Judge sides with Rightscorp, says DMCA doesn’t protect Cox

Nearly a year after two music publishers and online copyright cop Rightscorp initiated a high-stakes lawsuit against Cox Communications, a judge has made a ruling that's potentially devastating to Cox's case.

US District Judge Liam O'Grady has ruled that Cox isn't protected by the Digital Millennium Copyright Act's "safe harbor" provisions. That's the part of the DMCA that protects "online service providers" from copyright lawsuits if they comply with various parts of the DMCA, including the obligation to terminate "repeat infringers." Now one of the music publishers, BMG Rights Management, will move toward a trial slated to start December 2.

BMG is using data from Rightscorp to make its case that Cox blew off its legal obligations to help copyright owners. In the original lawsuit (PDF), plaintiffs BMG Rights Management and Round Hill Music argued that the Rightscorp data allows them to identify "repeat infringers" that use BitTorrent to download large quantities of music. Rightscorp insists that ISPs like Cox must respond when it identifies those users and forward its notices demanding $20 per song or else face a copyright lawsuit. After a few years of such data collection, two of Rightscorp's biggest clients finally acted on that threat, filing suit against Cox in 2014.

O'Grady hasn't yet published his full opinion, but a two-page order (PDF) published Thursday makes it clear that he doesn't believe Cox is protected by the DMCA. "There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy" as required by the law, O'Grady wrote. How the judge reached that conclusion matters a great deal. When he publishes his full opinion, it will be scrutinized closely by copyright lawyers and tech companies.

What's clear at this point is that Cox is heading into a trial in an unfriendly environment, with a judge that has already sided with the copyright holders on the key point. While judges have repeatedly shuttered file-sharing sites for aiding and abetting piracy, there's little precedent for trying to hold an ISP responsible for piracy by its users. At trial, Cox is likely to stress that the Rightscorp data represents only an accusation that particular users have broken copyright laws, not definitive proof.

A loss by Cox could have widespread effects on how piracy gets managed by US courts, since accusations of piracy—even ones with no judicial finding of infringement—could be used to haul ISPs into court. Seeking to avoid that situation, a whole lot of ISPs are likely to start marching to the beat of Rightscorp's drums. And Rightscorp has made clear that its treatment for pirates will be harsh, up to and including disconnection from the Internet.

“Reasonable” response?

In a strongly worded rebuttal (PDF) to BMG's accusations, Cox described Rightscorp as selling "shady services" to copyright owners. Rightscorp "shakes down ISP customers for money without regard to actual liability, and it tries to enlist ISPs in its scheme," Cox lawyers write. The ISP doesn't act on Rightscorp's notices because they're "wrongful" and inadequate, but Rightscorp kept dumping "thousands of notices per day" on the ISP. When Cox wouldn't get on board, Rightscorp and its biggest client sued. "This suit is Rightscorp's retribution, with Plaintiffs’ complicity, for Cox’s refusal to participate in Rightscorp’s scheme," state Cox lawyers.

Cox "works well with many copyright holders," but considered Rightscorp notices "improper, as involving extortion and blackmail." In a mostly redacted section of its legal brief, Cox describes its system of "graduated response" for responding to allegations of copyright infringement. Cox notes that account termination is "not the industry norm" but goes on to emphasize that it does, in fact, terminate some account holders because of copyright complaints. But "the decision requires discretion," since some subscribers don't understand what gave rise to copyright complaints and may need help keeping their Internet access secure, or removing malware, before the company takes the "extreme measure of termination."

On the whole, Cox argued its procedures are "reasonable" and that Rightscorp's notices were properly blacklisted because they were deceptive. "For non-blacklisted complainants, Cox takes some action, although not always a customer-facing action, on 100% of copyright complaints it receives," the company's lawyers wrote (emphasis in original.)

Clearly, those arguments didn't win over the judge's favor, although it isn't yet known exactly why not. However the trial turns out, it's hard to imagine Cox won't appeal O'Grady's decision if the litigation continues, assuming there's no settlement. 

While O'Grady sided with BMG on the key DMCA point, he kicked the other plaintiff, Round Hill Music, out of the lawsuit. Round Hill didn't prove it owns exclusive rights with regard to "any of the copyrights at issue," O'Grady found, and thus doesn't have standing to bring an infringement lawsuit. As with the DMCA issue, the judge's reasoning won't be clear until his full opinion is published.

Further evidence that O'Grady isn't seeing things Cox's way comes from the fact that the judge wouldn't allow the Electronic Frontier Foundation and Public Knowledge to file an amicus brief supporting Cox. In fact, O'Grady went out of his way to slam that brief.

"It adds absolutely nothing helpful at all," O'Grady said of the EFF brief, according to Techdirt, based on a transcript of the October hearing. "It is a combination of describing the horrors that one endures from losing the Internet for any length of time. Frankly, it sounded like my son complaining when I took his electronics away when he watched YouTube videos instead of doing homework. And it's completely hysterical."