A U.S. appeals court has overturned a $1 billion 2019 decision in favor of the major labels against cable and internet provider Cox Communications, setting the stage for a new trial.
The 4th U.S. Circuit Court of Appeals in Richmond, Virginia ruled on Tuesday that the $1 billion in damages was not justified and that a federal district court should hold a new trial to decide an appropriate amount. The news was first reported Tuesday by Reuters.
In December 2019, a Virginia jury found Cox Communications — the largest unit of privately owned Cox Enterprises and the third-largest broadband service provider in the U.S. — liable for its customers’ violations of more than 10,000 copyrights held by labels that include Sony Music Entertainment, Warner Music Group and Universal Music Group.
The court said in its ruling on Tuesday: “We affirm the jury’s finding of willful contributory infringement. But we reverse the vicarious liability verdict and remand for a new trial on damages because Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for vicarious liability.”
Fifty-three music companies — including recording giants Sony Music, Warner Music Group, Universal Music Group and top publishers Sony/ATV Music Publishing, Warner Chappell and Universal Music Publishing Group — filed suit in July 2018, alleging that Cox had ignored infringement notices and allowed repeat offenders to continue to use its service, essentially turning a blind eye to the practice. Jurors awarded $99,830.29 for each of the more than 10,000 infringed works, according to Music Business Worldwide.
Cox called that judgment “unwarranted, unjust and an egregious amount,” and challenged the ruling in January 2020. While a judge rejected the company’s assertion,
Cox then took the matter to the 4th Circuit appeals court.
The appeals court’s ruling in favor of Cox sets the stage for a retrial, which could result in a setback for the music industry, which has since filed a number of similar copyright lawsuits against U.S. internet providers.
