US Federal Court overturns huge $1bn piracy ruling

A Federal Appeals court has overturned a 2019 verdict on Cox Communications and the internet provider’s ability to halt illegally downloaded items.

The verdict that was handed down by a jury was first filed by major music and license-holding heavyweights such as Sony Music Entertainment, Warner Bros. Records Inc. and Universal Music Corp.

Cox Communications had been held responsible for the thousands of songs and other licensed items that users had pirated over peer-to-peer connections.

Sony and the other Plaintiffs had believed that Cox Communications hadn’t exercised stringent enough measures to ban or limit the attempts of those using the service to share and harvest their licensed materials.

Judge overturns ruling

Judge Pamela A. Harris and Senior Circuit Judge Henry F. Floyd joined the opinion written by Judge Allison Jones Rushing in overturning the decision.

Judge Rushing’s opinion stated that “Federal law protects internet service providers from monetary liability for copyright infringement committed by users of their networks, but only if those service providers reasonably implement a policy to terminate repeat infringers in appropriate circumstances. In a prior case, our Court held that Cox had failed to reasonably implement an anti-piracy program and therefore did not qualify for the statutory safe harbor.”

This ‘safe harbour’ was implemented after Congress agreed the Digital Millennium Copyright Act (DMCA) in 1998.

The Judge would go on to say that the initial decision of “wilful contributory infringement” would be affirmed by the Court, but “But we (the Fourth Circuit Court) reverse the vicarious liability verdict and remand for a new trial on damages because Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for vicarious liability.”

“The continued payment of monthly fees for internet service, even by repeat infringers, was not a financial benefit flowing directly from the copyright infringement itself,” Rushing said. “Indeed, Cox would receive the same monthly fees even if all of its subscribers stopped infringing,” she would add.

The Court would still uphold Cox Communication’s part in the continuation of licensed items being pirated and the company’s lack of action in terminating such offenders would lead to them being partially responsible for these infringements.

Judge Rushing also said that the internet service provider’s part “accords with principles of aiding and abetting liability in the criminal law. Lending a friend a hammer is innocent conduct; doing so with knowledge that the friend will use it to break into a credit union ATM supports a conviction for aiding and abetting bank larceny.”

This means that Cox Communications would not escape some form of a fine for their part in the case under the aforementioned “wilful contributory infringement.”

The three-judge panel has asked the US District Court for the Eastern District of Virginia to set a new date to potentially award damages after vacating the initial damages award from 2019.

These damages will most likely be reduced substantially, but Cox Communications will be held accountable for its part in this copyright saga.

Image credit:  Ideogram