RICHMOND, Virginia – A federal appeals court in the 4th Circuit overturned a $1 billion piracy verdict against Cox Communications that was handed down in 2019. The court rejected the claim that Cox directly profited from copyright infringement by users on its network. While the court upheld the finding of willful contributory infringement, it reversed the vicarious liability verdict and called for a new trial on damages.
The case stemmed from music copyright holders suing Cox, alleging that the ISP did not adequately combat piracy on its network and failed to terminate repeat infringers. The original jury found Cox liable for infringement of over 10,000 copyrighted works, leading to the initial $1 billion verdict.
Cox’s appeal received support from advocacy groups concerned about the potential consequences of the large judgment. These groups argued that such a ruling could lead to ISPs disconnecting more users based solely on accusations of copyright infringement. Concerns were also raised about the legal flaws in the original ruling, with the Electronic Frontier Foundation pointing out that the decision could result in countless individuals losing vital Internet access.
In its ruling, the appeals court emphasized the need to prove that Cox directly profited from its subscribers’ copyright infringement to establish vicarious liability. Cox argued that it did not profit directly from infringement, as it received the same monthly fee from subscribers regardless of their download activities.
The court’s decision also highlighted the necessity of establishing a causal relationship between the infringement and the financial benefit to the defendant to establish vicarious liability. This ruling sets a precedent for future cases involving ISPs and their liability for copyright infringement on their networks.