On February 1, 2018, the U.S. Court of Appeals for the Fourth Circuit issued a decision in the case, BMG Rights Management LLC v. Cox Communications, Inc. The Fourth Circuit affirmed in part the district court’s granting of summary judgment to BMG on the § 512(a) Digital Millennium Copyright Act (DMCA) safe harbor defense. The court also reversed in part and remanded for a new trial because of errors in the jury instructions.
Ultimately, the Fourth Circuit agreed with the district court’s decision that Cox was not entitled to the safe harbor defense, finding that Cox’s 13-strike policy for repeat infringers was effectively no policy at all, and far less than the termination policy required in order to maintain safe harbor protections.
Plaintiff BMG, an owner of copyrights in musical compositions, filed suit against Cox for copyright infringement. BMG sought to hold Cox, a high-speed Internet service provider (ISP), vicariously and contributorily liable for the infringing activities of Cox’s subscribers.
BMG alleged that some of Cox’s roughly 4.5 million subscribers shared and received copyrighted files using BitTorrent. BitTorrent, a communication protocol for peer-to-peer file sharing, allows users to directly transfer files to another’s computer over the Internet. BitTorrent transfers often involve unauthorized sharing of copyrighted music and video files.
BMG employs a third party called Rightscorp, Inc., to monitor BitTorrent for infringing activity of BMG’s rights. Upon notice of infringing conduct, Rightscorp emails an infringement notice to the infringing user’s ISP and requests the ISP to take action against the user. In 2011, Cox “blacklisted” Rightscorp and its infringement notices after Rightscorp refused to remove settlement language in its notices to Cox. In essence, when Cox received the millions of Rightscorp infringement notices, Cox either deleted the notices or took no action against the infringing users.
The court found Cox’s policies for terminating subscribers participating in infringing activities was insufficient to qualify for safe harbor protection. The DMCA’s safe harbor provision, 17 U.S.C. § 512(a), requires an ISP to adopt and reasonably implement a policy to terminate subscribers who are repeat infringers.
Cox uses an automated system for terminating user accounts that rests on a 13-strike policy, which Cox resets every six months. The Fourth Circuit explained:
Cox’s automated system rests on a thirteen-strike policy that determines the action to be taken based on how many notices Cox has previously received regarding infringement by a particular subscriber. The first notice alleging a subscriber’s infringement produces no action from Cox. The second through seventh notices result in warning emails from Cox to the subscriber. After the eighth and ninth notices, Cox limits the subscriber’s Internet access to a single webpage that contains a warning, but the subscriber can reactivate complete service by clicking an acknowledgement. After the tenth and eleventh notices, Cox suspends services, requiring the subscriber to call a technician, who, after explaining the reason for suspension and advising removal of infringing content, reactivates service. After the twelfth notice, the subscriber is suspended and directed to a specialized technician, who, after another warning to cease infringing conduct, reactivates service. After the thirteenth notice, the subscriber is again suspended, and, for the first time, considered for termination. Cox never automatically terminates a subscriber.
Who Qualifies as Repeat Infringers
The DMCA does not define the term repeat infringers, so Cox argued that the safe harbor provisions only required that it delete the accounts of those specifically adjudicated as infringers. The Fourth Circuit panel rejected this argument, pointing out that the Copyright Act uses the term “infringer” to refer to all those who engage in infringing activity, and not just the narrow subset of those who have actually been so adjudicated as infringers by a court. The Court further found that the Legislative History clearly evidenced an intent to take Internet access away from those who repeatedly engage in infringing activity regardless of whether there was actually an adjudication in court.
Because Cox failed to terminate the accounts of its repeat infringers despite being on notice to the infringing activities, the Court found that Cox could not benefit from safe harbor protections of the DMCA.
In view of this decision, it will be interesting to see whether other ISPs adopt more stringent policies to crack down on repeat infringers.