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IP/Entertainment Case Law Updates

Sony Music Entertainment v. Cox Communications

District court grants summary judgment for copyright holders against ISP, finding that ISP had specific knowledge of copyright infringement by subscribers on its networks and was contributorily liable. 

Plaintiffs are record companies that produce, manage, acquire, sell and license sound recordings and musical compositions.  Cox is an Internet Service Provider (ISP) and broadband communications network.  Plaintiffs hired MarkMonitor, an anti-piracy company, to scan the internet for potentially infringing file-sharing on peer-to-peer networks.  MarkMonitor then sent notices to Cox on plaintiffs’ behalf, identifying infringing material and the IP address at which it was hosted.  Cox then issued automated warnings to its subscribers with escalating severity, which the court notes amounted to a 13-strike policy.  Plaintiffs identified infringing Cox subscribers who accrued more than three strikes, for a total of 10,478 works that are at issue in this case.

Plaintiffs sued Cox Communications and related entities for contributory infringement and vicarious liability copyright infringement alleging that Cox failed to take action to prevent its subscribers from downloading and distributing 7,068 copyrighted sound recordings and 3,452 copyrighted musical compositions owned by plaintiffs.  The parties filed cross motions for summary judgment.  In considering the motions, the court addressed two issues: (1) the ownership of the copyrights and (2) the knowledge element of contributory infringement.  The court denied defendant’s motion for summary judgment and granted plaintiff’s motion on the issue of copyright ownership, with the exception of only a few of the claimed works.  

First, the court considered plaintiffs’ ownership of the copyrights, a necessary element for their claim of copyright infringement.  Plaintiffs asserted exclusive control of the copyrights as to all 10,478 works, offering evidence including certificates of registration with the U.S. Copyright Office, registration entries from the online Copyright Catalog, declarations from executives representing all plaintiff groups and other business agreements that had bearing on ownership (such as mergers and acquisition agreements).

While a certificate of registration issued by the Copyright Office is prima facie evidence of valid copyright ownership, courts may also look at other indicia of ownership, such as the intent of the parties and the terms of transfer agreements establishing chain of title.  Cox claimed that plaintiffs failed to substantiate their ownership claims in a subset of the total works at issue because plaintiffs’ evidence of ownership in certain cases was limited to works based on the online Copyright Catalog, certain works were registered more than five years after the first publication, plaintiffs were missing a certain chain of title documents, certain works were improperly registered as works made for hire and certain works were registered after the claim period.  The court held that a small number of works copyrighted after the period in question should be excluded from plaintiffs’ claims, but it found that plaintiffs established ownership as to the remaining majority of works.  

Second, the court considered whether Cox is liable for contributory infringement on the grounds that it had knowledge of the infringement through the infringement notices received by MarkMoniter.  “Contributory liability can be based on willful blindness but not on recklessness or negligence.”  A provider cannot be held liable for having generalized knowledge of copyright infringement occurring on its network, but a provider can be held liable if it has specific knowledge of the infringement and can take appropriate action to stop the infringement.

The court held Cox had more than just generalized knowledge of the infringement becauselaintiffs, through MarkMonitor, provided Cox with detailed notices of the infringement by its subscribers, including the titles of the infringed copyrighted material and the IP addresses of each offender.  Moreover, Cox had the ability to suspend or terminate user accounts.  Because the standard is focused on whether the defendant had the ability to act on the information provided, the court held that Cox was obligated by law to act, based on this information.  Moreover, the court noted that where a file contains both a copyrighted sound recording and a copyrighted musical composition, infringing activity provides both copyright holders with a potential claim.

Cox argued that it could not be held liable for business subscribers because there are too many people to reliably narrow down who is responsible for infringement in a business setting.  The court disagreed, finding that Cox has the ability to identify and shut down offending users even in a business setting.

Summary prepared by Melanie Howard, Ava Badiee and Alex Inman