Insanity (AKA Copyright Statutory Damages) Rules: Cox Hit With $1 Billion (With A B) Jury Verdict For Failing To Magically Stop Piracy

Copyright

from the oh-come-on dept

We’ve highlighted the many problems with the various lawsuits against Cox Communications arguing that the company should be held liable for failing to wave a magic wand and stop all piracy from occurring on its service. The internet access provider was originally sued by music publisher BMG, and they got a judge who made it clear that he was not a fan of the internet, and didn’t see why it should be a problem for anyone to be kicked off the internet at all. Cox lost the case mostly because the company didn’t really follow its own internal repeat infringer policy. That ruling was upheld on appeal, leading the company to settle the case for $25 million.

Sensing an opportunity to cash in, all of the RIAA major record labels jumped in to sue Cox as well — and got the same exact judge, Liam O’Grady. After a trial earlier this month, a jury has now awarded an absolutely astounding $1 billion damages verdict. The verdict is so preposterous and so disconnected from reality, that the math is wrong. The jury verdict document said that each infringed work should lead to statutory damages to the tune of $99,830.29. And there were 10,017 works infringed. And thus, the total was $1 billion on the dot:

Except that if you multiply those two numbers, the total would actually be $1,000,000,014.93. The jury’s bad math saved Cox just about $15. Small favors.

Anyway, Cox has already made it clear that it will appeal, and I’d be stunned of such an amount held up. Everything about this is (1) crazy and (2) demonstrative of just how messed up and broken the “statutory damages” set up is for copyright. We’ve long wondered why statutory damages are even a thing in copyright, because they really don’t make any sense. But the fact that statutory damages can go as high as $150k per work infringed — even if there were literally no actual damages, raises significant 5th Amendment issues about due process (specifically, the wholly arbitrary nature of the jury award) and whether or not the award is “obviously unreasonable.”

In a Supreme Court ruling almost exactly 100 years ago (St. Louis v. Williams), the Supreme Court ruled about obviously unreasonable awards, noting that there’s a problem when “the penalty is ‘arbitrary and unreasonable, and not proportionate to the actual damages sustained.'” That certainly seems to be the case here. After all, a basic recounting of the facts seems important here. Yes, Cox did not adequately follow its own repeat infringer policy, which may have lost it its DMCA safe harbors, but a jury verdict of over $30,000 per work infringed requires the jury to say that each and every infringement was willful by Cox. And that’s crazy. Fucking up your own policies doesn’t mean that you willfully infringed on every single work that someone shared via your network. Indeed, Cox was actually one of the more aggressive internet access providers in kicking people off for infringing.

Just to put this in perspective, the entire RIAA made just under $10 billion in 2018 in the US. IFPI reported that the total globally was $19.1 billion. And they want to now say that piracy of 10,000 songs on one ISP should grant them $1 billion? Honestly, the award is so insane, and so out of touch with reality, I actually wonder if the RIAA might come to regret it, as it makes the strongest case I’ve seen yet for the sheer unconstitutional nature of statutory damages, without any evidence of actual damages, for copyright infringement.

Filed Under: contributory liability, copyright, internet access provider, jury verdict, statutory damages, vicarious liability, willful infringement
Companies: cox, cox communications, riaa, sony music, universal music, warner music