Cox on the back foot in claim by BMG

A District Court in America has made a potentially devastating ruling for Internet service Providers and possible online platforms, ruling that the current U.S. DMCA legislation does not, on the facts of a case brought by two music publishers and Rightscorp against Cox Communications, shield the major Internet provider from liability for illegal music downloading by its subscribers.

Two music companies, BMG Rights Management LLC and Round Hill Music LP, filed a lawsuit against Cox in 2014, claiming that Cox, which provides Internet service to millions of people, deliberately turned a blind eye to illegal downloading by its subscribers stating: “Cox has repeatedly refused to terminate the accounts of repeat infringers“and ”The reason that Cox does not terminate these subscribers and account holders is obvious—it would cause Cox to lose revenue.” BMG and Round Hill claimed that Rightscorp Inc had informed Cox  of “hundreds” of repeat infringers. They allege that Cox had failed to ​do anything in regard to these customers and has thus given up its "safe harbor" protection under the provisions of the DMCA. Rightscorp's data allows them to identify "repeat infringers" that use BitTorrent to download large quantities of music. Rightscorp insists that ISPs like Cox must respond when it identifies those users, and forward its notices demanding a setlement of $20 per song or else face a copyright lawsuit. BMG and Round Hill were seeking damages for contributory and vicarious copyright infringement and a judicial order requiring Cox to "promptly forward 
plaintiffs' infringement notices to their subscribers."

Cox Communications, the third largest cable TV company in the U.S., but was the one major player absent from the deal struck between the content owners and service providers back in 2011 (the Copyright Alert System) which did involved the likes of Cablevision, Comcast, Time Warner and Verizon.

Cox responded In court papers stating it had no “actual” knowledge of any specific infringements, and that the plaintiffs had no evidence of Cox account holders personally infringing through their Cox accounts.

The case is now expected to go trial next week, to determine whether Cox should be held liable for its alleged role in any infringement, and, if so, how much it should have to pay. A full opinion is also expected. It is also likely that Round Hill will drop out of the claim, after the ruling cast doubt on their standing as a plaintiff. 

In the order, Judge Liam O’Grady agreed with the plaintiffs, saying that Cox essentially failed to set up and enforce a “repeat-infringer” policy - a decision that could potentially open a floodgate for new claims against the cable industry and ISP by content owners: “This ruling is potentially very concerning to every user of the Internet, who may stand substantially less protected than before,” said Charles Duan, a staff attorney with Public Knowledge, the Washington, D.C., group that advocates for greater consumer access to the Internet and other technologies. The Judge held:  "There is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy" as required by the law. 

The Judge refused to allow the Electronic Frontier Foundation and Public Knowledge to file an amicus brief supporting Cox saying (according to TechDirt): "It adds absolutely nothing helpful at all" and "It is a combination of describing the horrors that one endures from losing the Internet for any length of time. Frankly, it sounded like my son complaining when I took his electronics away when he watched YouTube videos instead of doing homework. And it's completely hysterical."

In a rebuttal to BMG's accusations, Cox described Rightscorp as selling "shady services" to copyright owners. Rightscorp "shakes down ISP customers for money without regard to actual liability, and it tries to enlist ISPs in its scheme," Cox lawyers write. The ISP doesn't act on Rightscorp's notices because they're "wrongful" and inadequate, but Rightscorp kept dumping "thousands of notices per day" on the ISP. When Cox wouldn't get on board, Rightscorp and its biggest client sued. "This suit is Rightscorp's retribution, with Plaintiffs’ complicity, for Cox’s refusal to participate in Rightscorp’s scheme," state Cox lawyers.

Cox said it  "works well with many copyright holders," but considered Rightscorp notices "improper, as involving extortion and blackmail." In a mostly redacted section of its legal brief, Cox describes its system of "graduated response" for responding to allegations of copyright infringement. Cox notes that account termination is "not the industry norm" but goes on to emphasize that it does, in fact, terminate some account holders because of copyright complaints. But "the decision requires discretion," since some subscribers don't understand what gave rise to copyright complaints and may need help keeping their Internet access secure, or removing malware, before the company takes the "extreme measure of termination."

On the other hand ........ Comcast's practice of injecting copyright warners into the video streams of customers who may be illegally watching content has drawn renewed criticism from Internet pundits who say the company should leave its users' traffic alone. Privacy and security fears have been raised by San Francisco developer Jarred Sumner who published a code for the Comcast alert banner on his GitHub page.  Drawing interest from ZDNet and others, Sumner described Comcast's injection of the warning banners as a "man-in-the-middle" attack in which the MSO intercepts traffic between the user and their servers. 

http://arstechnica.com/tech-policy/2015/11/with-a-week-to-go-before-rightscorp-trial-cox-loses-key-dmca-motion/ and  http://www.wsj.com/articles/judge-rules-against-cox-communications-in-copyright-case-1448404833