Cox finally shakes off $1bn damages verdict
Decision follows attempts by the ISP to reverse what it described as “a travesty” and a “miscarriage of justice” | Controversial award was reported to be the largest ever against an infringer in a similar situation to Cox—by a factor of 40.
A US appeals court has tossed a landmark $1 billion verdict against Cox Communications in its dispute with several major record labels, which had levelled piracy allegations against the cable television and internet services provider (ISP).
The Fourth US Circuit Court of Appeals in Richmond, Virginia delivered its decision yesterday, February 20, holding the amount of damages awarded to companies including Sony Music Entertainment, Warner Music Group and Universal Music Group was unjustified.
The court found that Cox was not vicariously liable for its customers’ copyright infringement and that it did not profit from its subscribers’ acts of infringement—a legal prerequisite for vicarious liability.
However, it did affirm a jury’s finding of willful contributory infringement because Cox knew of the infringing activity and materially contributed to it.
The court went on to vacate the $1 billion damages award and remanded the case for a new trial on damages, holding that the jury’s finding of vicarious liability could have influenced its assessment of statutory damages.
A ‘miscarriage of justice’
The ruling is the culmination of numerous efforts by Cox to upend the damages verdict, which it lambasted as “shockingly excessive”.
In 2019, a Virginia jury found Cox was liable for its users’ infringement of more than 10,000 copyrights.
The record companies argued that they had sent thousands of statutory infringement notices to Cox, advising the ISP of its subscribers’ “blatant and systematic use” of Cox’s service to illegally download, copy, and distribute copyright-protected music.
After finding in favour of the record labels, the jury then assigned a value of $99,830.29 to each work, for a total of $1 billion.
Following the verdict, the ISP vowed to “vigorously” defend itself against what it called an “egregious amount” of damages, insisting that the sum was particularly disproportionate given that it was found liable for secondary infringement.
A record damages award
“The $1 billion award appears to be the largest ever against an infringer situated like Cox—by a factor of 40,” the ISP claimed.
In a motion for appeal, Cox complained that the amount was “shockingly excessive and unlawfully punitive” and urged the court to correct what it called a “miscarriage of justice”.
Judge Liam O’Grady rejected Cox’s request for a new trial in June 2020, but he did concede that the number of musical works in the suit need to be recalculated.
Six months later, the Virginia court once again upheld the award of damages in a decision described by a Cox spokesperson as a “travesty”.
In 2022, Cox filed yet another motion alleging “serious misconduct” on the part of the record companies, alleging that the 2019 win was based on “deliberate lies” that concealed crucial evidence.
It further argued that the crucial piece of evidence cited by the companies “did not in fact document the verification of the downloads that plaintiffs used to prove infringement”.
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