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Court Affirms Piracy Verdict Against Cox Communications

A federal district court in Virginia has upheld a December jury verdict that found Cox Communications liable for subscriber copyright infringement, and the company will have to pay $25 million in damages to BMG Rights Management.

August 24, 2016

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A federal district court in Virginia has upheld a December jury verdict that found Cox Communications liable for subscriber copyright infringement, and the company will have to pay $25 million in damages to BMG Rights Management.

Cox had an Acceptable Use Policy for customers that spelled out its prohibition of copyright infringement, and used a group of employees referred to as the Abuse Group to handle Digital Millennium Copyright Act (DMCA) claims from copyright holders. Subscribers who were repeat infringers were sent multiple warnings, which amounted to a “thirteen-strike policy,” before they were suspended permanently. Cox had argued during the trial that it was within safe harbor under section 512 of the DMCA, which limits infringement liability for “transitory digital network communications.”

For Cox to be within safe harbor, though, it had to have “adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.” However, alongside policies that allowed customers suspected of infringement to continue using Cox’s services without any repercussions, the jury saw evidence that if a customer was suspended for multiple acts of infringement and eventually reactivated, all prior violations were wiped away. Cox was also summarily deleting takedown notices from Rightscorp, the company that was helping BMG monitor its copyrights.

Cox filed several post-trial motions and the court denied all of them in this ruling, affirming the jury’s verdict and finding that there was sufficient evidence for the jury to reasonably conclude that Cox customers had committed direct infringement, that Cox had deliberately ignored it, and that when the company had been made aware of subscriber infringement it acted with reckless or deliberate disregard.

Will Internet service providers (ISPs) now have to be much more vigilant when it comes to copyright infringement by subscribers, in order to maintain safe harbor eligibility? In light of this decision, if they become aware of infringement by subscribers, most likely yes. If sued, they will probably have to show that DMCA notices were examined properly, and that there was strict enforcement of their policies for suspected repeated infringers.

But how much enforcement will be enough for an anti-infringement policy to be considered “reasonably implemented” for safe harbor? Anything more than what Cox did? How will ISPs be able to balance growing their customer bases and having to terminate subscriptions to keep safe harbor?

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We recently discussed that ISP Windstream initiated a declaratory judgment in June against Rightscorp. Windstream is arguing that it qualifies for safe harbor because it is a “mere conduit for the transmission of internet services” and has no awareness or control over copyright violations. This will be a really important case to watch now following the Cox ruling.

For more information on the DMCA, keep reading our blog.