The Digital Millennium Copyright Act (DMCA) provides internet service providers (ISPs) with immunity from copyright infringement for the infringing activity of their customers. That immunity, found at 17 USC § 512(a), comes at a modest price: To qualify, the ISP must have “adopted and reasonably implemented. . . a policy that provides for the termination in appropriate circumstances of subscribers. . . who are repeat infringers.”
BMG Rights Management is the fourth-largest music publisher in the world, with over 2.5 million compositions and recordings in its library. BMG hired Rightscorp, Inc. to police its copyrights over the internet. When Rightscorp detected Cox Communications customers “sharing” BMG’s music, it emailed an infringement notice to Cox. Rightscorp began sending these notices in the spring of 2011.
Each notice identified BMG as the copyright owner, and provided the title of the copyrighted work, the infringer’s IP address, a time-stamp identifying the time and date of the infringement, and a settlement offer asking the infringer to pay $20 or $30 in exchange for a release. RIghtscorp asked Cox to forward each notice to the infringer, but Cox refused to do so because it objected to forwarding a settlement offer. Rightscorp refused to remove the settlement offer, and Cox never considered removing it on its own initiative.
In the fall of 2011, Cox decided to “blacklist” Rightscorp, meaning that Cox would delete incoming emails from Rightscorp without reading them. After the blacklisting, millions of notices from Rightscorp were ignored in this fashion.
Cox, it turns out, had a “13 strikes” policy to deal with repeat infringers. Going through the chain of up to 13 infringing activities, subscribers might be suspended temporarily, but never terminated. After the 13th infringing activity, the result was substantially the same–termination followed by reactivation. In fact, Cox had never terminated a subscriber for infringing activity without reactivating it.
The trial court granted BMG’s motion to disallow Cox’s attempt to raise the DMCA defense available to ISPs, holding that no reasonable jury could find that Cox implemented a policy that entitled it to the safe harbor that the DMCA provides to ISPs.
After a jury trial, BMG was awarded $25 million in damages for willful contributory infringement. Cox was ordered to pay an additional $8 million in attorneys’ fees.
On appeal, in BMG Rights Management v. Round Hill Music, the Fourth Circuit Court of Appeals upheld the trial court’s view of the DMCA safe harbor. It picked apart Cox’s argument that the obligation to terminate repeat infringers would apply only if an ISP had been presented with repeated adjudications of infringement. The Court of Appeals waded patiently through the history and text of the DMCA to discount this argument. It noted that Cox personnel had interviewed some of the infringers, who had admitted to infringing activity.
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