Last week, the U.S. Court of Appeals for the Fourth Circuit issued a decision in BMG Rights Management v. Cox Communications that provided some clarity to the complicated state of the law relating to Internet service provider liability. This result emerged from a decision that affirmed the district court’s holding that Cox was not eligible for the DMCA’s safe harbor, but granted Cox a new trial on the jury’s finding of contributory infringement.
Cox provides Internet access to 4.5 million subscribers. Music publisher BMG hired Rightscorp to monitor BitTorrent to detect infringing activity. After detecting infringing activity by Cox subscribers, Rightscorp sent notices to Cox identifying the allegedly infringing activity, and requested that Cox forward these notices to the allegedly infringing subscribers. The notices contained a settlement offer, allowing the subscriber to pay $30 for a release of liability. Cox notified Rightscorp that it would not process any notices that contained settlement language. Rightscorp continued to send Cox notices containing the settlement offer, leading Cox to block all of the millions of notices Rightscorp sent on BMG’s behalf.
BMG sued Cox for contributory copyright infringement. Cox argued that it qualified for the Digital Millennium Copyright Act’s safe harbor for Internet service providers. The district court held that Cox was not eligible for the DMCA’s protection because it had not met the DMCA’s requirement of adopting and reasonably implementing a policy for terminating the accounts of repeat infringers in appropriate circumstances. After a trial, the jury found Cox contributorily liable for copyright infringement, and assessed $25 million in damages. Cox appealed to the Fourth Circuit.