Cox Requests Rehearing of Piracy Case That ‘Threatens to Throw Countless People Offline’

[NelsonG]

Internet provider Cox Communications has been on the sharp end of several piracy lawsuits in recent years.

The biggest hit came four years ago when the Internet provider lost its legal battle against a group of major record labels, including Sony and Universal.

A Virginia jury held Cox liable for pirating subscribers because it failed to terminate accounts after repeated accusations, and ordered the company to pay $1 billion in damages to the labels. This landmark ruling was appealed, leading to a mixed outcome last month.

Appeals Court Issues Mixed Order

After taking a fresh look at the case, the Fourth Circuit Court of Appeals ruled partly in favor of Cox. The Court concluded that Cox is not vicariously liable for piracy carried out by subscribers, as it didn’t directly profit from their activity.

The Court did not reverse the lower court’s contributory copyright infringement finding, however. According to the Court of Appeals, there was sufficient evidence to show that Cox ‘knew’ piracy would likely occur if it continued to provide its Internet services to particular subscribers.

While the ruling is a mixed bag, it also meant that the $1 billion damages award could not stand. Instead, the Court ruled that a new trial should determine the scale of the damages.

Rehearing en Banc

Neither party was pleased with the ruling and both Cox and the labels requested a rehearing en banc, essentially calling for a do-over.

The labels, for example, would like the $1 billion in damages to remain unchanged, arguing that Cox waived a potential challenge of it earlier. In addition, the music companies argue that the Court’s decision conflicts with appeal court precedents.

Cox also calls for a rehearing. The Internet provider argues that this case isn’t merely about nuances of copyright law and associated liability, it’s much bigger than that. According to the ISP, the Internet connectivity of countless people is at stake.

‘Disconnecting Schools and Nanny Cams’

In its petition, the provider argues that the current precedent results in a highly restrictive regime where Internet providers may find themselves forced to disconnect ‘innocent’ people because someone allegedly used their connection to pirate content.

“If an ISP receives more than one accusation that some anonymous person used a specified internet connection to download infringing songs, it can avoid liability only by swiftly throwing every person in that home or business off the internet, disconnecting the guilty and innocent alike from their schools, their livelihoods, their nanny cams, their news, and everything else they do online,” Cox warns.

“If instead the ISP continues to provide the connection, a jury can find it engaged in ‘culpable conduct’ akin to aiding-and-abetting a crime.”

The ISP argues that the liability finding is at odds with a recent Supreme Court decision which concluded that a service is not necessarily liable for ‘merely’ providing a service that’s used for illegal activity. The Court of Appeal didn’t consider this in its latest ruling, but should do so, Cox notes.

A rehearing is also warranted because a party shouldn’t necessarily be held liable for willful secondary infringement, as is the case here. This conflicts with earlier precedent, the ISP argues.

“[W]illfulness requires the defendant’s awareness that its own conduct violates the law, as the Eighth Circuit has squarely held in a secondary infringement case like this one,” Cox writes in its petition.

‘Draconian Regime’

These two earlier conclusions of the court created “the most draconian approach in the country,” Cox argues, stressing that a rehearing should be granted to address them.

The matter ultimately boils down to an interpretation of the law, which can get quite technical. However, Cox also highlights the potential consequences, stressing that these issues are “extraordinarily important.” Not just for Cox, but for millions of Internet subscribers at risk of disconnection.

“The issues presented here are deeply important, not only to copyright defendants like Cox, but to millions of people who depend on internet access every day,” Cox writes.

“[T]he legal regime the panel decision and BMG enact requires an ISP to cut the cord on subscribers after receiving just a handful of notices alleging that some anonymous person has used the subscribers’ connection to infringe.”

The current precedent requires ISPs to disconnect subscribers based on repeated third-party claims. If they don’t, they subject themselves to liability, as the previous $1 billion verdict showed.

‘Hobson’s Choice’

Cox suggests that this looming punishment is disproportionate. Not only in terms of the financial consequences for Internet providers but also because the public’s Internet connectivity will be put at risk based on unadjudicated piracy claims from rightsholders.

“Without meaningful limits on secondary liability, ISPs face powerful incentives to swiftly terminate the internet connections of innumerable businesses and households, their monthly subscription fees a pittance compared to the threat of $150,000 in damages for every downloaded song.

“The full Court should grant rehearing and reject a Hobson’s choice that threatens to throw countless ordinary people offline in service of the music industry’s bottom line,” Cox concludes.

The ISP’s position is supported by several amici including the American Library Association, Public Knowledge, the Electronic Frontier Foundation, and fellow Internet provider Frontier Communications, which has filed supporting briefs.

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A copy of Cox’s petition for a rehearing en banc is available here (pdf) and the record labels’ petition can be found here (pdf). Frontier’s proposed amicus curiae brief can be found here (pdf) and the brief of the other supporters is available here

From: TF, for the latest news on copyright battles, piracy and more.

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