BMG Rights Management, one of the world’s largest music publishers, has been awarded a $25 million verdict by a federal jury after Cox Communications was found to be liable for the copyright-infringing actions of its users.Following a week-long trial in the U.S. District Court for the Eastern District of Virginia, it was determined that Cox was on the hook for the actions of its users as a result of its failure to reasonably implement a repeat-infringer policy. While the Digital Millennium Copyright Act offers a number of “safe harbors” that typically protect internet service providers from liability for copyright infringement, Cox was found to fall outside of these safe harbors when it failed to crack down on repeated piracy. For example, after identifying known copyright pirates among Cox users, BMG sought to enlist Cox’s help in sending cease and desist letters to those users and/or terminating their internet service. Cox purported to have a policy of terminating the service of repeat copyright infringers, but in practice retained them as high speed internet customers.
BMG controls the rights to music by popular artists including David Bowie and Bruno Mars, among others. At issue in this particular lawsuit were 1,397 different copyrighted works that were downloaded illegally a total of nearly 2 million times. The jury found Cox liable for willful contributory infringement, awarding $25 million in damages. Moreover, Cox is now facing a separate lawsuit from its insurance company, which is trying to skip out on the tab in the BMG case due to “Cox’s business policy and practice of ignoring and failing to forward infringement notices and refusing to terminate or block infringing customers’ accounts.”
The impact of this landmark decision on future internet service provider liability for copyright infringement seems clear: you can probably expect ISPs to crack down much harder on copyright abuse, probably going as far as to terminate the service of repeat offenders. In the wake of this verdict, the failure to do so could result in significant liability for the service provider, in what appears to be a clear victory for artists and rights holders.