In a major plot twist, the 4th Circuit Court of Appeals reversed a jury verdict of $25 million for BMG, and remanded the case for a new trial.
BMG filed the case against Cox back on November 26, 2014 alleging Cox was vicariously and contributorily liable for its subscribers acts of copyright infringement. At the end of the trial the jury found that Cox was liable for willful contributory infringement and awarded BMG a cool $25 million. Then Cox, following the footsteps of any loser, appealed the judgement. Cox claimed that there were many errors with the case, but importantly argued it was protected by the Safe Harbor provision of the Digital Millennium Copyright Act (“DMCA”), and jury instruction errors.
The Safe Harbor is not a trendy place to dock a yacht, but rather a rule that protects Internet Service Providers (“ISPs”) from being held liable for all of the things its users do with its internet service. This rule makes a lot of sense, and anyone who has ever provided internet for a small business, school, or family can attest to the difficulty in making sure people use the internet appropriately.
To get this protection under the DMCA, ISPs “must have adopted and reasonably implemented a policy that provides for the termination in appropriate circumstances of subscribers who are repeat infringers.” AKA ISPs have to have some type of system for making sure its users are not doing shady things, and actually terminate their internet under appropriate circumstances.
The 4th Circuit agreed with the jury that Cox did not qualify for this protection because Cox had a forgiving thirteen strike policy and “very clearly determined not to terminate subscribers who in fact violated this policy.”
So, now that it established that Cox did not have the shield of the Safe Harbor (again, thirteen strikes), the 4th Circuit had to see if the jury was properly instructed on the intent necessary to prove contributory infringement.
Here, the jury was instructed that in order to find Cox guilty, it would have to determine “that it knew or should of known of such infringing activity” (i.e. negligence). The 4th Circuit agreed with Cox and held that “providing contributory infringement requires proof of at least willful blindness; negligence is insufficient.” This means that at the very least, Cox must have consciously avoided learning about specific instances of infringement.
Basically, ISPs need to have actual knowledge of the infringement or consciously avoid learning about the specific infringement.
The new trial will hopefully take some of the grey areas out of the Copyright Law, but let’s never forget that the case ain’t over until the fat lady appealed.