An appellate court tossed a $25 million verdict against Cox Communications in a trial over internet music piracy but ordered the case to be retried without the cable company’s wish that it have safe harbor protections.
A three-judge panel on the 4th Circuit Court reversed a 2015 Virginia federal court decision on a 2014 lawsuit filed against the privately held MSO by music label BMG, which argued that Cox was negligent in stopping its subscribers from illegally sharing copyrighted music over the internet.
The appeals court panel ruled that the Virginia court jury received improper instructions. Specifically, the jury was told it could find Cox liable for contributing to the copyright infringement if it “knew or should have known of such infringing activity.” The appeals court ruled that “should have known” is too low of a legal standard.
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The ruling is mixed for Cox, however, with the panel throwing out the operator’s core defense.
Cox defended itself by arguing that it has protection under federal copyright safe harbor provisions, which immunize ISPs from liability related to user activities. But the provisions only apply if the ISP has and enforces policies related to repeat offenders.
BMG won the lower court verdict with a smoking gun: emails from Cox executives in which they appeared to discuss ways around rules requiring them to police their customers. Cox attorneys argued to the panel of Appeals Court judges that not only did Cox not have knowledge of the specific infringements on BMG content, the emails didn’t include Cox executives talking about the music label specifically, either.