Cox Maintains That $1 Billion in Piracy Damages is Excessive

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Cox Communications has responded to the scathing opposition of several record labels, which asked the court not to lower the $1 billion piracy liability verdict a Virginia jury issued late last year. According to the ISP, the damages are disproportional and excessive, especially since its policies were not so different from the music industry sanctioned Copyright Alert System.

Last December, Internet provider Cox Communications lost its legal battle against a group of major record labels.

Following a two-week trial, the jury held Cox liable for the copyright infringements of its subscribers, ordering the company to pay $1 billion in damages.

Heavily disappointed by the decision, Cox later asked the court to lower the damages. This triggered a scathing response from the music companies, which said that Cox deserved to be punished and that the billion-dollar damages award could have been higher.

The labels countered that Cox’s copyright infringement policy was a “sham,” effectively offering a safe haven for pirates. The ISP’s internal documentation showed that subscribers were let back in after being disconnected, quoting the head of the abuse department saying “f the dmca!!!”

Late last week Cox responded to this reply, stressing that its position is unchanged. According to the ISP, the opposition lacks a proper legal basis and only confirms that the damages amount is too high.

“Plaintiffs’ opposition confirms the need for remittitur to reduce the historically excessive damage award, which undisputedly dwarfs any previous award in a comparable case—or indeed in any case,” Cox writes.

The ISP argues that, even though there are ‘only’ around 10,000 infringements in this case, the labels are holding the company liable for piracy losses across the entire industry. That’s not justified, Cox argues, adding that its claimed piracy profits are overblown.

“Plaintiffs strove to convince the jury that the 10,017 infringements they could prove were evidence of millions more infringements they could not prove, and that the appropriate measure of damages was the harm not to Plaintiffs from Cox’s infringement but to the entire music industry from all infringement,” Cox states.

One of the key points of the reply focuses on the allegations that Cox didn’t have a proper repeat infringer policy as it let terminated subscribers back in. However, the ISP counters that many of its policies were in line with the Copyright Alert System (CAS), the voluntary agreement rightsholders struck with other US Internet providers.

“Plaintiffs call it ‘incredible’ that Cox allowed terminated subscribers to return to Cox’s service with ‘a clean slate,’ but CAS too allowed a ‘reset’ for an infringing subscriber after a period without notices, no matter how many times that subscriber had previously infringed.

“And Plaintiffs’ claim that Cox’s ‘never-suspend and never terminate’ policy for business customers ‘was even more outrageous’ rings hollow given that CAS imposed no obligations at all with respect to ISPs’ business customers,” the reply reads.

While there certainly are some differences with CAS, Cox believes that it could have simply escaped liability by joining the program. Because it didn’t, it now faces a billion-dollar judgment, even though its policy wasn’t that different, it says.

“The fact that Cox could have joined CAS and thereby avoided any liability for the conduct at issue here (it is undisputed that Plaintiffs have not sued any of the ISPs who signed onto CAS) makes readily apparent the gross disproportion between the culpability of its conduct and the $1 billion award.”

The record labels blasted Cox’s initial request to lower the damages award, which was sprinkled with shaded language such as “outrageous,” “egregious,” “flagrant,” “sham.” However, the ISP says that adjectives are not facts. It, therefore, urges the court to look at the evidence and properly weigh it in context.

This includes the way the damages are calculated, Cox’s conduct, but also damages awards that were handed down in similar copyright infringement cases. In this light, the ISP believes that a billion-dollar award is not justified.

“Fair consideration of the record establishes that the $1 billion award is excessive, not only by comparison to analogous awards, but in light of the trial evidence on which it must be based,” Cox concludes.

It is now up to the court to make a decision. If it decides not to lower the damages, Cox would like to have a new trial. In addition, the ISP also has a separate request outstanding for the court to issue a judgment as a matter of law, which effectively bypasses the jury.

A copy of Cox’s reply to the labels’ opposition to its motion for remittitur can be found here (pdf).


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