Court Finds ISP Liable for User’s Copyright Piracy

December 21, 2015

broken copyright symbolFor reportedly the first time, a court has ruled that an Internet service provider (ISP) is responsible for copyright piracy engaged in by its customers.  The federal district court in the Eastern District of Virginia determined that the ISP, Cox, should pay $25 million to BMG Rights Management as compensation for multiple instances of copyright piracy by Cox customers.  This case puts ISPs and other online service providers on notice that the “safe harbor” provisions on the Digital Millennium Copyright Act (DMCA) do not provide absolute protection against liability for piracy.

The DMCA requires that ISPs and other online service providers implement systems through which copyright owners can protect their rights.  If the ISPs and online service providers provide effective processes through which copyright owners can assert and enforce their rights as to content made accessible by the service providers, then those service providers are protected against liability for copyright infringement.  This is the “safe harbor” provision of the DMCA.
The generally accepted copyright enforcement system is based on a “notice and takedown” approach.  ISPs establish a system through which copyright owners alleging misuse of their content can contact the ISP and the ISP commits to investigating the claims and, when appropriate, blocking access to the content in question.  ISP policies also routinely provide for termination of service to customers who engage in multiple instances of misuse of copyright protected material.

Matsuura Blakeley BannerIn the Cox case, evidence submitted at trial suggested that although Cox operated a “notice and takedown” system to protect copyrighted material, that system was not effectively enforced.  Reportedly, e-mail messages and other internal Cox documents revealed during the trial seemed to indicate that Cox did not consistently and rigorously enforce the “notice and takedown” process.

The evidence reportedly indicated that Cox staff routinely re-established service for customers who had their access terminated based on multiple instances of copyright piracy.  Documents made available at trial reportedly made it clear to the court that Cox placed the highest priority on retaining its customers, even when those customers were engaged in multiple piracy incidents.

Based on the internal documents, the court concluded that Cox engaged in conduct which constituted willful copyright infringement.  As a result of this finding, the court determined that Cox did not qualify for the protection from liability offered by the DMCA’s “safe harbor” provision, and was thus liable for the infringement.

This case underscores the different commercial priorities of online service providers and digital content owners.  The service providers have strong incentive to maximize the number of users of their services.  Content owners want to ensure that they receive fair compensation for all uses made of their material.  These different priorities can lead to conflict, as the Cox case illustrates.

The digital copyright enforcement system that has developed in the United States (a system which the U.S. is actively pushing other nations to adopt) places the bulk of the burden of copyright enforcement on ISPs and other online service providers, not on the owners of the copyrights.  Yet, it is clear that the commercial interests of those service providers are frequently not consistent with aggressive enforcement of copyright claims.  As this Cox case suggests, it is reasonable to expect more examples of conflict between ISPs and copyright owners in the future as the service providers rebel against the enforcement burden which has been shifted to them.