Cox Communications Seeks To Set Aside $1 Billion Piracy Verdict

The internet service provider Cox Communications is asking an appellate court to set aside a $1 billion verdict over alleged music piracy by subscribers.

“Unlike the offerings of Napster and its ilk, internet service is neither designed nor advertised to promote piracy,” Cox writes in papers filed this week with the 4th Circuit Court of Appeals. “Not only does Cox not encourage infringement, it cannot prevent infringement over its cables, any more than your phone company can prevent users from perpetrating frauds over telephone lines.”

Cox makes the argument as part of its appeal of a jury's December 2019 decision to hold the company responsible for piracy by subscribers and award music companies $1 billion in damages.

That verdict stems from a lawsuit filed against Cox in July 2018 by Sony Music Entertainment and dozens of other music companies. They contended Cox was responsible for users' piracy on the grounds that it allegedly refused to take “reasonable measures” to stem copyright infringement by its subscribers.

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The music companies claimed they sent “hundreds of thousands” of notifications about piracy to Cox, which allegedly failed to terminate repeat offenders.

Cox argues the verdict should be set aside for several reasons, including that broadband providers like itself don't directly cause copyright infringement, or directly profit from it.

The company specifically urges the appellate court to reject the premise that the revenue it garners by retaining subscribers amounts to profitting from piracy.

“Of course, any ISP would make less money if it cut off a subscriber’s internet subscription -- whether for infringement or spewing hate speech. But that does not somehow give all ISPs a direct financial interest in every unlawful act committed on the internet,” Cox writes.

Cox then compares itself to a restaurant that declines to throw out an unruly patron.

“If a diner at Denny’s makes a scene during dessert, a restaurant manager may opt not to eject him because the restaurant wants him to pay the check. That does not mean Denny’s has a direct financial interest in the diner’s outburst,” Cox writes.

Cox also says the $1 billion award is “entirely untethered from both the harm it caused.”

Cox writes in its appeal that the award was based on activity of 58,000 subscribers, who could have purchased the music they allegedly pirated for a total of $692,000, had they paid $1 per download.

The digital rights group Public Knowledge -- which has often been at odds wtih broadband providers over policy issues like net neutrality -- plans to join other organizations in a friend-of-the-court brief supporting Cox.

“If left in place, the decision below creates a strong incentive for ISPs to cut off their customers based on nothing more than unverified notices from rightsholders,” John Bergmayer, legal director at Public Knowledge, says. “This is bad copyright policy, and taking away people's broadband connections on this basis is as inappropriate as cutting them off from electricity or water.”

Cox previously settled a similar lawsuit by the record label BMG. Before resolving that case, Cox argued it was protected by the federal copyright law's so-called "safe harbor" provisions.

Those provisions immunize Internet service providers from liability for users' activity, but only if the ISPs have policies for handling repeat offenders.

A trial judge and the 4th Circuit Court of Appeals ruled that Cox wasn't entitled to rely on those safe harbors, because it didn't implement its repeat-offender policy.

In an opinion issued in February of 2018, a three-judge panel of the 4th Circuit wrote that Cox didn't enforce its “13-strike” repeat offender policy, which would have required the company to consider terminating subscribers after they received 13 notices of copyright infringement.

"Indeed, in carrying out its thirteen-strike process, Cox very clearly determined not to terminate subscribers who in fact repeatedly violated the policy,” the appellate judges wrote in that prior case.

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