It’s been an interesting few months for Big Tech’s safe harbor protections under copyright law and the antonymous Communications Decency Act. These safe harbors are important to protect Big Tech’s income transfer also known as the “value gap,” but an often overlooked precursor to the effectiveness of safe harbor are the compliance requirements clearly spelled out in the applicable statutes.
It is important to remember that in order to enjoy the safe harbor, Big Tech has to act responsibly on “red flag knowledge”–meaning that they knew or should have known that there was infringement on their platform–and that they enforce a “repeat infringer policy.” Contrary to what it seems a lot of people believe, the DMCA is not a “catch me if you can” alibi. Rather, there is a quid for the pro quo.
And BMG Rights Management is the only music publisher we know of to take direct action against an ISP for failing to enforce a repeat infringer policy–and, most importantly, to win their case by denying the ISP any safe harbor protection. Although the case settled last week before a potential retrial could have made Cox’s liability even greater given the favorable appeals court ruling, BMG made some good law in the process.
BMG brought its case against Cox Communications in 2014 and won a jury verdict in 2015 for $25,000,000 in statutory damages and $8,500,000 in attorneys fees. Cox appealed and the appeals court reversed the jury award and ordered a new trial based on imprecise jury instructions, but also ruled that the safe harbor repeat infringer policy predicate requires meaningful implementation of that policy by an ISP.
Cox argued that an “infringer” in the case of the repeat infringer policy means an adjudicated infringer, i.e., one who has had a full federal trial and exhausted all appeals. This argument has been around since 1999 at least for one reason–it would essentially turn the DMCA safe harbor into a “catch me if you can” alibi that not only was totally unworkable but was also defeated the purpose of the predicate in the first place.
The appeals court put this canard to rest: (at pp. 12-13)
Cox contends that because the repeat infringer provision uses the term “infringer” without modifiers such as “alleged” or “claimed” that appear elsewhere in the DMCA, “infringer” must mean “adjudicated infringer.” But the DMCA’s use of phrases like “alleged infringer” in other portions of the statute indicates only that the term “infringer” alone must mean something different than “alleged infringer,” otherwise, the word “alleged” would be superfluous. Using the ordinary meaning of “infringer,” however, fully accords with this principle: someone who actually infringes a copyright differs from someone who has merely allegedly infringed a copyright, because an allegation could be false. The need to differentiate the terms “infringer” and “alleged infringer” thus does not mandate Cox’s proposed definition.
Moreover, other provisions of the Copyright Act use the term “infringer” (and similar terms) to refer to all who engage in infringing activity, not just the narrow subset of those who have been so adjudicated by a court.
Recall that music publishers never participated in the Copyright Alert System which was an agreement among the Recording Industry Association of America, the Motion Picture Association of America, and the internet service providers AT&T, Cablevision, Comcast, Time Warner Cable, and Verizon. In a non-technical sense, CAS was something of its own repeat infringer policy by contract on top of the DMCA. The CAS agreement expired in 2017–after BMG brought its lawsuit against Cox. Although there was nothing in the CAS that stopped a publisher from suing any ISP, it was practical that BMG would sue a big ISP like Cox that was not in CAS.
In a reversal of the old order, the labels now have sued Cox for infringement of their sound recordings some of which were implicated in the BMG Rights case, and that lawsuit has would up before Judge Liam O’Grady who heard the BMG Rights case (wheel fans take note).
According to Music Business Worldwide:
BMG North America General Counsel Keith Hauprich, said, “This was a landmark case in which BMG took on the third biggest internet service provider in the United States to defend and establish the principle that in order to benefit from a so-called ‘safe harbor’ defense, an ISP has responsibilities. While the financial terms of the settlement are confidential, we are happy they reflect the seriousness of this case.”
He added: “Other ISPs should take note that the law gives protection to the work of artists and songwriters. We will not hesitate to take action where necessary.”
In a further statement, BMG said: “BMG succeeded in establishing in court its central claim that an ISP needs to take specific action against subscribers it knows to be repeat copyright infringers.
“BMG is optimistic that this victory will persuade other US ISPs to tighten up their procedures on copyright infringement. Having achieved a landmark ruling, BMG concluded that it made sense to accept a substantial settlement.”
Or, as we say around MTP, the DMCA is not an alibi.