termination policy – Techdirt (original) (raw)

from the they-always-hated-the-internet dept

The RIAA just won’t quit in attacking users on the internet and trying to get them banned from using the internet entirely. The latest news is that all the major record labels have sued Verizon for not kicking users the RIAA accuses (but has not litigated) of being infringers off the internet.

But, there’s a long history here that needs to be understood to see why this case is so stupid and so dangerous to the internet.

Twelve years ago, we wrote about a secret plan by the RIAA to pretend that copyright law already required that ISPs shutdown the internet accounts of users caught infringing. The relevant copyright law, DMCA 512, does have an awkwardly worded section on “termination.” Specifically, it says that to be eligible for the DMCA safe harbors, a site:

has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers; and

However, it provides no more guidance about many of the important definitions in there. What is “reasonably implemented?” What is “appropriate circumstances?” What constitutes “repeat infringers?”

While some people claim that the last question, in particular, is easy to determine, it’s not. False claims of copyright infringement are made all the time, as we’ve seen with DMCA claims (or even just YouTube’s ContentID). Sometimes, it’s for anti-competitive purposes. Sometimes it’s just to make life difficult for someone. Often, it’s because automated systems have gone haywire.

The only real way to know if someone is a “repeat infringer” is not based on a claimed copyright holder sending notices, but on a court ruling that an individual infringed on someone’s copyright. A service provider could have actual knowledge of infringement only after it has been adjudicated by a court.

However, some copyright holders disagree.

As is their wont, the RIAA has decided that all of these should be decided in the most extreme way possible, which is that if the RIAA sends a bunch of infringement notices to a service provider, that ISP should kick users off the internet entirely.

There are all sorts of problems with this. First, under the Supreme Court’s Packingham decision, it’s reasonable to argue any law that kicks people off the internet as a requirement is inherently unconstitutional. As Justice Kennedy wrote in that decision, citing Ashcroft v. Free Speech Coalition, “It is well established that, as a general rule, the Government ‘may not suppress lawful speech as the means to suppress unlawful speech.’”

Yet, as we’ve described for decades, when it comes to copyright, the courts show an uncanny willingness to ignore any First Amendment concerns and to give the industry all the power (rather than the public, who copyright law is supposed to benefit).

Given all that, the recording industry sued Cox Communications for failing to “reasonably implement” a policy to “terminate… repeat infringers.” That case was kind of a mess from the very start. It involved a firm, Rightscorp, that was famous for sending piles of questionable infringement notices based on flimsy evidence of infringement. The case ended up before a famously cranky judge, Liam O’Grady, who made it clear that he did not care about the public interest, or even the purpose of the DMCA.

It didn’t help that Cox’s own policies for handling copyright complaints were a bit of a mess, but O’Grady seemed wholly uninterested in the details and nuances and ruled against Cox. The case has bounced around for years, with the 4th Circuit Appeals court occasionally making a mess of things, occasionally fixing small parts of the lower court’s nonsense.

Earlier this year, the 4th Circuit threw out the massive $1 billion award that a jury had given the labels, saying the amount was not justified. But the case is still something of a mess, as Cox still believes (correctly, in my opinion) that it’s not violating the law at all. I believe that next month, both sides are planning to request the Supreme Court take a look. The labels will want the giant damages reinstated, while Cox will be arguing that the entire thing is ridiculous and it did nothing wrong.

Either way, the record labels apparently don’t want to wait for the Supreme Court to sort all this out. They have moved forward with a similar lawsuit against Verizon, one of the country’s largest ISPs, making the same basic arguments. The RIAA is always good about telling narratives:

The scope of repeat infringement on Verizon’s network is staggering. Thousands of Verizon subscribers were the subject of 20 or more notices from Plaintiffs, and more than 500 subscribers were the subject of 100 or more notices. One particularly egregious Verizon subscriber was single-handedly the subject of 4,450 infringement notices from Plaintiffs alone.

Verizon acknowledged that it received these notices of infringement sent by Plaintiffs’ representatives. Yet rather than taking any steps to address its customers’ illegal use of its network, Verizon deliberately chose to ignore Plaintiffs’ notices, willfully blinding itself to that information and prioritizing its own profits over its legal obligations.

It is well-established law that if a party materially assists someone it knows is engaging in copyright infringement, that party is fully liable for the infringement as if it had infringed directly. Further, when a party has a direct financial interest in the infringing activity, and the right and practical ability to stop or limit it, that party also faces liability. Flouting those basic responsibilities, Verizon deliberately turned a blind eye to its subscribers’ infringement. Verizon failed to terminate or otherwise take any meaningful action against the accounts of repeat infringers of which it was aware. Instead, Verizon routinely thumbed its nose at Plaintiffs by continuing to provide its service to subscribers it knew to be serially infringing Plaintiffs’ copyrighted sound recordings. In reality, Verizon operated its service as an attractive tool and safe haven for infringement.

And, so, of course, many of the headlines will be about that kind of narrative.

But, as always, it’s way more complicated than that. Just because someone sends notices does not mean that infringement has actually happened. I mean, this is the RIAA we’re talking about, and they have a bit of a history of sending trash, bogus DMCA notices. Or, a history of suing over songs it doesn’t hold the copyright on. Or on making totally baseless accusations about copyright infringement based on whims.

It’s only natural for a company like Verizon to choose to view RIAA notices with suspicion and not immediately assume they’re proof of infringement.

Anyway, given the status of the Cox fight and the decent chance the Supreme Court will take that issue up (not guaranteed, of course, but it wouldn’t be surprising), this case might end up sitting around while we wait for the Supreme Court to (hopefully, but unlikely) get these issues sorted out in that case first.

Either way, the RIAA is up to their usual anti-internet tricks. While they frame it as Verizon somehow ignoring notices, don’t believe that narrative. This is about the RIAA overclaiming copyright powers and trying to get people kicked off their entire internet connection (which is so necessary these days) for daring to download some songs.

Filed Under: copyright, dmca, isps, repeat infringer, termination policy
Companies: cox, riaa, sony, sony bmg, umg, universal music group, verizon

from the this-makes-no-sense dept

We’ve been following the BMG v. Cox lawsuit from the very beginning, through all its very odd twists and turns, including having a judge in the district court, Liam O’Grady, who made it quite clear that he didn’t much care about the internet, and didn’t see why it was a problem if people lost their internet access completely based on merely a few allegations of copyright infringement. The 4th Circuit appeals court has now overturned the lower court ruling and sent the case back to the district court for a do-over. While the initial decision was awful (as we discuss below), this new ruling makes a huge mess out of copyright law and will have serious, dangerous, and long-lasting consequences for the internet as a whole.

If you don’t recall, the case involved BMG suing Cox Communications, though much of the case really hinged on the actions of another company, Rightscorp, who has been trying (and mostly failing) to build a business model around a form of mild copyright trolling. Rather than the aggressive “sue ’em and settle,” strategy employed by others, Rightscorp would send DMCA takedowns to ISPs, with a settlement offer, and hope that the ISPs would pass those notices on to subscribers accused of infringing.

Cox Communications — a decently large broadband provider — made it quite clear to Rightscorp that it did not intend to be a part of its business model, and refused to pass on the settlement letters. Rightscorp started flooding Cox with notices… to the point that Cox decided to effectively just trash all inbound messages from Rightscorp as spam. After all this happened, Rightscorp signed BMG as a client, and then sued Cox, claiming the ISP had violated the DMCA by not kicking users off. What came out during the trial was that Cox basically had a “thirteen strike” policy (some of the earlier strikes involved stopping internet access until you read something and clicked something — or requiring the user to call in to Cox).

What is rarely noted, of course, is that Cox was basically one of the only ISPs to actually have any termination policy for people who used their connections for copyright infringement. Most ISPs (and most copyright lawyers not working for legacy industry interests) believed that the DMCA’s requirement for a “repeat infringer policy” was not directed at access providers, but at content hosts, where the issues are much clearer. However, BMG claimed here that Cox violated the DMCA’s requirement for a repeat infringer policy — and the court agreed. Cox was, partly, undone by some pretty bad behavior behind the scenes, that seemed to tar it as a “bad actor” and obscure the underlying copyright issues. Even more ridiculous was that Judge O’Grady later argued that Cox should pay the other side’s legal fees, because even bringing up the idea that it was protected by safe harbors was “objectively unreasonable.” That, itself, was crazy, since tons of copyright experts actually think Cox was correct.

On appeal there were two key issues raised by Cox. The main issue was to argue that O’Grady was incorrect and that the DMCA safe harbors covered Cox. The second pertained to the specific jury instructions given to the jurors in the case. The new ruling unfortunately upholds the ruling that Cox is not covered by the DMCA’s safe harbors, but does say that the instructions given to the jury were incorrect. Of course, it then proceeds to make a huge muddle of what copyright law says in the process. But we’ll get to that.

The Impact on Safe Harbors

Let’s start with the safe harbors part of the ruling, which is what most people are focusing on. As the court notes, Cox (correctly, in my view), pointed out that even if it was subject to a repeat infringer policy, that should cover actual infringers, not just those accused of infringing. After all, it’s not like there aren’t tons upon tons of examples of false copyright infringement accusations making the rounds, and that’s doubly true when it comes to trolling operations. If the rule is that people can lose all access to the internet based solely on unproven accusations of infringement, that seems like a huge problem. But, here, the court says that it’s the correct way to read the statute:

Cox contends that because the repeat infringer provision uses the term ?infringer? without modifiers such as ?alleged? or ?claimed? that appear elsewhere in the DMCA, ?infringer? must mean ?adjudicated infringer.? But the DMCA?s use of phrases like ?alleged infringer? in other portions of the statute indicates only that the term ?infringer? alone must mean something different than ?alleged infringer,? otherwise, the word ?alleged? would be superfluous. Using the ordinary meaning of ?infringer,? however, fully accords with this principle: someone who actually infringes a copyright differs from someone who has merely allegedly infringed a copyright, because an allegation could be false. The need to differentiate the terms ?infringer? and ?alleged infringer? thus does not mandate Cox?s proposed definition.

Moreover, other provisions of the Copyright Act use the term ?infringer? (and similar terms) to refer to all who engage in infringing activity, not just the narrow subset of those who have been so adjudicated by a court. For example, § 501(a), which creates a civil cause of action for copyright owners, states that ?[a]nyone who violates any of the exclusive rights of the copyright owner? provided for in the statute ?is an infringer of the copyright or right of the author.? 17 U.S.C. § 501(a) (emphasis added).

Similarly, the DMCA itself provides that ISPs who store copyrighted material are generally not liable for removing ?material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.? Id. § 512(g)(1) (emphases added). This provision expressly distinguishes among three categories of activity: activity merely ?claimed to be infringing,? actual ?infringing activity? (as is apparent from ?facts or circumstances?), and activity ?ultimately determined to be infringing.? The distinction between ?infringing activity? and activity ?ultimately determined to be infringing? in ? 512(g) shelters ISPs from being liable for taking down material that is ?infringing,? even if no court ?ultimately determine[s]? that it is infringing ? because, for example, the copyright holder simply does not file a lawsuit against the person who uploaded the infringing material. As this provision illustrates, Congress knew how to expressly refer to adjudicated infringement, but did not do so in the repeat infringer provision.

Again, the obvious implications of this are… insane. It means that you can potentially get people completely kicked off the internet with a series of knowingly false accusations of copyright infringement. How could anyone justify that as a reasonable policy?

The court insists that the legislative history supports this… but the only way it does is if you torture the legislative history and ignore what it says. Here’s what the court says:

The legislative history of the repeat infringer provision supports this conclusion. Both the House Commerce and Senate Judiciary Committee Reports explained that ?those who repeatedly or flagrantly abuse their access to the Internet through disrespect for the intellectual property rights of others should know that there is a realistic threat of losing that access.? H.R. Rep. No. 105-551, pt. 2, at 61 (1998); S. Rep. No. 105-190, at 52 (1998). This passage makes clear that if persons ?abuse their access to the Internet through disrespect for the intellectual property rights of others??that is, if they infringe copyrights ? they should face a ?realistic threat of losing? their Internet access.

But, again, based on the ruling here, this still applies even if the accusations are totally false and no infringement occurred. The court seems to ignore the word “abuse” in this statement and doesn’t even bother to consider that there may be abuse on the other side — in the form of copyright trolling against non-infringers (or simply trying to harm or silence the speech of a non-infringer).

Next up, the court has to determine whether or not Cox’s repeat infringer policy was “reasonable.” This, itself, is a minefield. The law provides no guidance beyond that to qualify for the safe harbor the provider has to have “adopted and reasonably implemented… a policy that provides for the termination in appropriate circumstances of subscribers… who are repeat infringers.” That seems to leave an awful lot of discretion to the provider — which the court admits… before determining that it doesn’t think Cox’s policy was reasonably implemented. And this is where a few bad actions by Cox employees comes back to haunt the company:

Here, Cox formally adopted a repeat infringer ?policy,? but, both before and after September 2012, made every effort to avoid reasonably implementing that policy. Indeed, in carrying out its thirteen-strike process, Cox very clearly determined not to terminate subscribers who in fact repeatedly violated the policy.

The words of Cox?s own employees confirm this conclusion. In a 2009 email, Jason Zabek, the executive managing the Abuse Group, a team tasked with addressing subscribers? violations of Cox?s policies, explained to his team that ?if a customer is terminated for DMCA, you are able to reactivate them,? and that ?[a]fter you reactivate them the DMCA ?counter? restarts.? The email continued, ?This is to be an unwritten semi-policy.? Zabek also advised a customer service representative asking whether she could reactivate a terminated subscriber that ?[i]f it is for DMCA you can go ahead and reactivate.? Zabek explained to another representative: ?Once the customer has been terminated for DMCA, we have fulfilled the obligation of the DMCA safe harbor and can start over.? He elaborated that this would allow Cox to ?collect a few extra weeks of payments for their account. ;-).? Another email summarized Cox?s practice more succinctly: ?DMCA = reactivate.? As a result of this practice, from the beginning of the litigated time period until September 2012, Cox never terminated a subscriber for infringement without reactivating them.

One would hope that this part of the ruling would at least, somewhat, protect other ISPs that don’t send stupid emails like that. But, you never know.

The Messed Up Jury Instructions

To fully follow the issues here, we have to take a quick tour to key copyright cases of years past. In the Betamax Case, Hollywood sued the makers of VCR devices (okay, okay, Betamax devices) for selling a product that its customers used to infringe. In 1984, the Supreme Court said that was crazy, and since the VCR had “substanitial non-infringing uses,” it was legal to sell it, even if it was used to infringe. Almost 20 years later, the Supreme Court chopped away at this standard a bit in the unfortunate (and still wrong) Grokster case, that said even if the tool had substantial non-infringing uses, if the company “induced” infringement, then it could still be liable. But there had to be fairly strong evidence of actual inducement by the company — in Grokster, the company more or less encouraged people to infringe.

Cox asked the court to use the Betamax standard in the jury instructions, saying that it’s not contributory copyright infringement if there are substantial non-infringing uses — but the lower court rejected that, and this court does too, pointing to Grokster (but not actually groking what the Grokster court said). But a second complaint about the jury instructions does win the support of the appeals court. Cox, rightly, argued that the jury instruction telling jurors that the standard for contributory infringement was if the company “knew or should have known of such infringing activity.” The big problem here is the “should have known” part. That is not the law. It’s not in the law. It’s not supported by court decisions and has been rejected by numerous court decisions. And, here, the court finally gives Cox a break and says that those jury instructions went too far. “Should have known” is a negligence standard — it suggests even if you didn’t know, you were negligent in not knowing, and therefor still liable. But copyright law demands actual knowledge. And thus, the original ruling is thrown out and sent back to the court.

But… even with the jury verdict being tossed, this discussion is… weird. And troubling. Remember, the Grokster standard is about “inducement” which involved a level of intent on the part of the service provider. That’s about taking specific actions to encourage the use for infringement. But, the court here keeps slipping into a separate question of “knowledge.” The knowledge question and the inducement/intent question are two separate questions. But it’s not clear that the court even realizes that. It keeps going back and forth between questions about inducement and questions about actual knowledge, to the point that it almost appears the court thinks these are the same things. But knowledge alone is not enough to prove a party induced others to infringe on a copyright.

See the following discussion:

First, Grokster?s recitation of the standard?that ?[o]ne infringes contributorily by intentionally inducing or encouraging direct infringement? ? is on its face difficult to reconcile with a negligence standard. See 545 U.S. at 930 (emphasis added). In addition, it would have been unnecessary for the Court to discuss in detail the situations in which intent may be presumed, and those situations, like Sony, in which it may not, if liability did not require intent at all, but merely required negligence….

Looking to patent law, as the Supreme Court did in Sony and Grokster, further counsels against a negligence standard. The Supreme Court has long held that contributory patent infringement requires knowledge of direct infringement. Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 488 (1964). And in 2011, the Court held that willful blindness satisfies this knowledge requirement, but recklessness (?one who merely knows of a substantial and unjustified risk of . . . wrongdoing?) and negligence (?one who should have known of a similar risk but, in fact, did not?) do not. Global-Tech, 563 U.S. at 769?71. The Court reaffirmed this holding in 2015, stating that contributory patent infringement ?requires proof the defendant knew the acts were infringing,? and that Global-Tech ?was clear in rejecting any lesser mental state as the standard.? Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1928 (2015). The Court expressly rejected the possibility ?that a person, or entity, could be liable even though he did not know the acts were infringing.? Id. Thus, in the patent context, it is clear that contributory infringement cannot be based on a finding that a defendant ?should have known? of infringement.

In both Grokster and Sony, the Supreme Court adopted now-codified patent law doctrines? the staple article doctrine and the inducement rule. The Court did so because of ?the historic kinship between patent law and copyright law,? Sony, 464 U.S. at 439?42, and the similar need in both contexts to impose liability on ?culpable expression and conduct? without ?discouraging the development of technologies with lawful and unlawful potential,? Grokster, 545 U.S. at 936?37. We are persuaded that the Global-Tech rule developed in the patent law context, which held that contributory liability can be based on willful blindness but not on recklessness or negligence, is a sensible one in the copyright context. It appropriately targets culpable conduct without unduly burdening technological development.

Note that the first paragraph is about inducement, which has specific characteristics, and the latter two are about “knowledge.” But knowledge isn’t what proves the intent for inducement. So… even as it’s right to kick this back to the lower court, it feels like the 4th Circuit got twisted up by its own reasoning.

Then there’s the issue of what the court means when it talks about “specific instances of knowledge.” See this paragraph:

Selling a product with both lawful and unlawful uses suggests an intent to cause infringement only if the seller knows of specific instances of infringement, but not if the seller only generally knows of infringement. See Ludvarts, 710 F.3d at 1072 (holding that contributory copyright infringement ?requires more than a generalized knowledge . . . of the possibility of infringement?; it requires ?specific knowledge of infringement?). A seller who only generally knows of infringement is aware that ?some of [his] products will be misused? ? but critically, not which products will be misused.

This same issue came up in the Viacom v. YouTube case, in which it was found that YouTube wasn’t infringing just because it had “general knowledge” that it was hosting some infringing content. It could only be liable if it had actual knowledge of infringing content and then failed to take it down. But… how the hell do you apply that standard here? You can see how it would apply to YouTube, where YouTube can go and see the file still hosted on its servers after being notified that it’s infringing and then check to see that it is, indeed, the same material as the copyright holder claims. For an ISP, however, where the data is in motion, as opposed to at rest, all you have to go on are these often erroneous notifications from Rightscorp claiming infringement. But by the time an ISP like Cox would look at it… the transmission would be complete. So how can Cox have “actual knowledge” of infringement — absent a court ruling that the activity was infringing (bringing us all the way back around to the first point made above)?

Either way, this case is hardly over yet, as there’s still another trial to now go through. But, as it stands, it’s making a big mess out of copyright law. And that’s not good.

Filed Under: actual knowledge, copyright, dmca, dmca 512, inducement, infringement, jury instructions, knowledge, safe harbors, termination policy
Companies: bmg, cox, rightscorp

The Details Of Why Judge O'Grady Rejected Cox's DMCA Defense: Bad Decisions By Cox May Lead To Bad Law

from the ugh dept

As we noted a couple of weeks ago, Judge Liam O’Grady rejected Cox Communication’s attempt to protect itself under the DMCA’s safe harbor concerning a “repeat infringer policy.” At the time, he only said he would explain his reasons later, and late yesterday he released his full opinion. It, unfortunately, brings to mind the phrase “hard cases make bad law.”

As we explained when BMG and Round Hill Music (with the help of Rightscorp) first sued Cox Communications, the company seemed like a slightly odd choice. While it was the largest of the internet access providers not to sign onto the so-called “voluntary” six-strikes “Copyright Alert System” hammered out between the RIAA/MPAA and big ISPs, it already had a reputation for actually disconnecting those accused of repeat infringements. None of the other major ISPs do that. In fact, a key prong of the whole six strikes thing was that no one would be getting kicked off the internet.

However, the RIAA has long insisted that the DMCA’s 512(i) required ISPs to kick people off the internet — even as that theory had never really been tested until now. Many others had assumed 512(i)’s “repeat infringer” policy only really referred to service providers who actually had direct control over content — i.e., a YouTube or SoundCloud style site. Kicking people entirely off the internet because one person who uses their account to infringe is quite draconian.

The issue here, however, gets muddied, because Cox made such a mess of its “repeat infringer policy.” Yes, it alone among the major ISPs will kick people off. But (and this is the important bit), its internal policy was apparently to kick people off… and then allow them to sign right back up for new service, at which point the count on “infringements” would be reset to 0. For obvious reasons, that feels pretty sketchy, and it’s the key point that Judge O’Grady focuses on. Doing something that feels sketchy will often obscure the more important legal arguments. Judge O’Grady basically tosses aside all the other issues because of this “bad behavior” by Cox, as immortalized in some internal emails.

The record conclusively establishes that before the fall of 2012 Cox did not implement its repeat infringer policy. Instead, Cox publicly purported to comply with its policy, while privately disparaging and intentionally circumventing the DMCA?s requirements. Cox employees followed an unwritten policy put in place by senior members of Cox?s abuse group by which accounts used to repeatedly infringe copyrights would be nominally terminated, only to be reactivated upon request. Once these accounts were reactivated, customers were given clean slates, meaning the next notice of infringement Cox received linked to those accounts would be considered the first in Cox?s graduate response procedure.

Numerous emails in the record, portions of which are reproduced below, support these conclusions. Even viewed in the light most favorable to Cox, the Court finds the contents of the emails cannot be explained away. Cox?s attempts to recast the emails are unavailing. Nor can they be pinned on low level employees whose views had no real significance. The name that appears again and again on these emails is Jason Zabek, Cox?s Manager of Customer Abuse Operations.

> In 2009, Zabek sent an email titled, ?DMCA Terminations,? to the abuse group that said: > > As we move forward in this challenging time we want to hold on to every subscriber we can. With this in mind if a customer is terminated for DMCA, you are able to reactivate them after you give them a stern warning about violating our AUP and the DMCA. We must still terminate in order for us to be in compliance with safe harbor but once termination is complete, we have fulfilled our obligation. After you reactivate them the DMCA ?counter? restarts; The procedure restarts with the sending of warning letters, just like a first offense. This is to be an unwritten semi-policy . . . We do not talk about it or give the subscriber any indication that reactivating them is normal. Use your best judgment and remember to do what is right for our company and subscribers. . . . This only pertains to DMCA violations. It does not pertain to spammers, hackers, etc.

And, based on that, the court decides that Cox does not have a “reasonably implemented” termination policy for repeat infringers. There are a bunch of other similar emails, indicating that this absolutely was Cox’s policy. Of course, all of that obscures the question of whether or not 5129(i) is meant to apply to access providers, rather than online service providers.

Separately, the judge buys BMG’s claim that in late 2012, Cox actually stopped terminating accounts almost entirely (leaving aside, again, that no other major access provider terminates anyone). Again, some questionable internal behavior by Cox comes back to bite them. The judge highlights a case where Cox internally kept discussing a user who was frequently accused of infringing, and who they threatened to cut off… but didn’t — even admitting it’s at least partly because of the large amount of money the customer pays.

In June, a senior engineer in the abuse group said this about a customer who had been given a final suspension and advised to remove all P2P file-sharing programs: ?This customer will likely fail again, but let?s give him one more change [sic]. [H]e pays 317.63 a month.?

The judge uses this and other examples to note that Cox knew of “repeat infringers” but didn’t terminate them. Of course, the vague language of 512(i) doesn’t say that you have to terminate someone as soon as you know they’re repeat infringers — just that you have a “reasonably implemented policy.” However, Judge O’Grady uses these examples to suggest the policy implementation is not reasonable.

Cox’s defense to that is it can’t know for sure if people are infringing based solely on accusations. This is correct, but Judge O’Grady doesn’t care.

Although Cox was under no duty to monitor for infringement, Cox did not have leeway to wait until an account holder was adjudicated as an infringer to find that circumstances were appropriate for termination. As explained above, the Court disagrees that a repeat infringer policy applies only to those who have been held liable in a copyright suit. Rather, an account holder must be considered an infringer, at minimum, when the service provider has actual knowledge that the account holder is using its services for infringing purposes. Nor do service providers have complete discretion to define ?appropriate circumstances.? Appropriate circumstances arise when an account holder is repeatedly or flagrantly infringing copyrights. Thus, when Cox had actual knowledge of particular account holders who blatantly or repeatedly infringed, the responsibility shifted to Cox to terminate their accounts.

That, alone is quite troubling. Kicking people off the internet based merely on accusations of infringement is really dangerous, especially given the number of false infringement allegations that we see.

The one good thing is that the court rejects BMG’s troubling definition of “making available.” This has been a fight that’s been going on for ages. Copyright law says that one of the exclusive rights given to a copyright holder is the “distribution” right. What is not settled law at all is whether or not “making available” violates this distribution right, or if copyright holders have to show actual distribution. The courts are somewhat split on this, with O’Grady recognizing that merely making available is not distribution.

At the threshold, the Court questions the evidence relied on by those courts that purportedly establishes that distribution is interchangeable with publication. Those courts build upon comments in legislative history as well as an excerpt from the Supreme Court?s decision in Harper & Row Publishers, Inc. v. Nation Enterprises…. Legislative history cannot override the plain meaning of ?distribution? under § 106(3), however, and Harper & Row involved a narrow discussion of first publication and not the meaning of distribution and publication generally….

Nor does the definition of ?publication? support a broader reading of the distribution right. The Act defines ?publication? as

> the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication.

…The first sentence of the definition tracks the language in § 106(3), making it clear that all distributions are publications. It does not follow from that proposition that the inverse?all publications are distributions?is also true…. In short, § 101 provides no support for BMG?s ?making available? theory.

There’s some more in the ruling, but it seems pretty clear that Cox’s own internal emails and policies really sunk the company here, and out of that could come some potentially dangerous law. Some have been making a big deal over the fact that Cox’s insurance company, Beazly, has filed for declaratory judgment that it’s not responsible for any judgment in this case — but again, that seems to focus on Cox’s own actions, which may not apply more broadly to other providers.

Also, important is the fact that the trial still is about to go forward. Losing the safe harbor protections does not, necessarily, mean that Cox will lose the overall case, but it’s an ominous start. Judge O’Grady’s rulings and statements so far certainly do not bode well for the company. It’s also a little bit ridiculous that O’Grady focuses so much on Cox’s bad behavior, but leaves out Rightscorp’s much worse behavior — but I can see where he’s coming from.

In the end, this is unfortunate and it’s certain that this case will be appealed, no matter how it turns out. But the bad behavior by Cox poisons the well a bit in terms of focusing on the rather important question of what 512(i) actually means, and whether it really applies to internet access providers. As it stands right now, however, a potentially dangerous precedent could be set, whereby people could be forced to completely lose internet access based on mere accusations of copyright infringement. It’s hard to believe that Congress intended such a result, but that’s how Judge O’Grady is now reading the law.

Filed Under: 512i, copyright, dmca, liam o'grady, repeat infringer, safe harbors, termination policy, three strikes
Companies: bmg, cox, cox communications, rightscorp