$1 Billion USD copyright infringement judgment against ISP. SONY v. COX

A copyright grants the creator of a new work of expression certain exclusive rights. The owner of a copyright has the exclusive right to reproduce, distribute, display, perform, transmit and create derivative works based on the original. If someone other than the copyright owner attempts to exercise one of these exclusive rights, that can be considered copyright infringement. A copyright owner can file a lawsuit to stop copyright infringement with an injunction and get monetary damages for infringement which has occurred.

The United States adopted its copyright law long before the internet was available to most people, therefore the copyright act had difficulties dealing with the unique issues presented by the internet. One of the copyright law issues that was presented by the internet was: When are internet service providers liable for the acts of their users? Internet service providers (ISP) provide their customers with a connection to the internet, or other services related to the transmission of data through the internet. The internet makes it very easy for those who do not respect copyright to reproduce and distribute copyrighted works. ISPs want to sell their services to customers and not be concerned with the actions of their customers. In the past when copyright owners would contact an ISP about infringement happening on the ISP’s network, the ISP was not obligated to help the copyright owner. This forced copyright owners to sue the ISP under the theory of contributory infringement. Neither copyright owners or ISPs were happy with this arrangement.

Congress addressed this issue when it adopted the Digital Millennium Copyright Act (DMCA). Specifically Title II of DMCA, creates a safe harbor for ISPs against copyright infringement liability, provided the ISP meets specific requirements. ISPs must adhere to certain prescribed safe harbor guidelines and promptly block access to alleged infringing material (or remove such material from their systems) when they receive notification of an infringement claim from a copyright holder or the copyright holder’s agent. The DMCA also includes a counternotification provision that offers ISPs a safe harbor from liability to their users when users claim that the material in question is not, in fact, infringing.

Despite the safe harbor provisions of the DMCA there are still conflicts between copyright owners and ISPs. SONY MUSIC ENTERTAINMENT, v. COX COMMUNICATIONS, INC, 18-cv-00950 (E.D.VA 2018) illustrates what can happen when a dispute between a copyright owner and an ISP goes to trial. The plaintiff in this case is a recording company that represents numerous performers and song writers. The plaintiff has the right to enforce the copyright of the music catalog that it manages.

The defendant is an internet service provider. It has a DMCA policy that requires thirteen allegations of copyright infringement before a customer of the defendant will be suspended. The defendant’s DMCA polisy was found to be severally lacking in a prior court case, i.e. BMG Rights Mgmt. (US) LLC v. Cox Commc’ns, Inc., 881 F.3d 293 (4th Cir. 2018). In that case the court held, as a matter of law, that the defendant could not invoke the DMCA safe harbor to limit its liability. Using that judgment as precedent the plaintiff filed suit against the defendant and requested statutory damages for the infringement of over 10,000 copyrighted works.

The case went to trial and the jury found in favor of the plaintiff. The jury awarded the plaintiff $1 Billion USD in damages. The defendant has said that it would appeal the jury’s verdict. While this case is probably not over yet, the lesson that can be learned is that ISPs must establish a policy to deal with copyright infringement. If they fail to do so, and they lose the safe harbor protections of the DMCA, the consequences can be severe.

If you have questions or comments for the authors of this blog please email us at: admin@uspatentlaw.cn