Don’t do the Crime if you Can’t Pay the Ten Billion Dimes

On Thursday December 19th, 2019, Cox Communications, Inc. (“Cox Communications”) was found liable for copyright infringement of over 10,000 recordings and compositions. Each individual infringement will cost them over $99,000 adding up to a one-billion-dollar verdict. Yes, that is $1,000,000,000.

 

The Lawsuit Itself

This suit was brought by 53 music companies including the top guns, Sony Music, Warner Music Group and Universal Music Group. The suit was filed in July of 2018 stating that Cox Communications, an internet service provider aka ISP, repeatedly ignored infringement notices sent by multiple music companies – allegedly hundreds of thousands of them!

To give a little background, this is not Cox Communications’ first run in with copyright issues. BMG filed a lawsuit back in 2015 where Cox Communications was ordered to pay $25 million in damages – this was overturned on appeal however Cox Communications settled with BMG before a new trial began. For more information on that particular case – click here – So, this is not the first time Cox Communications has dealt with copyright infringement claims.

The complaint filed in 2018 consisted of two counts – one for contributory copyright infringement and the other for vicarious copyright infringement. Contributory copyright infringement occurs when one who, with knowledge, of the infringing activity induces, causes, or materially contributes to the infringing conduct of another. The second count of vicarious copyright infringement requires two elements – first the right and ability to supervise or control the infringing activity and a direct financial benefit from that activity.

After a three-week trial in Alexandria, VA, a jury unanimously found that Cox Communications was liable on both counts and found that each copyrighted work, all 10,017 of them, was worth $99,830.29!

 

Cox Communication’s Side

In the 2005 BMG case, as well as the current one, Cox Communications tried to hide behind the Digital Millennium Copyright Act (“DMCA”) safe harbor provisions. As you may remember from our previous “YouTube Has Your Back” blog post, back in 1998 the DMCA was enacted to keep up with the fast growing internet and new copyright issues emerging from that new technology. This Act also provided some safe harbors, think of them as chances to cure the issue without penalty, for ISP’s (like Cox Communications).

These safe harbors were created because legislature realized it is impossible for ISP’s to track and monitor each and every one of their user’s activity. However, part of the safe harbor requirements are that these ISP’s make every effort possible, including implementing policies and procedures allowing for reporting of copyright infringement and the punishment of those who infringe. YouTube for example has a three-strike policy, if a video is reported to be infringing it is taken down, after the second time a user is reported as infringing the video is removed and a final warning given, after the third time the user’s page is deleted from YouTube and blocked.

Cox Communications stated that they had a 13-strike policy in place. In regard to the 13-strike policy, there was not a complete termination from use of the ISP, the reported infringers were put on a “soft-termination” or what some may call – a time-out. Additionally, each of the major record labels and music companies provided notice of nearly 20,000 Cox Communications subscribers that could be categorized as repeat infringers.

Cox Communications released a news release claiming the verdict awarded against them to be “unwarranted,” “unjust,” and “egregious” citing that today “you can download a song for a dollar,” but the verdict awards nearly $100,000 per song. Cox Communications also stated they “plan to appeal the case and vigorously defend ourselves. We provide customers with a powerful tool that connects to a world full of content and information. Unfortunately, some customers have chosen to use that connection for wrongful activity. We don’t condone it, we educate on it and we do our best to help curb it, but we shouldn’t be held responsible for the bad actions of others.” As of the publishing of this blog, Cox Communications has filed a motion for new trial, and a motion for a judgment as a matter of law to try and circumvent the large jury verdict against them. Those motions are still pending.

The DMCA certainly attempts to bridge the gap between understanding the limitations an ISP has on controlling its users and the protection of copyright holders’ works, however, a 13-strike policy, “time-out termination” and ignoring hundreds of thousands of warnings, just wasn’t enough of an effort on Cox Communication’s end to receive these protections according this jury.

 

What Does this Verdict Mean?

This verdict means a lot of things, mostly positive for copyright holders. Verdicts like this are showing ISP’s and other major communication providers that they have to take responsibility for infringers using their website and networks. There are safe harbors in place to protect these ISPs – however, the ISP’s must take some real steps for reporting and punishing infringers or those safe harbors will not remain available to them. Hopefully this case sends a warning to other companies to examine their policies and implement better procedures for protecting copyrighted works accessed using their services, and better punishments given to their infringing customers.

For more information on how to best protect your copyright and all other intellectual property needs, contact The Lomnitzer Law Firm at (561) 953-9300 or through our website form to schedule your free consultation.