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Cox Communications begins process of appealing “shockingly excessive and unlawfully punitive” billion dollar damages bill

By | Published on Monday 3 February 2020

Cox Communications

Cox Communications went to the district court in Virginia on Friday to formally begin the process of appealing last year’s billion dollar ruling in which the record companies successfully argued that the US internet service provider should be held liable for its users’ copyright infringement.

In legal papers filed with the court that oversaw the original case, the ISP argues that liability wasn’t proven, that statutory damages were miscalculated and that the total damages figure is “shockingly excessive and unlawfully punitive”.

The major labels sued Cox after BMG successfully argued in court that the ISP had deliberately shoddy systems for dealing with infringement and infringers on its networks, and therefore shouldn’t enjoy protection under the copyright safe harbour. Which means that the net firm can be held liable for the infringement of its customers.

The majors also prevailed in their Cox lawsuit by presenting more or less the same arguments as BMG had in the earlier case.

In December, a jury ruled that Cox should not get safe harbour protection, and should therefore be held liable for contributory and vicarious copyright infringement. The jury then awarded the major labels statutory damages of $99,830.29 for each of the 10,017 copyright works listed in the lawsuit, which comes to a billion dollars.

In its new legal papers last week, Cox urged the judge to intervene in various ways in relation to last year’s ruling. Among other things, it argues that the labels failed to present enough evidence to prove liability for either vicarious or contributory infringement, urging the judge to make a judgement as a matter of law on that point. Though that’s a request the ISP also made during the court hearing in December, and the judge declined.

Elsewhere it takes issue with the way statutory damages were calculated. Under US law, a court can pick a damages figure anywhere up to $150,000 – oblivious of the actual financial harm caused by the infringement – and then multiply that by the number of works infringed. But that rule was incorrectly implemented by the jury in this case, Cox argues, in part because, it reckons, albums should be treated as a single work, rather than each track on the album being counted separately.

Even if the judge doesn’t want to intervene on those specific points, he should nevertheless slash the total damages bill, Cox claims. The judge has the power to do that via a process called ‘remittitur’, and judges have exercised that power before in copyright cases where juries have got carried away in how many zeroes they place on the total damages bill. And, Cox adds, never before has a copyright case jury been quite so excessive in its use of zeroes.

Having done some maths, Cox writes: “The award of $1 billion appears to be the largest award of statutory copyright damages in history. This is not by a matter of degree. It is the largest such award by a factor of eight. It is the largest such award for secondary copyright infringement by a factor of 40. It is the largest jury verdict in the history of this district by a factor of more than 30. It is by any measure a shocking verdict, wholly divorced from any possible injury to plaintiffs, any benefit to Cox, or any conceivable deterrent purpose”.

Allowing the billion dollar figure to stand would be a “shocking miscarriage of justice”, Cox then argues, adding that the jury didn’t properly follow the judge’s instructions when calculating damages. Cox’s legal filing states: “Because the extraordinary $1 billion verdict cannot be supported by the factors the jury was instructed to consider or the evidence informing those factors, Cox is entitled to a substantial remittitur”.

If the judge doesn’t wish to meddle with either the jury’s conclusions or their damages sums, then – Cox finally states – he should instigate a retrial.

It remains to be seen how the judge responds. If he knocks back all of the requests Cox made last week, the ISP could then take the matter to the appeals court. Meanwhile, the majors are also pursuing similar lawsuits against three other American ISPs, all of whom will be hoping that Cox has some success as it navigates the various routes of appeal. The labels’ legal battle with Grande Communications is due in court later this month.