BMG accepts ‘substantial’ settlement from Cox Communications, ending legal battle with ISP

BMG has settled in its long-running copyright infringement case against the third biggest ISP in the US, Cox Communications, for a “substantial” sum.

You’d expect this settlement to run into eight figures: BMG originally won an award of $25m in damages and $8.5m in costs (ie. $33.5m in total) back in December 2015 – and, today, it says it’s “extremely happy” with the level of settlement agreed with Cox.

After securing that $33.5m victory, BMG then faced an appeal from Cox.

In February 2018, the appeal court confirmed that Cox was not entitled to safe harbor protection – the central issue in the case. However, the original verdict of a BMG victory was overturned on a technicality, due to the trial judge being accused of misdirecting the jury during their briefing.

Last week, ahead of a retrial of the case – which now won’t come to pass – US District Court Judge Liam O’Grady confirmed that BMG was entitled to use words such as “stealing” and “theft” in relation to Cox’s activities.

Despite settling, BMG says that it is confident a legal principle has been set which will mean other ISPs in the US will not be able hide behind a ‘safe harbor’ defense when copyright infringement takes place on their service, if they can’t also demonstrate that they’ve abided by best practice to tackle infringers.

Universal, Sony and Warner will be hoping that’s the case: the major label trio jointly filed to sue Cox earlier this month over alleged copyright violations – with potential damages exceeding $1bn.

In its case, BMG alleged that Cox was not entitled to a “safe harbor” defense under the Digital Millennium Copyright Act (DCMA) because, despite knowing that some of its subscribers were repeatedly infringing BMG copyrights, Cox refused to terminate the accounts of infringers.

BMG North America General Counsel Keith Hauprich, said, “This was a landmark case in which BMG took on the third biggest internet service provider in the United States to defend and establish the principle that in order to benefit from a so-called ‘safe harbor’ defense, an ISP has responsibilities. While the financial terms of the settlement are confidential, we are happy they reflect the seriousness of this case.”

He added: “Other ISPs should take note that the law gives protection to the work of artists and songwriters. We will not hesitate to take action where necessary.”

In a further statement, BMG said: “BMG succeeded in establishing in court its central claim that an ISP needs to take specific action against subscribers it knows to be repeat copyright infringers.

“BMG is optimistic that this victory will persuade other US ISPs to tighten up their procedures on copyright infringement. Having achieved a landmark ruling, BMG concluded that it made sense to accept a substantial settlement.”Music Business Worldwide

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