Major Labels’ Billion-Dollar Payday Under Fire As Cox Communications Challenges ‘Shockingly Excessive’ Damages Verdict

From Music Business Worldwide:

In December, a jury ruled that US-based internet service provider Cox Communications was liable for the infringement of over 10,000 music copyrights by its users. The company was ordered to pay Universal, Sony and Warner a whopping $1bn in collective damages – equivalent to just over $99,000 for each of the 10,017 works infringed.

. . . .

Cooper noted Warner’s satisfaction with the ruling, which he pointed out was the fifth largest U.S jury award in the whole of 2019, and which, he said, “clearly demonstrates that juries understand piracy is not okay”.

Cooper noted that WMG and/or the record industry had also brought similar cases against four other ISPs: Charter, Grande, RCN and Bright House, “all of which should proceed to trial within the next 12 to 18 months”.

. . . .

Cox Communications just lodged a fierce legal motion challenging the $1bn damages verdict – calling it “unprecedented”, and suggesting that the amount of money it’s being told to pay is “grossly excessive”.

According to a Memorandum filed Friday (January 31) by Cox and obtained by MBW, the company calls for one of two new outcomes – either a remittitur (i.e. a reduction in the amount of damages awarded) or an entirely new trial.

The Memorandum, filed with the Eastern District of Virginia Court, argues: “The $1 billion award is a miscarriage of justice; it is shockingly excessive and unlawfully punitive, and should be remitted or result in a new trial.”

Cox adds: “The award of $1 billion appears to be the largest award of statutory copyright damages in history. This is not by a matter of degree. It is the largest such award by a factor of eight.

. . . .

“It is the largest such award for secondary copyright infringement by a factor of 40. It is the largest jury verdict in the history of this District by a factor of more than 30.

“It is by any measure a shocking verdict, wholly divorced from any possible injury to Plaintiffs, any benefit to Cox, or any conceivable deterrent purpose.”

Cox argues that the $1bn damages verdict “exceeds the aggregate dollar amount of every statutory damages award rendered in the years 2009-2016 by more than four hundred million dollars”.

The firm cites what it calls the three previous biggest copyright statutory damages awards in the States: (i) Atlantic Recording v. Media Group Inc in 2002 ($136m); (ii) Disney Enters., Inc. v. Vidangel, Inc in 2019 ($62.4m); and (iii) UMG Recordings, Inc. v. MP3.Com, Inc in 2000 ($53.4m).

Cox posits that all three of these verdicts “were rendered against direct infringers — people who actually misappropriated the copyrighted material for their own use and profit”. In most cases, it says, these infringers “were conducting businesses based upon copyright infringement” making them “adjudicated pirates”.

. . . .

As an ISP, Cox argues that such an accusation does not apply to its business, suggesting that rather than being a “direct infringer”, it should instead be classified as a “secondary infringer” in the December ruling.

Cox then points out that the largest statutory damages ever awarded against a secondary infringer happens to be against itself – $25m in BMG Rights Mgmt. LLC v. Cox Communications, Inc. (2015).

“The $1 billion award thus appears to be the largest ever against a [secondary] infringer situated like Cox — by a factor of 40,” it says.

Link to the rest at Music Business Worldwide