Under U.S. copyright law, Internet providers must terminate the accounts of repeat infringers “in appropriate circumstances.”

Many ISPs have been reluctant to take such drastic measures, which triggered a wave of copyright infringement lawsuits in recent years with WideOpenWest ( WOW! ) as one of the targets .

The Colorado-based Internet provider was sued by a group of movie companies including Millennium Media and Voltage Pictures. The filmmakers accuse the ISP of failing to disconnect the accounts of subscribers who were repeatedly flagged for sharing copyrighted material via BitTorrent.

The movie companies hold WOW! liable for these pirating activities, which could lead to millions of dollars in damages. The ISP rejects the claims and responded with a motion to dismiss, which was denied last year , and the case remains ongoing today.

Multi-Million Dollar Lawsuit Expansion

After the case was stalled for over a year, the movie companies requested permission to submit an amended complaint, which would add seven new plaintiffs and more than 300 new works.

The proposals raised the stakes significantly. Instead of 57 works, good for maximum statutory damages of roughly $8 million, an expansion to roughly 375 works would increase the statutory maximum to $56 million.

In addition to the monetary stakes, the proposed update also introduced evidence from two new third-party piracy tracking companies, Irdeto and Facterra. The initial complaint only included piracy tracking information from anti-piracy partner Maverickeye.

WOW protested these additions, but the court allowed the movie companies to go ahead. This week, they filed their second amended complaint at the Colorado federal court, making the changes official.

Same Claims, Higher Stakes

The nature of the claims against WOW! haven’t changed. The movie companies accuse the Internet provider of contributory and vicarious copyright infringement, as well as DMCA violations.

The complaint lists several examples of WOW! subscribers who, according to the referenced piracy tracking data, repeatedly shared copyright-infringing content including plaintiffs’ films.

WOW! purportedly received tens of thousands of infringement notices and was allegedly aware of these piracy activities. However, the ISP decided not to take any action as that could hurt its revenues, the movie companies allege.

“Defendant knew that if it terminated or otherwise prevented repeat infringer subscribers from using its service to infringe, or made it less attractive for such use, Defendant would enroll fewer new subscribers, lose existing subscribers, and ultimately lose revenue,” the amended complaint reads.

Redditors and Site Blocking

In addition to IP-address logs and other evidence, the movie companies also cite screenshots from Reddit users who discussed WOW!’s handling of piracy notices, or its lack thereof. They suggest that this acted as a draw to potential subscribers.

“The ability of subscribers ‘who want it all’ to use Defendant’s high speed service to ‘intensively upload and download’ Plaintiffs’ Works without having their services terminated despite multiple notices being sent to Defendant acts as a powerful draw for subscribers of Defendant’s service,” they write.

Besides terminating accounts of subscribers whose connections are repeatedly used to pirate, the ISP could have taken other ‘simple’ actions as well. For example, by blocking notorious ‘pirate’ sites such as torrent sites YTS and (the now defunct) RARB.

“Upon information and belief, Defendant refuses to block or limit its subscribers from accessing notorious piracy websites out of fear of losing subscriber revenue,” the complaint reads.

Increased Damages and More

To compensate for this wrongdoing, the plaintiffs request statutory damages up to the maximum of $150,000 per work. With roughly 375 titles in suit, damages could reach $56,250,000 for the copyright infringements alone. The DMCA violations could add millions more to this tally, the movie companies note.

On top of the damages increase, the movie companies still seek far-reaching injunctive relief. They specifically request an order requiring WOW! to terminate the accounts of subscribers targeted by three unique infringement notices in three days.

In addition to this mandatory three-strikes policy, WOW! should also block all alleged pirate sites listed in the USTR’s annual overview of notorious markets . This includes the likes of The Pirate Bay, FMovies, and YTS.

Finally, the movie companies request an order that requires the Internet provider to disclose the identities of account holders whose accounts are flagged for copyright infringement. Needless to say, such an order would allow the companies to target the alleged pirates directly.

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A copy of the movie companies’ second amended complaint, filed against WOW! at the US District Court for Colorado, is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Without doubt, Reddit is one of the most popular user-generated content sites that exists on the Internet today.

Last month, the community-driven news and discussion platform went public and, with a market cap of more than $6 billion, immediately became one of the larger tech players.

While publicly traded companies operate under a different ruleset than private ones, Reddit remains committed to its transparency efforts. A few hours ago, the company released its latest transparency report detailing the actions it took in the second half of 2023.

779,628 ‘Infringing’ Items Flagged

At TorrentFreak, we are mostly interested in copyright-related actions. In recent years, we have seen an increase in copyright takedown notices on Reddit, partly driven by the platform’s growth. In the first half of 2023, rightsholders requested the removal of nearly a million items, which was an all-time record.

During the second half of the year, this upward trend reversed. Reddit reports that rightsholders flagged 779,628 items between July and December, an 18% decrease compared to the first half of the year.

As shown above, not all of these takedown requests resulted in action. Reddit removed 69% of the reported items, which is the lowest removal percentage of the past two years. This logically means that little over half a million items were removed.

The high rejection rate might suggest that rightsholders’ takedown requests are too broad. However, most takedowns are rejected simply because the content has already been removed. In 29,143 cases, Reddit concluded that there was no infringement; other, less common reasons, include suspected fraud and fair use.

Copyright-Related User Bans

Thus far, there is nothing to show that Reddit’s decision to go public had a major impact on its copyright takedown policies. That said, the company does signal a significant increase in copyright-related user bans.

“From July to December of 2023, Reddit banned 792 users for repeat Copyright Policy violations, an increase of 258% compared to the first half of 2023. This large increase is a result of improvements to our detection methods and increased operational capacity,” Reddit writes.

These user bans are in part the result of legal obligations. Under the DMCA, Reddit is required to implement a reasonable policy to deal with repeat copyright infringers on its platform.

Improved detection methods and increased capacity suggest that Reddit takes repeat infringements seriously. However, if we go further back in time, we see that the number of banned users is far from a record. In the first half of 2022 , Reddit banned 3,859 users over repeat copyright infringements.

Subreddit and Counter-Notices

In addition to removing or banning posts, links, and users, Reddit also took action against entire subreddits. In the last half of 2023, the platform banned 452 subreddits, down 20% compared to the six months prior.

Finally, Reddit points out that users can always object to takedown notices by sending counter-notices. In the final half of last year, the discussion platform received 397 counter-notices, of which 216 were deemed valid.

The number of valid notices increased by 86% since the last report, which Reddit attributed to its increased operational capacity. As a result, 1,331 pieces of content were successfully restored.

While not specifically mentioned in the report, Reddit also continued to object to requests from a group of filmmakers to identify Reddit users. The company does typically respond to U.S. subpoenas, but in this case, it argued that the requests violated users’ constitutional right to anonymous speech.

—

Reddit’s latest transparency report covering the last six months of 2023 is available here

From: TF , for the latest news on copyright battles, piracy and more.

In a complaint filed at a Nashville federal court last spring , Universal Music, Sony Music, EMI and others, accused X Corp of “breeding” mass copyright infringement.

The social media company allegedly failed to respond adequately to takedown notices and lacks a proper termination policy.

“Twitter routinely ignores known repeat infringers and known infringements, refusing to take simple steps that are available to Twitter to stop these specific instances of infringement of which it is aware,” the complaint alleged.

Motion to Dismiss

X vehemently disagreed and filed a motion to dismiss the case, hoping to shut down the legal battle at an early stage. The attempt was partially successful; last month, the court dismissed the music companies’ direct and vicarious copyright infringement claims.

The labels’ contributory infringement claims were partially dismissed . Judge Trauger concluded that X can’t be held liable for making it very easy to upload infringing material or for monetizing pirated content. These characteristics are not exclusive to infringing material and apply to legitimate content too, she argued.

However, some elements of the contributory infringement remain intact and the lawsuit will continue on those grounds. Among other things, this includes claims that X’s repeat infringer policy was inadequate and that it willingly turned a blind eye to pirating users, especially those who have a blue checkmark.

“Particularly striking is the allegation that X Corp. enforces its copyright policies less stringently against individuals willing to pay for its ‘verified’ service,” Judge Trauger wrote in her order.

X Answers Complaint

With the case moving forward, X was required to formally answer the complaint, which it did yesterday. In a 29-page response, X denies any wrongdoing, including allegations that its repeat infringer policy is inadequate.

The music companies’ claim and the concise reply from X shown below are exemplary.

Claim: “Twitter has not adopted, reasonably implemented, nor informed subscribers or account holders of, a policy to terminate users engaging in repeated acts of copyright infringement.”

X’s Response: “Defendant denies the allegations in Paragraph 154 of the Complaint”

In response to other allegations, X notes that the music companies are quoting and paraphrasing out of context. This includes a statement from X owner Elon Musk, who previously criticized copyright law and stated that an overzealous DMCA is a “ plague on humanity “.

This is how that statement was used by the music companies in their complaint.

X notes that this was taken out of context. The company doesn’t mention how, but the music companies didn’t mention that Musk was responding to a news article about a bill that would limit the copyright protection term for rightsholders including Disney.

“Defendant admits that Plaintiffs purport to characterize, paraphrase and quote, selectively and out of context, a post by Elon Musk, and that the content of any such post, considered fully and in context, would speak for itself. Defendant otherwise denies the allegations in Paragraph 182 of the Complaint,” X writes in its answer.

Affirmative Defenses

Aside from denying the copyright infringement allegations point-by-point, X’s formal answer to the complaint doesn’t respond in detail. This is typical for this stage of the proceeding. The answer does, however, raise a series of affirmative defenses.

For example, it counters that the remaining contributory liability claim is barred because any copyright infringement was “innocent and not willful.” In addition, X describes the requested damages, which in theory could reach $250 million, as “unconstitutionally excessive and disproportionate”.

X’s response to the complaint isn’t the endpoint, it kicks off the rest of the proceeding where both sides will have to argue their positions on the merits. There is a case management conference scheduled for next month, where the court will likely set a trial date.

—

A copy of X’s answer to the music companies’ complaint is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Internet provider Cox Communications has been on the sharp end of several piracy lawsuits in recent years.

The biggest hit came three years ago when the Internet provider lost its legal battle against a group of major record labels.

A Virginia jury held Cox liable for pirating subscribers because it failed to terminate accounts after repeated accusations, ordering the company to pay $1 billion in damages . This landmark ruling was appealed and while Cox remains liable for contributory copyright infringement, the damages award may change.

New Damages Trial ‘Delayed’

The court of appeals recently dismissed the vicarious liability claims and vacated the $1 billion damages award. A new trial will determine the scale of the damages given these new circumstances.

When the court of appeals issues its mandate, the lower court can start a new damages proceeding. However, Cox believes that it’s best to put the brakes on this process, as there is another appeal pending that could influence the outcome. That has to conclude first.

The record labels don’t object to this reasoning and have informed the court that its mandate could be stayed until the second appeal is finalized. The court of appeals subsequently granted the request last Friday.

Cox Works on Supreme Court Petition

These procedural issues typically aren’t very exciting but, in this case, Cox also revealed that it plans to file a writ of certiorari, asking the Supreme Court to take on the piracy liability battle. That’s notable, as it would be the first time that a “repeat infringer” case ends up at the highest court United States.

Cox asked the court of appeals to also stay its mandate pending its Supreme Court application, as this could steer the legal battle in yet another direction.

According to Cox, the Supreme Court has substantial reasons to take on the case. For one, there are currently conflicting court of appeals rulings on the “material contribution” aspect of copyright infringement.

The Supreme Court could give more clarity on when a service, with a myriad of lawful uses, can be held liable for infringers.

In addition, Cox also cites the recent ‘Twitter vs. Taamneh’ Supreme Court ruling, which held that social media platforms aren’t liable for terrorists who use their network. While that’s not a copyright case, it’s relevant for the secondary liability question, the ISP argues.

“Though Twitter was not a copyright case, it confronted a directly analogous theory of secondary liability: that social-media platforms, including Twitter and YouTube, could be liable for continuing to provide services to those they knew were using them for illegal purposes,” Cox writes.

Termination Risk

Finally, Cox notes that the Supreme Court should hear the case because it deals with an issue that’s ‘exceptionally important’ to ISPs as well as the public. If the present verdict stands, Internet providers may be much more likely to terminate Internet access, even if the subscriber is innocent.

“This Court’s material-contribution standard provides powerful incentives for ISPs of all stripes to swiftly terminate internet services that have been used to infringe— no matter the universe of lawful uses to which those services are put, or the consequences to innocent, non-infringing people who also use those services.

“That is why a chorus of amici urged this Court not to adopt this standard at the panel and en banc stages, and will likely urge the Supreme Court to grant review as well,” Cox adds, referring to the support it received from third-parties previously.

No Supreme Court Stay

Cox hasn’t filed a writ of certiorari yet and still has time, as it’s due June 17, 2024. The intention to go to the Supreme Court would be another reason to halt the new damages trial, according to Cox, but the court of appeals rejected the request.

This means that the new damages trial can start, even if the case is still pending at the Supreme Court. However, it’s clear that this legal battle is far from over yet.

—

A copy of Cox’s motion to stay the mandate, with the Supreme Court comments, is available here (pdf) . The Appeals Court’s order on this motion can be found here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Online piracy continues to present massive challenges for the entertainment industries.

It’s a global issue that’s hard to contain, but the major U.S. record labels and several movie companies believe that Internet providers can offer a helping hand.

For roughly a quarter-century, rightsholders have sent copyright infringement notices to ISPs, informing them about alleged copyright infringements carried out by subscribers. While many providers forwarded these notices to their customers, they rarely led to follow-up action.

This is a problem according to some rightsholders, who want ISPs to terminate the connections of subscribers repeatedly linked to pirating activity. They point to the DMCA, which states that online service providers must terminate the accounts of repeat infringers “in appropriate circumstances.”

In an earlier case, Internet provider Cox was ordered to pay a billion dollars in damages after a jury found the ISP liable for copyright infringement. This damages award was recently reversed but the liability finding remains. Meanwhile, other ISPs are fighting similar legal battles.

Frontier vs. Music and Movie Companies

Most of these lawsuits take place in federal courts, but the New York bankruptcy court is dealing with a similar dispute. In two separate cases, one filed by several movie companies and the other by record labels , Internet provider Frontier Communications stands accused of failing to terminate repeat infringers.

The financially challenged Internet provider emerged from bankruptcy and is trying to rebuild its business. However, ghosts of the past continue to follow the company, including piracy liability allegations.

Last December, Frontier hoped to sway both cases in its favor. The ISP submitted a motion for judgment on the pleadings, asking the court to dismiss the claims from the movie and music companies, noting that these fail “as a matter of law.”

The motion’s central argument stems from the ‘ Twitter vs. Taamneh ‘ Supreme Court decision, where it was determined that social media platforms were not responsible for ISIS terrorists who used their services to recruit and raise funds. In a similar vein, Frontier believes that it shouldn’t be held liable for subscribers who pirate content.

Based on these and other arguments, Frontier asked the bankruptcy court to dismiss all piracy liability claims. Needless to say, the movie and music companies disagreed and both filed objections, urging the court to keep the claims intact.

Court Denies Dismissal Request

A few days ago, Chief U.S. Bankruptcy Judge Martin Glenn ruled on the motion, which brought bad news for Frontier. After reviewing the matter, Judge Glenn saw no reason to dismiss the copyright liability claims at this stage.

In a detailed memorandum opinion, the court concludes that the Supreme Court ruling in the social media case doesn’t directly translate to the matter at hand. While both deal with third-party liability, terrorism and copyright infringement are certainly not the same thing.

The Supreme Court ruling made it clear that secondary liability for online services doesn’t always apply. However, the court believes that decades of copyright infringement liability jurisprudence can’t be overlooked.

“The Court declines to graft an analysis of secondary criminal liability for aiding and abetting terrorism onto the well-established branch of law governing secondary liability for copyright infringement. Under the relevant standard, Claimants have alleged facts sufficient to state a claim,” Judge Glenn writes.

Pirates vs. Terrorists

The court notes that Internet providers are not automatically liable for everything that happens through their service. Even general knowledge of potentially illegal activity doesn’t automatically lead to a liability finding; context is key.

In the ‘Twitter vs. Taamneh‘ case, the terrorist attacks happened outside of the platform, at a nightclub in Istanbul. While the terrorists may have used Twitter and other social media platforms to facilitate their operations, there was no direct connection to the attack.

The movie and music companies alleged a more direct connection (nexus) between Frontier and the alleged copyright infringement in their case and the bankruptcy court agreed.

“The Reina attack was not carried out on or through a social media platform, but rather in Istanbul by terrorists who had maintained accounts on the platforms; in contrast, the copyright infringement alleged here took place via Frontier’s network itself. Twitter is thus distinguishable and does not compel dismissal,” Judge Glenn notes.

The court further clarifies that this doesn’t mean that ISPs are automatically liable for everything subscribers do through their connections. The DMCA has set clear guidelines Internet providers must adhere to if they want to rely on safe harbor protection.

In addition to simply providing an Internet connection, contributory copyright infringement also involves specific knowledge of infringement and the continued provision of the means to infringe. These issues play a role here too and, based on the pleadings, a dismissal is premature.

All in all, the court denies Frontier’s request to dismiss all the movie and music companies’ piracy liability claims. This is important for the present dispute, but it may also foreshadow what other courts may conclude in similar cases going forward.

—

A copy of Chief U.S. Bankruptcy Judge Martin Glenn’s order is available here (pdf) . Frontier’s originating motion can be found here (pdf) and the music and movie company responses are available here ( 1 , 2 )

From: TF , for the latest news on copyright battles, piracy and more.

Late 2019, Internet provider Cox Communications lost its legal battle against a group of major record labels, including Sony and Universal.

Following a two-week trial, a Virginia jury held Cox liable for its pirating subscribers. The ISP failed to disconnect repeat infringers and was ordered to pay $1 billion in damages .

That wasn’t the end of it. Following the initial verdict Cox launched several challenges, including an appeal that delivered a mixed result earlier this year. The Court of Appeals for the Fourth Circuit kept the contributory copyright infringement ruling intact but reversed a finding of vicarious copyright infringement.

The latter was good news for the ISP, especially since the appeals court concluded that the scale of the damages award should be redetermined in the district court.

Both Parties Request a Rehearing

Neither Cox nor the labels were satisfied by this outcome so both requested a rehearing . The music companies want the $1 billion damages award to remain and noted that Cox already waived its right to appeal. Cox, in turn, would like the contributory copyright infringement ruling to be reversed.

The ISP argued that the landmark liability ruling results in more terminations of Internet connections, based on piracy accusations from third parties. This shapes a “draconian regime” that threatens the Internet connectivity of millions of people.

Cox’s request received support from several amici, including the American Library Association, the Electronic Frontier Foundation, and Public Knowledge. The latter detailed the stakes in a blog post recently, stressing that courts shouldn’t turn ISPs into the Internet police.

“The root of the problem is that the court failed to recognize that ISPs are infrastructure providers, not content police. Like other common carriers such as phone companies, broadband providers should not be liable for how their subscribers use their services,” Public Knowledge wrote .

“In today’s world, where broadband is essential infrastructure more akin to electricity or water than a luxury, an ISP’s role is to provide reliable internet access – not to work on behalf of the music industry. We urge the Fourth Circuit to rehear this case en banc and correct its erroneous decision on contributory liability.”

Request Denied

Despite fierce opposition from both sides, the court of appeals won’t reconsider its earlier decision. A few hours ago, it ruled on the rehearing requests, denying both without providing further detail.

“The court denies the petition for rehearing en banc and the petition for rehearing and rehearing en banc. No judge requested a poll […] on the petition for rehearing en banc,” the order reads.

This means that Cox will remain contributorily liable for the pirating activities of its users. Given what’s at stake, it wouldn’t be a surprise if this matter eventually ends up at the Supreme Court.

The $1 billion damages award remains vacated and a new trial will have to determine the scale of the damages, taking into account that Cox is no longer liable for vicarious copyright infringement.

From: TF , for the latest news on copyright battles, piracy and more.

Internet provider Cox Communications has been on the sharp end of several piracy lawsuits in recent years.

The biggest hit came four years ago when the Internet provider lost its legal battle against a group of major record labels, including Sony and Universal.

A Virginia jury held Cox liable for pirating subscribers because it failed to terminate accounts after repeated accusations, and ordered the company to pay $1 billion in damages to the labels. This landmark ruling was appealed, leading to a mixed outcome last month.

Appeals Court Issues Mixed Order

After taking a fresh look at the case, the Fourth Circuit Court of Appeals ruled partly in favor of Cox. The Court concluded that Cox is not vicariously liable for piracy carried out by subscribers, as it didn’t directly profit from their activity.

The Court did not reverse the lower court’s contributory copyright infringement finding, however. According to the Court of Appeals, there was sufficient evidence to show that Cox ‘knew’ piracy would likely occur if it continued to provide its Internet services to particular subscribers.

While the ruling is a mixed bag, it also meant that the $1 billion damages award could not stand. Instead, the Court ruled that a new trial should determine the scale of the damages.

Rehearing en Banc

Neither party was pleased with the ruling and both Cox and the labels requested a rehearing en banc , essentially calling for a do-over.

The labels, for example, would like the $1 billion in damages to remain unchanged, arguing that Cox waived a potential challenge of it earlier. In addition, the music companies argue that the Court’s decision conflicts with appeal court precedents.

Cox also calls for a rehearing. The Internet provider argues that this case isn’t merely about nuances of copyright law and associated liability, it’s much bigger than that. According to the ISP, the Internet connectivity of countless people is at stake.

‘Disconnecting Schools and Nanny Cams’

In its petition, the provider argues that the current precedent results in a highly restrictive regime where Internet providers may find themselves forced to disconnect ‘innocent’ people because someone allegedly used their connection to pirate content.

“If an ISP receives more than one accusation that some anonymous person used a specified internet connection to download infringing songs, it can avoid liability only by swiftly throwing every person in that home or business off the internet, disconnecting the guilty and innocent alike from their schools, their livelihoods, their nanny cams, their news, and everything else they do online,” Cox warns.

“If instead the ISP continues to provide the connection, a jury can find it engaged in ‘culpable conduct’ akin to aiding-and-abetting a crime.”

The ISP argues that the liability finding is at odds with a recent Supreme Court decision which concluded that a service is not necessarily liable for ‘merely’ providing a service that’s used for illegal activity. The Court of Appeal didn’t consider this in its latest ruling, but should do so, Cox notes.

A rehearing is also warranted because a party shouldn’t necessarily be held liable for willful secondary infringement, as is the case here. This conflicts with earlier precedent, the ISP argues.

“[W]illfulness requires the defendant’s awareness that its own conduct violates the law, as the Eighth Circuit has squarely held in a secondary infringement case like this one,” Cox writes in its petition.

‘Draconian Regime’

These two earlier conclusions of the court created “the most draconian approach in the country,” Cox argues, stressing that a rehearing should be granted to address them.

The matter ultimately boils down to an interpretation of the law, which can get quite technical. However, Cox also highlights the potential consequences, stressing that these issues are “extraordinarily important.” Not just for Cox, but for millions of Internet subscribers at risk of disconnection.

“The issues presented here are deeply important, not only to copyright defendants like Cox, but to millions of people who depend on internet access every day,” Cox writes.

“[T]he legal regime the panel decision and BMG enact requires an ISP to cut the cord on subscribers after receiving just a handful of notices alleging that some anonymous person has used the subscribers’ connection to infringe.”

The current precedent requires ISPs to disconnect subscribers based on repeated third-party claims. If they don’t, they subject themselves to liability, as the previous $1 billion verdict showed.

‘Hobson’s Choice’

Cox suggests that this looming punishment is disproportionate. Not only in terms of the financial consequences for Internet providers but also because the public’s Internet connectivity will be put at risk based on unadjudicated piracy claims from rightsholders.

“Without meaningful limits on secondary liability, ISPs face powerful incentives to swiftly terminate the internet connections of innumerable businesses and households, their monthly subscription fees a pittance compared to the threat of $150,000 in damages for every downloaded song.

“The full Court should grant rehearing and reject a Hobson’s choice that threatens to throw countless ordinary people offline in service of the music industry’s bottom line,” Cox concludes.

The ISP’s position is supported by several amici including the American Library Association, Public Knowledge, the Electronic Frontier Foundation, and fellow Internet provider Frontier Communications, which has filed supporting briefs.

—

A copy of Cox’s petition for a rehearing en banc is available here (pdf) and the record labels’ petition can be found here (pdf) . Frontier’s proposed amicus curiae brief can be found here (pdf) and the brief of the other supporters is available here

From: TF , for the latest news on copyright battles, piracy and more.

Under U.S. law, online service providers must respond to takedown notices and implement a meaningful policy to terminate the accounts of repeat infringers.

Many of the large social media platforms stick to these rules but, according to a lawsuit filed by several prominent music companies last year, X is not among them.

In a lawsuit filed at a federal court in Nashville last summer, Universal Music, Sony Music, EMI, and others accused X Corp of “breeding” mass copyright infringement. The labels argued that X, formerly Twitter, failed to respond adequately to takedown notices and lacked a proper termination policy.

“Twitter fuels its business with countless infringing copies of musical compositions, violating Publishers’ and others’ exclusive rights under copyright law,” the complaint alleged.

Elon Musk himself had previously added fuel to the smoldering fire, characterizing the Digital Millennium Copyright Act (DMCA) as a “ plague on humanity ”.

Motion to Dismiss

Musk’s company was swift to respond to the allegations with a request for the Court to dismiss all copyright infringement claims . According to X, the record labels failed to show how the company or its employees actively contributed to any piracy that allegedly took place on the platform.

After taking in the arguments from both sides, Nashville District Court Judge Aleta Trauger responded to the request as follows.

“It does not appear to be disputed, in this litigation, that X/Twitter users sometimes engage in copyright infringement. What is disputed is the extent to which X Corp. has actively encouraged that conduct, if at all,” Judge Trauger writes.

The labels alleged three different claims in their complaint: direct copyright infringement, vicarious copyright infringement, and contributory copyright infringement. X asked for all to be dismissed and the Court partially agreed.

Direct Infringement: Dismissed

The record labels’ direct infringement claim largely relies on the Copyright Act’s “ Transmit Clause ”, suggesting that X is liable because it directly engages in the public performance of pirated music.

This allegation relies heavily on the Aereo case , where the operators of the ‘time-shifting’ service were found to be direct infringers for transmitting over-the-air TV signals to their subscribers.

In the present case, X also transmits copyright-infringing material. However, following a lengthy semantic consideration, Judge Trauger concludes that various nuanced meanings can be applied to the term ‘transmission’.

For example, if person Y sends a pirated file to person Z, they are transmitting that file. At the same time, their ISPs are also transmitting the file, as are the backbone Internet services, and cable owners. Not all of these parties are necessarily ‘direct’ infringers.

Judge Trauger says that Aereo’s exclusive purpose was to transmit copyrighted signals but the same can’t be said for X, which has a multitude of other purposes. As such, the Court doesn’t believe that the “transmit clause” applies here.

“As the Supreme Court explained in Aereo, the Transmit Clause was adopted with the specific purpose of ensuring that both the ‘broadcaster’ and the ‘viewer’ of an audiovisual work could, where appropriate, be held liable for direct infringement of the type involved in the transmission of broadcast television through cable systems.

“That purpose is consistent with the conclusion that ‘transmission’ refers to the actions of the sender and/or ultimate recipient of a copyright-protected work—not those of the operators of the channels through which that transmission was accomplished,” Judge Trauger adds.

The Court stresses that claims against third parties are possible under theories of secondary liability, but not under direct infringement. Therefore, the first claim is dismissed.

Vicarious Infringement: Dismissed

An example of a secondary liability claim is vicarious copyright infringement. In the complaint, the music companies alleged that X is vicariously liable because it profited from its users’ pirating activities while failing to put an end to them.

Judge Trauger doesn’t rule out that X turned a blind eye to piracy, which may or may not have acted as a draw to other pirates. However, to establish vicarious infringement the accused party needs to have some type of formal control over the infringer. That doesn’t apply here, she concludes.

“X Corp. undoubtedly had some power over X/Twitter’s users—the way that a company that provides a valued service always has power over the customers who rely on it — but that does not turn customers into even loose equivalents of agents or subordinates,” Judge Trauger writes.

As such, the vicarious copyright infringement claim is also dismissed. However, similar ‘piracy-supporting’ allegations can still be brought up as part of the contributory infringement claim.

Contributory Infringement: Mixed

In analyzing the contributory infringement claim, the Nashville court must consider whether X “induces, causes, or materially contributes to the infringing conduct” of its users.

The music companies believe so, as X made it very easy to upload infringing material and monetized pirated content on its platform. However, Judge Trauger notes that these allegations apply to everything on the platform, not just pirated material.

“Any feature that makes a service easier for all of its users will, by definition, also make the service easier for bad actors. The plaintiffs have not identified any basis for concluding that X Corp. was obligated to make its service worse for everyone, just to punish the people who misuse it,” Judge Trauger notes.

The Court therefore rejects the notion that X is contributorily liable in the general sense. However, there are specific allegations that survive the motion to dismiss.

“Particularly striking is the allegation that X Corp. enforces its copyright policies less stringently against individuals willing to pay for its ‘verified’ service,” the Judge writes.

“Similarly, if X Corp. engaged in egregious delays in responding to valid takedown notices, or outright ignored some notices that were both facially and actually valid, that could support liability.”

Finally, Judge Trauger will also leave the ‘repeat infringer’ allegations intact. If the music companies can effectively prove that X willingly turned a blind eye to pirating users, that could make the company liable.

“Again, there is no basis in the law for concluding that the operator of a social media platform will face liability simply because it was less draconian in its enforcement than copyright holders would prefer.

“If, however, there was a class of X/Twitter users who were brazenly using the platform as an infringement tool, and X Corp. made the decision to unreasonably withhold enforcement of its own policies against those users, with the foreseeable consequence of ongoing infringement, then X Corp. could plausibly be held contributorily liable.”

The Court’s decision is a mixed bag. While X managed to get most claims dismissed, the music companies can still pursue their claim for contributory copyright infringement. While that is yet to be proven in court, millions of dollars in damages are still on the line.

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A copy of Judge Trauger’s memorandum, detailing the decision in response to the motion to dismiss, is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Late 2019, Internet provider Cox Communications lost its legal battle against a group of major record labels, including Sony and Universal.

Following a two-week trial, a Virginia jury held Cox liable for its pirating subscribers. The ISP failed to disconnect repeat infringers and was ordered to pay $1 billion in damages .

Heavily disappointed by the decision, Cox later asked the court to set the jury verdict aside and decide the issue directly, arguing that the “shockingly excessive” damages should be lowered. Both requests were denied by the court, which upheld the original damages award .

Despite the setbacks, Cox didn’t give up. The company believes the district court’s ruling is a disaster for Internet providers. If it stands, the verdict will also have dramatic consequences for the general public, the company warned.

Cox Appealed

In 2021, the Internet provider took the matter to the Court of Appeals for the Fourth Circuit , hoping to reverse the lower court’s judgment. According to the company’s lawyers, “the music industry is waging war on the internet” with these lawsuits.

The entire dispute revolves around the legal obligations of Internet providers when it comes to pirating subscribers. According to the law, ISPs must adopt and reasonably implement a policy that allows them to terminate the accounts of repeat infringers in appropriate circumstances.

The music companies argued that Cox failed to do so. As a result, the ISP should be held liable for vicarious and contributory copyright infringement.

While a jury previously found Cox liable for both types of secondary copyright infringement, Cox believes this was in error. It argued that some issues, including vicarious liability, should have been decided in its favor before they were sent to the jury.

Court of Appeals Reverses Vicarious Liability Ruling

After taking a fresh look at the case and weighing the evidence, the Court of Appeals partly ruled in favor of Cox in a decision handed down yesterday. The court concludes that Cox is not vicariously liable for piracy carried out by subscribers, as it didn’t directly profit from the activity.

The district court previously ruled that Cox was liable, concluding that it profited from not terminating the accounts of repeat infringers, which allowed the company to keep collecting monthly subscription fees. The Court of Appeals reaches a different conclusion.

To establish liability, there should be evidence to show the ISP had a direct financial benefit from the reported copyright infringements. That’s not the case here, according to the court.

“To prove vicarious liability, therefore, Sony had to show that Cox profited from its subscribers’ infringing download and distribution of Plaintiffs’ copyrighted songs. It did not,” the Court of Appeals notes.

Court of Appeals Reverses Vicarious Liability Ruling

The district court previously ruled that Cox could be held liable for failing to terminate subscribers who paid monthly fees. Cox was aware of that and considered the monthly payments when deciding whether to terminate an account or not.

According to the Court of Appeals, this is not enough, as the direct connection between the infringing activity and financial gain is absent.

“The continued payment of monthly fees for internet service, even by repeat infringers, was not a financial benefit flowing directly from the copyright infringement itself,” the decision reads.

“As Cox points out, subscribers paid a flat monthly fee for their internet access no matter what they did online. Indeed, Cox would receive the same monthly fees even if all of its subscribers stopped infringing.”

Piracy Draw and Payment Tiers

The music companies also argued that the ability to pirate through Cox acted as a draw to potential pirates, as evidence showed more than 10% of all traffic on the network was likely piracy-related.

That didn’t convince the appeals court; it notes that people don’t exclusively use their Internet connections to pirate and there’s no evidence to show subscribers favoring Cox over other providers.

“No one disputes that Cox’s subscribers need the internet for countless reasons, whether or not they can infringe. Sony has not identified evidence that any infringing subscribers purchased internet access because it enabled them to infringe copyrighted music.

“Nor does any evidence suggest that customers chose Cox’s internet service, as opposed to a competitor’s, because of any knowledge or expectation about Cox’s lenient response to infringement,” the ruling adds.

Similarly, the music companies’ argument that pirates paid for higher bandwidth tiers that are more expensive, was also rejected.

“Sony has not identified any evidence that customers were attracted to Cox’s internet service or paid higher monthly fees because of the opportunity to infringe Plaintiffs’ copyrights.”

Contributory Infringement Remains

The second liability theory deals with contributory copyright infringement. Here, the music companies had to show that Cox ‘knew’ that piracy would likely occur if it continued to provide its Internet services to particular subscribers.

According to the Court of Appeals, there was sufficient evidence to reach this conclusion. As such, the contributory copyright infringement ruling remains intact.

“The jury saw evidence that Cox knew of specific instances of repeat copyright infringement occurring on its network, that Cox traced those instances to specific users, and that Cox chose to continue providing monthly internet access to those users despite believing the online infringement would continue because it wanted to avoid losing revenue.”

Court Vacates $1 Billion Damages Order

The Court of Appeals’ conclusions are a mixed bag, which may trigger further appeals while having an effect on previously established damages.

Given these new findings, the Court of Appeals concludes that the $1 billion damages award issued by the jury cannot stand. Instead, it is vacated, and a new trial will have to determine the scale of the damages.

Cox is still liable in part and the number of infringed works is unchanged. However, the court feels that, given the new situation, the jury could have reached a different conclusion.

“We have reversed the vicarious liability verdict because Cox did not directly profit from its subscribers’ infringement. Without that legally erroneous finding, the jury’s assessment of at least these damages factors may be different.”

“We therefore vacate the damages award and remand for a new trial on damages,” the court concludes.

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A copy of The Fourth Circuit Court of Appeals order and associated ruling are available here ( 1 , 2 )

From: TF , for the latest news on copyright battles, piracy and more.