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Judge upholds BMG’s $25 million court win against US ISP Cox

By | Published on Thursday 11 August 2016

Cox Communications

A judge has upheld last year’s court ruling that ordered American internet service provider Cox Communications to pay music rights firm BMG $25 million in damages for failing to stop piracy on its networks.

The case arguably sets important precedents regarding the often controversial safe harbours of US copyright law, and the concept of contributory infringement, both of which will be at the heart of the criminal cases against the bosses of MegaUpload and KickassTorrents, if either ever actually reach an American court room.

As previously reported, BMG accused Cox of operating a deliberately shoddy system for passing on warnings to suspected file-sharers when it received them from the music rights firm, or more specifically from its anti-piracy agent RightsCorp.

Unlike most of the other major ISPs in the US, Cox is not part of the voluntary Copyright Alert System scheme via which ISPs send warning letters to net users who rights owners suspect are accessing or sharing content without licence. The letters warn the suspected file-sharer that they are infringing copyright and could be sued.

Cox has its own system for passing on the piracy warnings, though, as the judge overseeing the case, Liam O’Grady, notes, that basically amounts to a ‘thirteen-strike’ system. Meanwhile, during last year’s court case, internal memos were presented that showed staff at Cox were encouraged to let file-sharers off, so that the net company didn’t risk losing the file-sharer’s business.

After losing the case late last year, Cox sought a new judgement in its favour on various points of law, while also requesting a new trial. Cox argued that BMG hadn’t properly demonstrated that its customers had actually infringed the music firm’s copyrights, that there was insufficient evidence regarding Cox’s liability for contributory infringement, and no conclusive evidence that the ISP had wilfully turned a blind eye to its users infringing.

On the contributory infringement point, Cox’s argument went back to the classic US case in this domain, that involving Sony Betamax in the early 1980s, in which the court deemed that the electronics firm was not liable when its customers used its technology to pirate movies, because the Betamax video player had legit uses and the company had no control over how the kit was used once it had been sold. The Sony Betamax case was a big part of the defence in the early file-sharing lawsuits in the US.

But, as in those landmark file-sharing cases, O’Grady pointed out that – unlike Sony with Betamax video players – Cox does in fact have some control over how its services are used. Therefore, he concluded, there was a sufficient case for contributory infringement. Indeed, the judge rejected all three of the points of law raised by the ISP, and also refused the request for a new trial.

Though there was some good news for the net firm, in that the judge also denied BMG’s post-trial claim for an injunction that would oblige Cox to introduce a number of new anti-piracy measures. The judge, while confirming Cox’s past liabilities, ruled that there wasn’t a strong enough case to force the ISP to implement the measures BMG proposed.