A federal jury in Virginia has awarded a group of music recording companies (“Plaintiffs”) a $1 billion verdict against the Internet service provider (“ISP”) Cox Communications (“Cox”), finding that Cox was contributorily and vicariously liable for copyright infringement committed by certain subscribers on its networks.  In Sony Music Entertainment, et al. v. Cox Communications, the Plaintiffs alleged that Cox turned a blind eye to the unauthorized downloading and distribution of over 10,000 copyrighted works by Cox subscribers that had already received three or more infringement notices.  The court established that the “takedown” notices sent by the Plaintiffs provided Cox with the requisite knowledge of its subscribers’ repeated infringement to substantiate their claim that Cox was contributorily liable, meaning that Cox had specific enough knowledge of infringement that it could have done something about it.  The Plaintiffs’ notices to Cox identified the IP address of the subscriber, as well as the time of infringement and the identification of the infringed work, which was sufficiently specific knowledge for Cox to be able to identify the subscriber and to exercise its policy by suspending or terminating the infringing subscriber.  Cox failed to take action on these known repeat-infringers and the jury found Cox liable for willful contributory infringement and vicarious infringement, ordering Cox to pay over $99,000 for each of the infringed upon works.  Cox plans to appeal the decision.

In a similar case in 2018, the judge in BMG v. Cox ruled that Cox was not entitled to a Safe Harbor defense under the Digital Millennium Copyright Act (“DMCA”), which allows an ISP to avoid liability if it establishes and implements a subscriber termination policy for repeat infringers. In BMG v. Cox the judge found Cox’s “thirteen strike” policy, in which it would only consider terminating a subscriber’s service after a thirteenth infringement notice, to be unreasonable and concluded that Cox was not protected under the DMCA Safe Harbor provision because it knew several subscribers repeatedly infringed on BMG copyrights and did not terminate those subscribers’ service. Ultimately, Cox settled with BMG for $25 million.

These cases against Cox demonstrate the courts’ efforts to hold ISPs responsible for actively stopping infringement on their networks, setting a harsh precedent for many other ISPs that are being sued by copyright holders for infringement by their subscribers. A key takeaway from these cases is that ISPs cannot superficially rely on the DMCA’s Safe Harbor protections.  In order to assert the defense, ISPs must do more than just put into place a reasonable policy to terminate the service of infringing subscribers; ISPs must meaningfully enforce that policy.