US internet service provider Cox Communications has filed another appeal with the Fourth Circuits Appeal Court in its ongoing legal battle with the music industry. It previously got the Fourth Circuit to force a review of the billion dollars in damages it was ordered to pay the record companies. However, it still quite likes the idea of paying no damages at all, and so is ploughing on with a second appeal.
This time the ISP wants the appeals court to consider some very specific grievances. In a recent legal filing, it explains that the issue here is alleged “litigation misconduct” by the record companies and “newly discovered evidence” which “reveals that the initial jury verdict was unfairly procured”.
Cox Communications was involved in two key cases testing the copyright liabilities of ISPs in the US. First, BMG successfully argued that Cox didn’t do enough to stop repeat copyright infringers among its customer base and could therefore be held liable for the infringement of its users. Then the majors sued making the very same argument and, in 2019, won the headline-grabbing billion dollars in damages.
Since then Cox has pursued various routes of appeal. Its first trip to the Fourth Circuit resulted in a mixed bag judgement, partly in favour of the ISP.
In 2019, Cox was found liable for both contributory infringement - having contributed to its users’ illegal distribution of music - and vicarious infringement - on the basis it profited from that illegal distribution. The Fourth Circuit ruled that there was only a case for contributory infringement, which is relevant because that would normally reduce the damages bill. To that end, the district court where the legal battle began now has to reconsider what damages Cox should pay.
While all that was ongoing, Cox also launched a separate appeal which is where the allegation was made that the record labels were guilty of “litigation misconduct”.
In order to hold the ISP liable for contributory infringement, the labels had to show that the internet company’s customers had directly infringed the copyright in their recordings. They did that with a hard disk of data gathered by anti-piracy company MarkMonitor, which related to music files that had been downloaded illegally between 2012 and 2014.
“The reliability of MarkMonitor’s system was all-important”, Cox states in its new filing with the Fourth Circuit. However, it claims, the ISP “was deprived of the opportunity to scrutinise MarkMonitor’s system fully”.
Such scrutiny, however, did occur when the record labels sued other ISPs like Charter Communications and Bright House Communications. That scrutiny, Cox argues, highlighted issues with the MarkMonitor data that would have been relevant in its case, and which should have been disclosed by the labels during its trial.
In the Charter litigation, Cox writes in its new legal filing, the labels “were forced to disclose a project they had commissioned from MarkMonitor in 2016 to re-download, from random sources on the internet, the songs purportedly reflected in the MarkMonitor database. Why commission such a project? Because MarkMonitor had deleted critical direct-infringement evidence: the original files on which its database was founded”.
That revelation, Cox claims, forced the labels to change their arguments in the Charter case. Those arguments were then not tested in court because that particular lawsuit was settled. As was the separate case involving Bright House.
Cox says that the revelations in the Charter and Bright House cases are sufficient to overturn the original ruling against it, citing Rule 60 of the US Federal Rules Of Civil Procedure. That rule says that a court can “relieve a party from a final judgement” for various reasons, including newly discovered evidence or misconduct by an opposing party.
However, when it made that argument to the district court where it fought the original legal battle, the judge who oversaw the case concluded that there wasn’t, in fact, sufficient grounds to overturn the jury’s ruling. The new evidence, he said, was “not material, nor is it likely to produce a new outcome if the case were retried”.
It is that conclusion that Cox is now appealing in the Fourth Circuit. “The interests of justice demand a new trial in which Cox will have the opportunity to test the labels’ evidence of direct infringement”, it concludes.