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ISP and music publishers squabble over financial data in safe harbour test case

By Chris Cooke | Published on Wednesday 1 April 2015

As the so called safe harbour rules protecting tech firms from liability for copyright infringement are debated in Europe, a legal case in the US testing similar principles there continues to go through the motions.

As previously reported, late last year BMG and Round Hill Music sued American cable company Cox Communications over its alleged inaction in forwarding warning letters to suspected file-sharers. The music firms argued that by failing to act after being alerted to piracy on its networks, Cox should lose its safe harbour protections and be held liable for the copyright infringement of its customers.

Most of the big ISPs in America signed up to the Copyright Alert System, a voluntary programme that sees net firms forwarding warning letters to customers suspected by music and movie companies of accessing content from unlicensed sources. Cox was the biggest of the net companies not to participate in that programme, instead saying it had its own system in place to deal with suspected file-sharers. But BMG and Round Hill argue that that system is decidedly and possibly deliberately mediocre.

And while there isn’t a specific law in the US that obliges ISPs to take part in any letter-sending anti-piracy programmes (unlike in the UK, where the Digital Economy Act does obligate net firms in this way), the music publishers reckon that Cox’s failure to act when made aware of its file-sharing customers should impact on the safe harbour protections that stem from the Digital Millennium Copyright Act, and which say that tech firms that inadvertently and unknowingly enable others to infringe can’t themselves be held liable for the infringement.

As the case develops, both sides are busy seeking information from the other party that might aid their case. According to Torrentfreak, Cox is seeking clarification over the exact ownership of the songs BMG and Round Hill claim have been infringed by its customers, while trying to pick holes in the way anti-piracy firm Rightscorp monitors its networks on behalf of the music publishing firms.

Meanwhile the music publishers have asked for all the specifics about Cox’s anti-piracy policies, as well as information about the company’s financials. The latter is needed, says BMG and Round Hill, to inform their argument that Cox has a financial incentive in turning a blind eye to piracy on its networks, and to ascertain what damages might be due if they were to win the case.

Perhaps unsurprisingly, Cox ain’t so keen in providing that financial information, and so the publishers have filed a motion with the courts demanding the ISP comply.

They argue: “The financial information that Cox refused to produce is directly relevant to Cox’s strong motivation for ignoring rampant infringement on its network because ignoring this infringement results in a financial benefit to Cox. Moreover, Cox’s financial motivation for refusing to take meaningful actions against its repeat infringing customers is important to both the knowledge element of contributory infringement and the financial benefit element of vicarious liability”.

But Cox is standing its ground, arguing that the music firms’ request for financial information was way too wide, and basically amounts to wanting to see “virtually every financial record that Cox maintains about its internet customers and its provision of internet services”. Saying it would be happy to comply with more specific requests, the cable company says in its response to the latest motion: “The plaintiffs have never offered to entertain even minor limitations to the scope of their discovery requests, making any compromise effectively impossible”.

The court is yet to rule on what data must be shared.