The Fourth Circuit recently raised the bar for one of the Digital Millennium Copyright Act (DMCA) safe harbor defenses in BMG Rights Management (US) LLC v. Cox Communications, Inc., No. 16-1972 (4th Cir. Feb. 1, 2018). BMG, which owns copyrights in musical compositions, alleged contributory copyright infringement by Internet service providers (ISPs) Cox Communications, Inc. and CoxCom, LLC (collectively "Cox").
The lower court held that Cox was not entitled to the safe harbor defense under Section 512(a) of the DMCA because Cox did not satisfy the conditions under Section 512(i)(1)(A). BMG Rights Mgmt. (US) LLC v. Cox Commc'ns, Inc., Case No. 1:14-cv-1611 (Aug. 8, 2016). That section requires ISPs seeking to avail themselves of the safe harbor defense to have "adopted and reasonably implemented . . . a policy that provides for the termination in appropriate circumstances of subscribers . . . who are repeat infringers." As we reported in August 2016, BMG won a $25 million jury verdict against Cox in this case.
On appeal, Cox argued it was entitled to the safe harbor provision "because 'repeat infringers' means adjudicated repeat infringers: people who have been held liable by a court for multiple instances of copyright infringement." Based on this narrow definition, Cox asserted it had complied with the safe harbor provision's requirement because BMG did not show Cox had failed to terminate any adjudicated infringers. The Fourth Circuit rejected Cox's narrow definition of "repeat infringer," however, and affirmed the lower court's denial of the safe harbor defense.
While doing so, the Fourth Circuit also reversed and remanded the case finding an erroneous jury instruction on contributory copyright infringement. Specifically, it found that the instructions permitted the jury to find Cox liable for contributing to copyright infringement if "it 'knew or should have known of such infringing activity,'" instead of requiring proof that Cox was at least willfully blind, a standard closer to actual knowledge. This ruling required remand for a new trial.
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