Internet Service Provider Held Responsible for Users’ Infringement in Landmark Decision

BMG Rights Management, one of the world’s largest music publishers, has been awarded a $25 million verdict by a federal jury after Cox Communications was found to be liable for the copyright-infringing actions of its users.

Following a week-long trial in the U.S. District Court for the Eastern District of Virginia, it was determined that Cox was on the hook for the actions of its users as a result of its failure to reasonably implement a repeat-infringer policy. While the Digital Millennium Copyright Act offers a number of “safe harbors” that typically protect internet service providers from liability for copyright infringement, Cox was found to fall outside of these safe harbors when it failed to crack down on repeated piracy. For example, after identifying known copyright pirates among Cox users, BMG sought to enlist Cox’s help in sending cease and desist letters to those users and/or terminating their internet service. Cox purported to have a policy of terminating the service of repeat copyright infringers, but in practice retained them as high speed internet customers.

BMG controls the rights to music by popular artists including David Bowie and Bruno Mars, among others. At issue in this particular lawsuit were 1,397 different copyrighted works that were downloaded illegally a total of nearly 2 million times. The jury found Cox liable for willful contributory infringement, awarding $25 million in damages. Moreover, Cox is now facing a separate lawsuit from its insurance company, which is trying to skip out on the tab in the BMG case due to “Cox’s business policy and practice of ignoring and failing to forward infringement notices and refusing to terminate or block infringing customers’ accounts.”

The impact of this landmark decision on future internet service provider liability for copyright infringement seems clear: you can probably expect ISPs to crack down much harder on copyright abuse, probably going as far as to terminate the service of repeat offenders. In the wake of this verdict, the failure to do so could result in significant liability for the service provider, in what appears to be a clear victory for artists and rights holders.

Frank Gulino is an award-winning composer and attorney with Berenzweig Leonard, LLP. He can be reached at FGulino@BerenzweigLaw.com.

Recent Copyright Law Decisions Have the Industry Jammin’

The entertainment industry is no stranger to copyright law, but three recent federal court decisions may just throw things for a loop.

Earlier this summer, the Fourth Circuit clarified the “substantially similar” test, which is used to determine copyright infringement. David Copeland, a singer and songwriter, alleged that Justin Bieber and Usher’s song, Somebody to Love, was a ripoff of his own song. In considering whether the two works were “substantially similar,” the Fourth Circuit applied a two-part analysis: whether the works were “intrinsically” (in other words, subjectively) similar and whether they were “extrinsically” (objectively) similar. Although the extrinsic analysis often involves scholarship and expert analysis, the subjective analysis is based on the general audience’s perception. The Court found that both songs had an identical chorus, or “hook.” Since the hook is typically the most memorable part of any song, the Court concluded that a jury could reasonably find the two songs substantially similar and remanded the case back to the lower court. The case could go to trial as early as next year.

The Ninth Circuit, meanwhile, has weighed in on an eight-year-long battle involving the extent of copyright holders’ claims over copyrighted material. In 2007, Stephanie Lenz sued Universal for directing YouTube to take down a 29-second video clip of her son bobbing to Prince’s Let’s Go Crazy. Universal asserted that the clip infringed Prince’s music copyright. Section 512(c) of the Digital Millennium Copyright Act (DMCA) allows service providers, like YouTube, to avoid copyright infringement liability if they timely remove or disable access targeted content after receiving a takedown notification about the content. Notoriously known as the “dancing baby” case, Lenz’s claim alleged that Universal did not evaluate whether the uploaded video’s use of Prince’s song qualified as “fair use” before targeting it for takedown. The Fair Use Doctrine permits the use of copyrighted material in certain situations, such as parody, news reporting, or incidental use, based on application of a subjective, multi-part test. Although the DMCA does not explicitly require fair use analysis prior to issuance of a take-down notice, the Ninth Circuit held that “fair use is not just excused by the law, it is wholly authorized by the law.” According to the opinion, the DMCA requires copyright holders to consider fair use before sending a takedown notification, or face liability under the statute. This could change completely many large media companies’ anti-infringement campaigns – most of which have an automated element – since the highly subjective fair use analysis can’t be performed by a computer.

Finally, the United States District Court for the Central District of California ruled that the “Happy Birthday” song now belongs to the public. After a class action suit challenged Warner/Chappell Music’s rights to the song, Judge King determined that the original copyright covered the song’s piano arrangement, but not the lyrics, and that the whole work has since fallen into the public domain. While the ruling serves as a fun law school case-study, it also has serious business implications for Warner/Chappell Music. Since acquiring the copyright in 1988, the company has profited significantly through commercial licensing of the song – to the tune of almost $2 million a year. Judge King’s ruling may now provide an avenue for the licensees to retrieve their money back. A Happy Birthday indeed!

With a number of other major copyright cases making their ways through the courts this year, even more changes may be on the horizon, so stay tuned for more industry updates.

Sara Almousa is a law student at the George Mason University School of Law and a law clerk at the firm of Berenzweig Leonard, LLP.