This wasn't a huge surprise after Judge Liam O'Grady's questionable reading
of the DMCA a few weeks back (along with his general disdain
for the internet), but a jury yesterday awarded BMG $25 million from Cox Communications
, claiming that Cox was guilty of willful "contributory infringement"
in not kicking accused file sharers off the internet. The jury found Cox not guilty
of "vicarious liability," which is at least marginally surprising, as many people who don't spend their lives wrapped up in copyright law have difficulty distinguishing the difference between "contributory infringement" and "vicarious" (if you're confused too, Wikipedia's overview
is a decent place to start). And based on that, the jury hit Cox with the $25 million award for BMG.
This will undoubtedly go to appeal, and it would seem that Cox has some pretty strong arguments. First up, the original decision that Cox is not subject to the DMCA's safe harbors is a highly questionable ruling, and would go against a number of previous rulings. As noted previously, some of Cox's actions did seem somewhat egregious, but this still involves a previously untested argument that the policy of requiring service providers to have a plan to terminate users applies to network service providers, rather than those who host
content. That's a pretty big open question -- and how that issue is resolved will have a major impact on how the internet functions going forward. If Judge O'Grady's ruling stands, then the RIAA and MPAA just got a huge golden gift: it would effectively say that the US has a "three strikes"-like law where people can be kicked off the internet entirely, based solely on accusations of copyright infringement. That's a pretty scary result.
Even separate from that, the idea that Cox, an internet service provider, is guilty of "contributory liability" for infringement seems difficult to believe as well. The standard for contributory copyright infringement is basically one who "knowingly induces, causes or materially contributes" to copyright infringement done by someone else where
that party "had knowledge, or reason to know, of infringement." So, in this case, the argument is that based on the notifications, Cox had the necessary knowledge of the infringement, and then "materially contributed" to that infringement by continuing to provide service. But, again, that's a huge stretch, and goes way
beyond historical examples of contributory infringement, where you had things like Grokster, that actively advertised its software as being useful for infringement. In this case, all Cox did was not terminate
users, and somehow that counts as "materially contributing" to infringement?
Again, if that stands, it has tremendously troubling implications for how the internet functions, and the ability of people to use copyright law to wreak havoc on the lives of others. We're talking about opening up the possibility of going way beyond the standard DMCA takedowns of content, to it becoming a weapon for killing internet access within households.
The $25 million verdict comes out to about $18,000 per each of the 1,397 copyrights listed in the case -- which is certainly less than the statutory maximum possibility of $150,000 per infringement. But, still... Either way, it's almost certain that Cox will appeal, and that's when the case will start to get a lot more interesting.