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On Thursday, a federal jury in Virginia delivered a $25 million verdict in favor of BMG Rights Management against Cox Communications in a landmark piracy case that tested an Internet service provider’s responsibilities for the copyright infringing actions of its users.
The verdict came after a weeklong trial set in motion after U.S. District Judge Liam O’Grady denied summary judgment for Cox, ruling in November that the ISP’s failure to reasonably implement a repeat-infringer policy meant it couldn’t have safe harbor under the Digital Millennium Copyright Act. Today’s decision could make it more likely that in the future, copyright pirates are kicked off the Internet.
BMG, which controls rights to works by David Bowie, Bruno Mars, Frank Ocean and many other artists, brought the lawsuit after its agent Rightscorp found Cox to be less than cooperative in attempts to send demand letters to individual pirates. BMG objected to what it called Cox’s “under the table policy purporting to terminate repeat infringers while actually retaining them as high-speed Internet customers.”
Although Rightscorp detected 1.847 million instances of infringement and collected more than 150,000 copies of copyrighted works downloaded directly from Cox subscribers, according to testimony presented at trial, there was 1,397 copyrighted works in contention in the lawsuit.
That means that the $25 million verdict amounts to about $18,000 for each song infringed.
According to the verdict form (read here), the jury found Cox liable for contributory copyright infringement after also finding the plaintiff proved that Cox’s users used the service to directly infringe the copyrights. Notably, the jury also ruled that Cox’s infringements were willful. The ISP was able to beat back a separate claim for vicarious infringement. The judge allowed the case to be determined by the jury after denying the parties’ motions for judgments as a matter of law.
The judge’s earlier pre-trial rulings seem likely to be appealed as the case has been closely watched by leading entertainment industry trade associations and other tech companies with the potential of shaping how ISPs deal with copyright abuses on their systems.
Cox is also facing a lawsuit from its insurer aiming to escape the tab in this BMG case due to “Cox’s business policy and practice of ignoring and failing to forward infringement notices and refusing to terminate or block infringing customers’ accounts.”
BMG was represented by attorneys at Steptoe & Johnson. Partner Michael Allan, who served as lead counsel, says, “We believe this decision sends a message to ISPs that they have a responsibility to act upon and limit the massive copyright infringement using their networks that has been brought to their attention by copyright owners.”
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