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Major labels say Cox’s appeal of billion dollar copyright case is “divorced from both the record and reality”

By | Published on Tuesday 3 August 2021

Cox Communications

Earlier this year US internet service provider Cox Communications claimed that “the music industry is waging war on the internet”, as it formally appealed a billion judgement filed against it in a legal battle with the major record companies.

But “the story Cox tells in its [appeal] – ‘a beleaguered internet service provider, doing its best to police infringement on its system, targeted by copyright holders waging war on the internet’ – is divorced from both the record and reality”, say the majors in their response.

It was originally BMG that successfully sued Cox, accusing the ISP of having a deliberately shoddy system for dealing with infringement and repeat infringers on its network. That, the music firm argued, meant that Cox could not rely on the copyright safe harbour to avoid liability for its users’ infringement.

The majors sued in the wake of BMG case and successfully made the same arguments before a jury, resulting in the net firm being ordered to pay the music companies a billion dollars in damages.

In its filing with the Fourth Circuit appeals court in May, Cox ran through the history of the music industry’s battle with online piracy, saying that – when successful litigation against file-sharing apps and platforms failed to actually stop file-sharing – “the music industry launched an aggressive new strategy: attack the internet itself, suing the internet service providers – the cable and phone companies, like defendant Cox Communications, that deliver the internet”.

It then ran through some common arguments as to why an ISP shouldn’t be held liable for the copyright infringement of it users. Skirting around the internal emails seen back in the BMG case that suggested Cox was only paying lip service to its obligation under law to deal with repeat infringers – ignoring its own policies to avoid disconnecting customers – the ISP’s appeal then focused on questioning the credibility of the takedown notices submitted by the music companies, something it had already done extensively in both the BMG case and the first round of this case, without success.

Though this time that was partly to bolster an argument that – even if the allegedly shoddy systems at Cox for dealing with repeat infringers meant the ISP could not rely on the copyright safe harbour – the labels had not, in fact, fully proven that its users had even infringed the copyrights of the music companies. And if you can’t prove the direct infringement of the users, you can’d prove the contributory infringement of the internet services those users use.

“Losing safe harbour protection does not … establish that an ISP is liable for its subscribers’ infringement”, Cox said in its appeal. The jury in the lower court were wrong to disregard the issues it raised about the copyright notices the labels and their anti-piracy agency submitted, the Cox appeal said. And as a result of that error, the ISP now faces a damages bill that is “entirely untethered from both the harm it caused and Cox’s culpability”.

But Cox should just shut up and pay up, reckon the majors in their response to the appeal, filed with the court late last month. In their legal filing they argue that this case is actually pretty clear cut and the the ISP’s liability for infringement is therefore uncontroversial. And as for the newer arguments presented in the appeal, they misrepresent the law, and should have been raised before if Cox thinks they are sufficiently important, the majors add.

Noting that the BMG case also went to the Fourth Circuit appeals court, the majors begin: “This court has already held that Cox acted so unreasonably in addressing its subscribers’ known repeated copyright infringement that it was ineligible for the accommodating ‘safe harbour’ provided by the Digital Millennium Copyright Act for internet service providers accused of secondary liability for infringement”.

Meanwhile, “the district court found it beyond reasonable dispute that Cox knew specific subscribers were using its system to repeatedly infringe plaintiffs’ works. The jury heard ample evidence that Cox created a safe haven for repeat infringers, forgiving infringement after infringement after infringement, and celebrating its contempt for copyright in emails like ‘F the dmca!!!'”.

“The jury heard ample evidence that Cox profited directly from infringement on its system”, the new legal filing goes on. “Rather than suspend or terminate serial infringers’ accounts, as it had the right and ability to do, Cox instead retained them as subscribers, and collected hundreds of millions of dollars in subscription fees from them. The jury’s verdict was supported by a towering pile of evidence – much of it from Cox itself”.

Elsewhere, the majors deal with Cox’s newer arguments and ongoing griping about the music industry’s copyright notices. They write: “Unable to escape this court’s prior ruling on the knowledge standard, Cox now argues that evidence of ‘past acts’ of infringement falls short of ‘establishing that Cox knew that each of the 58,000 accused subscribers was ‘substantially certain’ to infringe again'”.

However, that’s not true, the majors argue, reckoning the past judgements on the BMG case back them up on this, despite Cox saying the opposite in its appeal.

“Cox’s proposed foreknowledge standard”, they then add, “would effectively insulate ISPs outside the DMCA safe harbour from liability for the infringement of even ‘habitual abusers’, even when the ISPs well know that a ‘customer will likely fail again’ to comply with copyright law”. That would be bad law and, the majors insist, “[the] BMG [judgement] does not support that position”.

Delving deeper into the gripes over copyright notices, the majors continue: “Cox claims the accuracy of the infringement notices was ‘hotly disputed’ such that it was unreasonable for the district court to conclude that the notices adequately informed Cox of its subscribers’ infringement. That is wrong. Any factually disputed elements of the notices did not contribute to the district court’s … ruling”.

“For example”, they add, “Cox questioned where a subscriber caught illegally sharing a file had initially obtained that file. But that evidence was irrelevant to the knowledge element of contributory infringement; a subscriber illegally distributing copyrighted content is engaged in infringement regardless of the source of the content”.

With all this in mind, the majors conclude, “the district court’s judgment should be affirmed”. And so the case continues.