Downloaders Beware: More Internet Subscribers May Lose Their Internet Service for Piracy After Ruling Against Cox Communications
Efforts to combat online piracy are nothing new. Copyright holders have long attempted to curb Internet subscribers from using peer-to-peer file-sharing networks such as BitTorrent to illegally download and share copyrighted film or music works.[1] Using federal courts, owners engage in an extensive process of identifying unknown defendant-infringers.[2] When copyrighted works are shared online, “owner[s] can track the Internet Protocol (IP) address of each user who downloads, watches, and shares” their work.[3] However, with only the infringing IP addresses, the owner does not know the exact identities of the users.[4] Instead, an owner must subpoena cable or Internet Service Providers (ISPs) to identify the infringing user.[5] Then, ISPs must notify each customer that his or her identity would be revealed to the suing copyright owner for unlawful downloading or sharing.[6]
This highlights how difficult it is for copyright owners to go after individual infringers who are unidentifiable even with the help of ISPs. Alternatively, copyright holders can hold ISPs liable under a theory of contributory copyright infringement.[7]
In November 26, 2014, two music publishing companies, BMG Rights Management LLC and Round Hill Music LP, successfully brought an action against Cox[8] BMG alleged that the ISP should be held “vicariously and contributorily liable for acts of copyright infringement by its subscribers.”[9]
Cox responded by asserting Title II of the 1998 Digital Millennium Copyright Act (“DMCA”),[10] which affords ISPs a safe harbor defense from copyright claims.[11] To fall within the safe harbor, an ISP must demonstrate that it “adopted and reasonably implemented . . . a policy that provides for the termination in appropriate circumstances of subscribers . . . who are repeat infringers.”[12] In other words, if the ISP has protocols in place and follows certain procedures to monitor clients suspected of illegally downloading copyright material, cable companies can avoid liability.
After deliberating on the issue of whether the safe harbor defense would apply, the jury found that Cox was willfully blind to the infringing activity and awarded BMG $25 million in statutory damages.[13]
On appeal, the 4th Circuit issued a mixed ruling on February 1, 2018.[14] The Appeals Court reversed the $25 million verdict against Cox and ordered a new trial because of faulty jury instructions.[15] However, the Court also affirmed the District Court’s denial of the safe harbor defense.[16] Cox may get a new trial, but this is a clear win for BMG.
What does this legal victory for the music industry against Cox mean for cable subscribers and other Internet users? Without the safe harbor protections, ISPs would be incentivized to “boot customers proactively” to avoid any contributory infringement liability.[17] Based on the 4th Circuit’s broader interpretation of the term “repeat infringers,” all subscribers—not just those who have already been subject to piracy lawsuits—who engage in culpable infringing conduct could now face a threat of losing their Internet access.[18] Furthermore, the floodgates seem to have opened to more lawsuits. Capitalizing on the BMG ruling, several other major record labels—Sony, Universal, Warner Bros. —filed a joint copyright infringement action against Cox on July 31, 2018, seeking declaratory relief and statutory damages.[mfn]Daniel Sanchez, Major Record Labels Sue Cox Communications for $1.5 Billion, Digital Music News (Aug. 3, 2018), https://www.digitalmusicnews.com/2018/08/03/record-labels-v-cox-communications/.[/footnote]
Footnotes
