06 February 2018
Reporter: Barney Dixon

New trial ordered in BMG v Cox

The US Court of Appeals for the Fourth Circuit has overturned a $25 million damages award for BMG Rights Management and ordered a new trial in its dispute with Cox Communications, but maintained that Cox had foregone its safe harbour defence.

In August 2016 Cox was held liable for the copyright infringement of its users in a ruling at the US District Court for the Eastern District of Virginia.

Cox had also been denied its safe harbour defence under the Digital Millennium Copyright Act (DMCA) in 2015 due to its failure to terminate the accounts of its infringing customers.

Safe harbours, under the DMCA, protect internet service providers (ISPs) from the consequences of their users' actions, provided the ISP implements a policy that provides for the termination of repeatedly infringing user accounts.

Cox appealed the earlier decisions, arguing that the district court erred in denying its safe harbour defence and incorrectly instructed the jury.

The ISP said: “In the court’s view, ‘repeat infringer’ could cover someone who has not been legally determined to be an infringer—even though the DMCA elsewhere repeatedly refers to ‘claimed’ or ‘alleged infringement’.”

The Fourth Circuit’s ruling held that Cox was not entitled to a safe harbour defence and rejected its argument that the term “repeat infringers” was limited to adjudicated infringers.

Judge Diana Motz, who wrote the opinion for the court, said that Cox had “failed to qualify for the DMCA safe harbour because it failed to implement its policy in any consistent or meaningful way—leaving it essentially with no policy”.

However, Motz agreed with Cox’s argument that the district court had erred in instructing the jury that Cox could be found liable for contributory infringement if it “knew or should have known of such infringing activity”.

She said: “Because there is a reasonable probability that this erroneous instruction affected the jury’s verdict, we remand for a new trial.”

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