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IP/Entertainment Case Law Updates

Sony Music Entertainment v. Cox Communications

District court denies internet service provider’s post-trial motion to reduce $1 billion statutory damages award in copyright infringement action, ruling that ISP forfeited argument that jury verdict impermissibly included separate statutory damages awards for musical compositions and derivative sound recordings.

Plaintiffs, a group of record companies and music publishers, brought this copyright action against Cox Communications Inc. and its parent company, asserting claims for contributory and vicarious copyright infringement. Plaintiffs alleged that the infringement occurred on peer-to-peer networks over which Cox’s subscribers shared music files, and presented the jury with 10,017 copyrights that had allegedly been infringed during the relevant period. At trial, the jury awarded plaintiffs $99,830 in statutory damages for each of the allegedly infringed compositions and sound recordings, amounting to a total award of $1 billion. Cox thereafter moved for a reduction in the jury award on the grounds that it impermissibly included separate statutory damages awards for sound recordings that were derivative works of the underlying musical compositions in the case. 

Cox had argued on summary judgment that the number of statutory awards at issue should be limited because some of the sound recordings were derivative works of the compositions at issue in the case and that plaintiffs would not be entitled to a separate statutory damages award for the derivative sound recording. However, plaintiffs successfully argued that whether the sound recordings were derivative of any of the compositions presented factual questions for the jury. During trial, Cox did not offer testimony to establish the overlap in works. The court thereafter denied Cox’s request that a jury instruction be included that derivative works did not warrant a separate damages award, concluding that the jury had no record evidence on which to make this determination. 

On Cox’s post-trial motion, the court agreed with Cox on the legal issue that copyright law does not permit separate statutory damages awards for both musical composition and derivative sound recordings, but nonetheless denied the motion. The court rejected Cox’s argument that the court could reduce the award as a ministerial matter based on this legal principle. Referencing Cox’s pre-trial brief, the court explained that Cox’s own analysis was “indeed complex,” involving “many steps” that ultimately required “Cox to make judgment calls on whether works were derivative by giving [various] factors different weight.” This determination, the court explained, could not be made on the trial record by the court as a ministerial act, but was a question of fact for the jury. The court thus concluded that the failure to present evidence of this analysis at trial was determinative, and upheld the award.

Summary prepared by Wook Hwang and Michael Segal