BMG Rights Management (US) LLC, v. Cox Communications, Inc. (Motz 2/1/2018): The Fourth Circuit held that internet service providers are not entitled to the safe harbor provisions of the Digital Millennium Copyright Act when they fail to terminate the subscriptions of customers who repeatedly use “peer-to-peer” file sharing to infringe on copyrighted material. However, the court also held that the district court erred in charging the jury with a negligence standard instead of a standard of actual knowledge or willful blindness with regard to the contention that the internet providers were liable for contributory copyright infringement. The court affirmed the district court’s entry of summary judgment with regard to the safe harbor provisions but remanded for a new trial because of the erroneous jury instructions. Full Opinion
BMG Rights Management (US) LLC, v. Cox Communications, Inc. No. 16-1972
Decided: February 1, 2018
The Fourth Circuit held that internet service providers are not entitled to the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”) when they fail to terminate the subscriptions of customers who repeatedly use “peer-to-peer” file sharing to infringe on copyrighted material. However, the court also held that the district court erred in charging the jury with a negligence standard instead of a standard of actual knowledge or willful blindness with regard to the contention that the internet service providers were liable for contributory copyright infringement. The court affirmed the district court’s entry of summary judgment with regard to the safe harbor provisions but remanded for a new trial because of the erroneous jury instructions.
Congress enacted the DMCA to aid in the protection of copyrights by assigning liability to internet service providers who permit violations of the act. However, a safe harbor provision insulates internet service providers from liability if they have “adopted and reasonably implemented . . . a policy that provides for the termination in appropriate circumstances of subscribers . . . who are repeat infringers.”
In this case, BMG Rights Management LLC (“BMG”), which owns copyrights in musical compositions, sued internet service providers Cox Communications, Inc. and CoxCom, LLC (collectively, “Cox”) for permitting copyright infringement through subscribers’ use of BitTorrent, a “peer-to-peer” file sharing method. Cox implemented what it called a thirteen-strike system whereby each strike by an infringer would result in some action, beginning with warnings and moving to suspensions of the subscriber’s account. However, based on the record, the court did not find that Cox was ever terminating the accounts of those who were repeat offenders. In fact, the court found that Cox was actively ignoring notices that its subscribers were infringing on copyrights and had an unwritten policy of never terminating infringers because it did not want to lose income from those customers. The district court held that Cox failed to produce evidence that it implemented an appropriate policy entitling it to the DMCA safe harbor provision and granted summary judgment to BMG on that issue. A jury subsequently found Cox liable for willful contributory infringement. Cox timely appealed, arguing that the district court erred in denying it the safe harbor defense and incorrectly instructing the jury.
On the safe harbor issue, the Fourth Circuit dismissed Cox’s contention that “repeat offenders” only included infringers who were found, after adjudication of the issue, to be offenders. The court reasoned that to hold otherwise would essentially moot the purpose of the DMCA because the offenders would have already been punished. The court also rejected Cox’s contention that its procedures were reasonable and were implemented in a reasonable manner such that the safe harbor provisions would apply. In so holding, the court relied on internal documents from Cox which explained that Cox would never actually terminate a user’s account for copyright infringement.
The court, however, did accept Cox’s contention that the jury instructions were erroneous. The Fourth Circuit held that the district court erred in stating Cox was liable for contributory infringement if the jury found “Cox knew or should have known of such infringing activity.” The court reasoned that the “should have known” language amounted to a negligence standard when the standard should have been limited to actual knowledge or willful blindness. The court also addressed several other of Cox’s complaints with the jury instructions and stated that the district court did not err in informing the jury that Cox could still be liable for contributory infringement, even though the technology used for infringement could be substantially employed for non-infringing uses. However, the court agreed that Cox must have had specific knowledge of infringement to be found liable for willful infringement and that it was not enough that Cox knew infringement was occurring somewhere on its network.
Accordingly, the Fourth Circuit affirmed the district court’s grant of summary judgment in favor of BMG regarding the safe harbor provisions but remanded for a new trial because of the erroneous jury instructions.
James David George, Jr.