The U.S. District Court of Eastern District of Virginia upholds $25 Million penalty against Cox Communications on a lawsuit filed by the music rights group BMG on failing to warn its customers who were illegally downloading and sharing copyrighted music content.
In order to monitor the file sharing activities on internet networks, BMG uses a third party company, Rightscorp, which notifies ISPs in case of any illegal file sharing. ISP is responsible for warning its customers that they may be held liable for copyright infringement. BMG accuses that millions of infringement notices filed by Rightscorp was blocked by Cox and they failed to track their users who downloaded music illegally.
Normally, ISPs are protected from the copyright infringement claims by the “safe harbor” provisions of the Digital Millennium Copyright Act (DMCA). But BMG was successful in convincing the jury that Cox had failed to follow the DMCA rules and that they are liable for the illegal downloads of its customers.
Cox, on the other hand, has an anti piracy system from 2008. They countered the evidence entered by the BMG and argued that they are just offering passageway to internet. Cox also criticized the practice of including settlement offer in the infringement notice (payment of $20 or $30) by Rightscorp, which they expect to be passed to the users.
Cox petitioned for a revision of the decision and a new trial. However, judge O’Grady said that Cox “has not identified any ground that would warrant a new trial.” He said that Cox does not qualify for the safe harbor of DMCA as it failed in punishing the copyright infringers. O’Grady further said that the Cox’s “thirteen-strike” online piracy policy “so convoluted and multi-stepped as to be useless.”
Regarding Cox’s criticism on Rightscorp’s settlement system, the judge commented that the settlement demands were “premature at best because a notification alone cannot establish infringement. What BMG found innovative, Cox found extortionate. In reaching this conclusion, the Court acknowledges that the application of traditional contributory infringement to large intermediaries like Cox magnifies the uncertainties in this area of the law and raises the specter of undesirable consequences that may follow.”
The case has made a great impact on US internet access providers. Cox spokesman said that “we are disappointed in the ruling and plan to appeal.”