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Net firm Cox ordered to pay $8 million more to BMG

By Chris Cooke | Published on Thursday 16 February 2017

The National Music Publishers Association in the US has welcomed a ruling in the BMG v Cox case that has added an extra $8 million to what the latter will have to pay the former.

As previously reported, BMG sued US internet service provider Cox arguing that the net firm had such a dodgy procedure for dealing with repeat infringers amongst its customer base that it should lose its safe harbour protection. The safe harbour is the thing that says net firms can’t be held responsible for the copyright infringement of its customers providing it takes measures to stop infringing activity once made aware of it.

In court, BMG presented evidence which showed that while Cox publicly said it fulfilled its obligations under safe harbour rules, behind the scenes it deliberately turned a blind eye to repeat infringers so as not to lose their custom. The court sided with BMG and ordered Cox to pay $25 million in damages. The ISP is currently busy appealing that ruling.

Meanwhile, having inflicted the injury and reckoning it could now have a go at insult, BMG asked the court to force Cox to pay its legal bills in relation to the case, which topped $10 million. And while judge Liam O’Grady knocked a little off that sum, he has still told Cox to pay the music company a further $8,383,468.

However, more interesting were O’Grady’s disparaging comments about Cox’s case, in which he basically said that the net firm shouldn’t have fought the action given its useless arguments, and that’s why it is justified to have the company now pay much of BMG’s legal costs.

Said the judge: “In a hard-fought litigation battle such as this one, discovery disputes and fierce briefing are to be expected, and they should not be held too harshly against either party. Nonetheless, there are a few instances in which Cox’s advocacy crossed the line of objective reasonableness. In particular, both Cox’s attempts to obscure its practice of reinstating infringing customers, and its subsequent assertions of a deeply flawed DMCA defence evince a meritless litigation position that Cox vigorously defended”.

The “DMCA defence” that evinced a meritless litigation, as it were, refers to the net firm’s interpretation of the US Digital Millennium Copyright Act, which contains America’s safe harbour provisions. The judge added that he hoped the extra costs to the internet company stemming from this litigation would provide an incentive to sort out its procedures for dealing with its infringing customers, so to avoid further legal action. Though you might have thought the $25 million in damages had already done that.

Speaking for the American music publishing sector, NMPA boss David Israelite welcomed both the latest ruling and BMG’s decision to sue in the first place. He told reporters yesterday: “The Eastern District Of Virginia’s awarding BMG over $8 million in attorneys’ fees underscores just how egregious Cox’s behaviour has been towards intellectual property owners, and this award – in addition to BMG’s $25 million win over Cox – is a victory for all copyright holders”.

He went on: “As defenders of music creators, we applaud BMG for standing up to mass music piracy enablers like Cox, and we echo Judge O’Grady’s words that awarding legal fees rewards plaintiffs like BMG ‘for facing up against wilful infringers with deep pockets’. The court’s firm renouncing of Cox’s conduct serves as a stern warning to web providers who turn a blind eye to music theft”.