Cox Settles Trailblazing Lawsuit That Demanded ISPs Get Tough on Piracy

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California's two sexiest industries are at odds as new legislation in Congress looks to grant U.S. law enforcement unprecedented access to fight rogue piracy sites abroad .

On the verge of going to trial a second time on claims of not doing enough on the piracy front, Cox Communications has settled with BMG Rights Management — which administers the rights to works by David Bowie, Bruno Mars, Frank Ocean and many other artists.

The closely-watched case in the entertainment industry tested an internet service provider's responsibilities for policing the copyright infringing actions of its users. BMG hired Rightscorp, which flagged nearly two million instances of infringement and informed Cox that its users were uploading and downloading music using BitTorrent. In 2015, a trial was held in Virginia on BMG's claim of contributory copyright infringement. The jury delivered a $25 million verdict.

In a decision upholding the verdict, U.S. District Court Judge Liam O'Grady slammed what he said was "essentially a thirteen-strike policy" on the part of Cox — one which Cox feigned cooperation with by sending warnings to users, and sometimes suspensions, but hardly ever the termination of service.

This past February, the Fourth Circuit Court of Appeals ruled that the trial judge was correct in determining that Cox wasn't eligible for safe harbor from copyright infringement due to its failure to implement a consistent and meaningful repeat infringer policy, but, nevertheless, vacated the $25 million judgment because of erroneous jury instructions.

Accordingly, the two sides were gearing up for a second trial that was to begin on Aug. 28. That won't occur after BMG filed a notice of voluntary dismissal on Friday. The case has been settled, although the terms won't be made public pursuant to a confidentiality stipulation.

Meanwhile, BMG's success has encouraged other rights-holders to file similar lawsuits.

In late July, the major record labels filed their own lawsuit against Cox. That case, with the potential of more than a billion dollars in damages, is still active.

Since April 2017, Universal and Warner have also been pursuing a contributory copyright lawsuit against Grande Communications Network in Texas. That litigation has just hit the summary judgment phase, where the plaintiffs are asking a judge to rule out a safe harbor defense.