Lexplug logoLexplug

BMG Rights Management (US) LLC v. Cox Communications, Inc.

Court of Appeals for the Fourth Circuit
881 F.3d 293 (2018)
ELI5:

Rule of Law:

Contributory copyright infringement requires proof that the defendant knew of the infringing activity or was willfully blind to it; a negligence standard, where the defendant 'should have known' of the infringement, is insufficient to establish liability. Additionally, an Internet Service Provider (ISP) fails to 'reasonably implement' a repeat infringer policy, and thus forfeits the DMCA safe harbor, if it makes a deliberate decision not to enforce its own stated policy in any meaningful way.


Facts:

  • Cox Communications, Inc. ('Cox') is a major Internet Service Provider (ISP).
  • Some of Cox's subscribers used BitTorrent, a peer-to-peer protocol, to share copyrighted music files without authorization.
  • BMG Rights Management (US) LLC ('BMG'), a music publishing company, hired an agent, Rightscorp, to monitor BitTorrent for infringement and send notices to ISPs like Cox.
  • Cox established a thirteen-strike policy for subscribers who received infringement notices, but the strike counter reset every six months and termination was never automatic.
  • Prior to September 2012, Cox had an 'unwritten semi-policy' to immediately reactivate any subscriber terminated for copyright infringement.
  • After September 2012, Cox largely ceased terminating subscribers for infringement, with internal emails indicating a desire not to lose revenue.
  • Cox refused to process notices from Rightscorp because they contained settlement language and eventually 'blacklisted' Rightscorp, automatically deleting millions of notices without viewing them.

Procedural Posture:

  • BMG sued Cox in the United States District Court for the Eastern District of Virginia, alleging vicarious and contributory copyright infringement.
  • The parties filed cross-motions for summary judgment.
  • The district court granted summary judgment to BMG on Cox's DMCA safe harbor defense, ruling that Cox had failed to reasonably implement a policy for terminating repeat infringers.
  • The case proceeded to a jury trial on the infringement claims.
  • The jury returned a verdict finding Cox liable for willful contributory infringement and awarded BMG $25 million in statutory damages, but found Cox not liable for vicarious infringement.
  • The district court entered judgment in accordance with the verdict and denied Cox's post-trial motions.
  • Cox, as the appellant, appealed the judgment to the United States Court of Appeals for the Fourth Circuit, with BMG as the appellee.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does contributory copyright infringement require proof of at least willful blindness, making a jury instruction that includes a lower negligence standard (i.e., the defendant 'should have known' of the infringement) an error of law?


Opinions:

Majority - Judge Motz

Yes. A jury instruction that allows for a finding of contributory copyright infringement based on a negligence standard—that the defendant 'should have known' of the infringing activity—is an error of law because the correct standard requires actual knowledge or willful blindness. The court affirmed the district court's separate holding that Cox was not entitled to the Digital Millennium Copyright Act (DMCA) safe harbor. The court reasoned that a 'repeat infringer' under the statute is not limited to an adjudicated infringer, and Cox had failed to 'reasonably implement' its repeat infringer policy by systematically reactivating terminated accounts and deliberately ignoring millions of infringement notices from BMG's agent. However, the court reversed the jury's verdict on contributory infringement, holding that the 'should have known' standard is too low. Drawing on Supreme Court precedent in Grokster and patent law parallels in Global-Tech, the court concluded that liability for contributory infringement requires intent, which can be established by actual knowledge or its legal equivalent, willful blindness, but not by mere negligence. The instruction was also flawed for not requiring knowledge of specific instances of infringement, as generalized knowledge is insufficient. Because this erroneous instruction likely affected the verdict, a new trial was required.



Analysis:

This decision clarifies the intent standard for contributory copyright infringement in the Fourth Circuit, aligning it with patent law by rejecting a negligence standard in favor of actual knowledge or willful blindness. This raises the bar for plaintiffs seeking to hold intermediaries liable for user infringement. Simultaneously, the ruling reinforces that the DMCA safe harbor is not a mere formality; ISPs must meaningfully and consistently enforce their repeat infringer policies to receive its protection. The court's interpretation of 'repeat infringer' as not requiring prior court adjudication places a greater onus on ISPs to act on credible notifications of infringement to maintain their safe harbor eligibility.

G

Gunnerbot

AI-powered case assistant

Loaded: BMG Rights Management (US) LLC v. Cox Communications, Inc. (2018)

Try: "What was the holding?" or "Explain the dissent"