St. Louis IP attorney Joe Walsh recently spoke with Intellectual Property Watch about the recent decision in BMG Rights Management v. Cox Communication, which held that Internet service providers (“ISPs”) are required to help copyright owners stamp out infringement.  The ruling gives copyright owners, including large music publishers and film companies (and their authorized agents), a powerful new weapon in the war against online copyright infringement and illegal file sharing.

To avoid liability for contributory infringement, ISPs need to do 3 things: 1) have an established procedure for handling infringement notices received from copyright owners; 2) reasonably follow the procedure they adopt; and 3) “…in appropriate circumstances” terminate subscribers who are “repeat infringers.”

In its first defense, ISP Cox argued that it was entitled to protection under the safe harbor provision of the Digital Millennium Copyright Act (DMCA) in refusing to forward notices from BMG’s agent (Rightscorp — a company sometimes described as a “copyright troll”) because Cox objected to the fact that the notices included an offer to settle the accused infringement with the subscriber for a nominal fee of $20 or $30.  Cox notified BMG of this objection and asked BMG to remove the settlement language from its notices.  BMG refused to remove the language.  Thereafter, Cox ignored millions of notices received from Rightscorp — BMG’s agent.

In rejecting Cox’s first defense, the Court did not address Cox’s concern about the settlement language in BMG’s notices and observed that failing to forward any of the millions of BMG notices was tantamount to Cox not having a process or system as statutorily required to obtain insulation from liability.

In its second defense, Cox argued that the law in question, i.e., 17 U.S.C. §512 et. seq., fails to define or establish any standards for what constitutes “infringement.”  Cox went on to argue (unsuccessfully) that, in order for it to have any responsibility to notify its subscribers and/or terminate their subscriptions on the basis of “repeated” infringement, there must be an “adjudication” of infringement.

The Court held against Cox again on its second defense, giving the terms copyright “infringer” and “repeat infringers” their ordinary meanings and relying upon Black’s Law Dictionary stated definition that an infringer is “[s]omeone who interferes with one of the exclusive rights of a … copyright” holder.  In short, one who infringes a copyright …. A repeat infringer, then, is one who infringes a copyright more than once.”

This case raises a number of substantial questions, including:

• The conduct required of ISPs in order for them to avoid liability for the purported copyright infringements of their subscribers
• The general equating of IP addresses and people
• Fundamental fairness issues of equating accused infringement with adjudicated infringement
• The possible catalytic effect the decision is likely to have on copyright trolling activity

Other problems with the ruling center on the fact that not all third party accusations are accurate and not all copying is infringement. For instance, “a copy can be fair use,” said Walsh. In a famous example, Warner Brothers hired a third party company to monitor its copyrights. Said company then claimed Warner Brothers was infringing its own legitimate, copyrighted content.

Courts increasingly trust accusers which, in turn, increasingly benefits copyright owners. This puts additional pressure on ISPs to crack down on alleged copying and potentially terminate accounts that receive numerous accusations.  Invariably, this will lead to higher Internet access costs to consumers.

Rather than the copyright holders having all of the clout in deciding who gets kicked off the Internet, Walsh proposes a middle ground option: “Perhaps we could have an expedited proceeding for alleged copyright infringers akin to Inter Partes Reviews for patent infringement,” he suggested. “If this cannot be done, and the market does not create a more tenable solution, then a revision to the copyright statute is probably in order to deal with the 21^st century issues that couldn’t possibly be fully appreciated in 1998 when the DMCA was enacted” says Walsh.

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