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After a Virginia jury ordered internet provider Cox to pay $1 billion in damages for failing to take appropriate actions against pirating subscribers, shockwaves rippled through the ISP industry.<\/p>\nAfter a Virginia jury ordered internet provider Cox to pay $1 billion in damages for failing to take appropriate actions against pirating subscribers, shockwaves rippled through the ISP industry.<\/p>\n
The verdict, in favor of major record labels including Sony and Universal, was a catalyst for many other \u2018repeat infringer\u2019 lawsuits. This resulted in yet more multi-million dollar claims and awards, with more still in the pipeline today. <\/p>\n
Meanwhile, Cox did all it could to fight the verdict. This resulted in some small wins, including a recent ruling that the billion-dollar damages calculation needs a re-evaluation. However, the liability ruling stands. <\/p>\n
In a final attempt to find the law on its side, Cox petitioned the U.S. Supreme Court last year. In essence, it argued that an ISP shouldn\u2019t be held liable simply because it knew that subscribers were pirating, while challenging the assertion that merely knowing about subscriber piracy constitutes \u2018willful\u2019 copyright infringement. <\/p>\n
The Supreme Court signaled interest but before a decision to take the case on, the Court asked for the Government\u2019s position on the matter. The request was honored two weeks ago. <\/p>\n
The Solicitor General\u2019s amicus curiae brief sides with Cox and urges the Supreme Court to grant the ISP\u2019s position. This isn\u2019t just in the interest of Cox, but also other ISPs and the public at large.<\/p>\n
According to the U.S. Government\u2019s view, an ISP is not automatically liable for copyright infringement if it fails to terminate subscribers after receiving copyright infringement notices. The brief states that the verdict of the Court of Appeals could have broad negative implications for ISPs and their subscribers.<\/p>\n
The U.S. further argues that Cox\u2019s actions were not willful, as \u201cwillfulness\u201d generally requires knowledge or reckless disregard that the defendant\u2019s own conduct was unlawful. Simply knowing about third-party infringements should not be sufficient.<\/p>\n
Aside from fully backing Cox, the Solicitor General also urged the Supreme court to deny the record labels\u2019 petition. The labels argued that Cox should be held liable for vicarious copyright infringement because it profited from piracy that it could have prevented.<\/p>\n
The U.S. position gave Cox and other ISPs reason to feel more positive about an eventual turnaround. Grande Communications, for example, wasted no time citing the Government\u2019s position in its final remarks for its own, separate, Supreme Court petition. <\/p>\n
In a supplemental filing at the Supreme Court, the record labels characterize the Solicitor General\u2019s recommendation as \u2018bewildering\u2019, given the evidence on record. In a direct, point-by-point rebuttal to the U.S. brief, the labels attempt to set the record straight.<\/p>\n<\/p>\n
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<\/center><\/p>\nThe brief argues that Cox\u2019s contributory liability for copyright infringement is \u2018straightforward\u2019 and does not warrant Supreme Court review because Cox would face liability \u2018In Any Jurisdiction\u2019.<\/p>\n
\u201cCox was held liable not because it failed to do enough to police infringement, but because it took no meaningful steps to stop infringement and continued serving specific, identifiable subscribers even after receiving explicit notice of their repeat (and often rampant) infringement,\u201d they write. <\/p>\n
The record labels focus more on the broader context that, in their view, shows that Cox \u2018willfully\u2019 decided to let repeat infringements slide because subscribers earn them revenue. <\/p>\n
The ISP did not meaningfully implement a policy \u2018for the termination in appropriate circumstances of repeat infringers\u2019 and lost its safe harbor as a result. <\/p>\n
\u201cThis rebuttal is amplified by evidence of Cox\u2019s alleged culpability and disdain for the law, including an expletive quote from an internal communication,\u201d the rebuttal reads. <\/p>\n
\u201cCox kept supplying the means of infringement because it said \u2018F the dmca!!!\u2019 and adopted an express policy of prioritizing profits from subscription fees over compliance with the Copyright Act or the DMCA.\u201d <\/p>\n<\/p>\n
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<\/center><\/p>\nThe labels note that lower courts have been clear on liability cases like this, and argue that the recent Supreme Court Twitter v. Taamneh<\/em> ruling , which the U.S. cited, is not relevant in this context.<\/p>\n There is overwhelming evidence for Cox\u2019s willfulness, they say, adding that Cox didn\u2019t contest this finding during its appeal. Therefore, the petition should be denied, contrary to the U.S. Solicitor General\u2019s recommendation. <\/p>\n The record labels also disagree with the U.S. when it comes to their own Supreme Court petition, which argues that Cox should also be held liable for vicarious copyright infringement. The brief reiterates that there is a real split in the lower courts on this matter.<\/p>\n Cox can be held vicariously liable if it has the right and ability to control the infringing activities and a direct financial interest in those activities. According to the Solicitor General, the lower court correctly concluded that this is not the case here.<\/p>\n The labels, however, argue that Cox did profit directly from pirating subscribers, by declining to terminate repeat infringers, which kept the subscription fees coming in.<\/p>\n The labels\u2019 brief ends by asking the Court to deny Cox\u2019s petition while granting theirs, the direct opposite of the U.S. recommendation. However, the labels offer a fallback. If the Court is inclined to accept the Cox case, it should also accept theirs. <\/p>\n \u201cThe Court should grant Sony\u2019s petition and deny Cox\u2019s. If the Court disagrees, it should grant both,\u201d the record labels conclude. <\/p>\n \u2014<\/em><\/p>\n A copy of the supplemental brief, submitted to the Supreme Court this week by Sony et al. is available here (pdf)<\/a><\/p>\n From: TF<\/a>, for the latest news on copyright battles, piracy and more.<\/p>\nGrant Our Petition (or both\u2026)<\/h2>\n