BMG Rights Management (US) LLC v. Cox Communications, Inc., 14-cv-1611 (E.D. VA 2017)
Cox Communications is a high-speed internet access provider to customers nationwide. BMG acts as the owner or administrator of approximately 1,400 musical composition copyrights. Users of Cox internet service used BitTorrent, a type of peer-to-peer (“P2P”) file sharing, to illegally upload and download music files, violating BMG’s distribution rights. According to a ruling by a Virginia District Court, Cox was too lenient with the users and was held liable for contributory copyright infringement.
A contributory infringer is one who, (1) “with knowledge of the infringing activity,” (2) “induces, causes or materially contributes to the infringing conduct of another.” CoStar Grp., Inc., 373 F.3d at 550 (quoting Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971)). The DMCA provides a possible safe harbor for internet service providers that set up policies to held mitigate user-based copyright infringement. Cox tried to claim such a safe harbor, but the Court found that Cox had not reasonably implemented a repeat infringer policy as required to receive the protections of the DMCA. Specifically, the evidence showed that Cox did not terminate access for repeat infringers under appropriate circumstances, and that, before 2012, the company had an informal policy of consistently reinstating infringing users. The Court granted BMG’s motion for summary judgment and a jury awarded BMG $25 million in statutory damages.
The court also awarded plaintiffs a healthy dose of attorney’s fees. In a previous decision, the Fourth Circuit Court of Appeals provided the following factors to consider when deciding whether or not to award legal fees: (1) the motivation of the parties; (2) the objective reasonableness of the parties’ legal and factual positions; (3) the need to advance considerations of compensation and deterrence; and (4) any other relevant factor (Rosciszewski v. Arete Associates, Inc., 1 F.3d 225, 234 (4th Cir. 1993)). Because the court found several “smoking gun” emails as evidence of motivation and a lack of reasonableness of Cox’s position, the Court awarded $8,383,468 in attorney’s fees.
This ruling increases the likelihood that an Internet Service Provider (ISP) will terminate a subscriber’s connection for copyright infringements. The holding also shows copyright holders that they are able to protect their works in an increasingly important digital market by limiting the far-reaching protections of the DMCA provisions and ensuring compliance accountability.