert the protection of the Digital Millennium Copyright Act (DMCA) "safe harbor" because Cox’s policy and practices for dealing with infringing subscribers were not reasonable. However, the appellate court vacated a jury verdict finding Cox liable for willful contributory copyright infringement, and awards of $25 million in statutory damages and $8.3 million in attorney fees, because the jury was not properly instructed on the correct mental state required for contributory liability. That case later settled for an undisclosed amount.

In this case, MarkMonitor’s infringement notices included the information required for a "takedown" notice under the Digital Millennium Copyright Act, such as a timestamp of the detected activity, the date the notice was sent, the Cox user’s IP address, and a hash value pertaining to the file associated with the copyrighted work allegedly shared. This level of detail gave Cox more than "generalized knowledge" of infringement, in the court’s view. Furthermore, Cox had maintained the ability to suspend or terminate infringing accounts. "It would be farcical to argue that Cox had no knowledge of the hundreds of thousands of notices it received indicating infringement for the works in suit," the court said. "The notices were sent to an email address Cox created for the very purpose of receiving this information, and were processed by a corporate department dedicated to abuse and security for Cox."

Cox’s response. In a response posted on its website, Cox said, "The verdict is unwarranted, unjust and an egregious amount. Today, you can download a song for a dollar. This verdict is for nearly $100,000 per song. We plan to appeal the case and vigorously defend ourselves. We provide customers with a powerful tool that connects to a world full of content and information. Unfortunately, some customers have chosen to use that connection for wrongful activity. We don’t condone it, we educate on it and we do our best to help curb it, but we shouldn’t be held responsible for the bad actions of others."

This case is No. 1:18-cv-950.

Attorneys: Scott Alexander Zebrak (Oppenheim & Zebrak LLP) for Sony Music Entertainment. Thomas M. Buchanan (Winston & Strawn LLP) for Cox Communications, Inc.

Companies: Sony Music Entertainment; Cox Communications, Inc.

MainStory: TopStory Copyright TechnologyInternet VirginiaNews

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