Cox Communications: Our $1bn copyright infringement fine should be cut by $243m because labels included derivative works

US-based internet service provider Cox Communications has asked a federal court to significantly reduce the $1 billion copyright infringement fine awarded to Sony, Universal and Warner and others in December 2019.

The music companies’ case against Cox found that the company infringed a total of 10,017 works and was fined $99,830.29 for each one.

Now, in a document filed in a Virginia federal court on August 3, and obtained by MBW, Cox claims that it should actually pay damages for 2,438 fewer works, resulting in a final number of just 7,579 infringed works.

That, says Cox, should consequently reduce its $1bn fine by over $243 million.

At $99,830.29 per work, the total fine, suggests Cox, should weigh in at $756.6m.

The case against Cox was launched by Sony, Universal and Warner in 2018 and was later won in the US District Court for the Eastern District of Virginia in December 2019.

Cox then lodged a legal motion challenging the verdict in January 2020 – suggesting that the amount of money it was being instructed to pay was “grossly excessive”.

At the start of June, US District Judge Liam O’Grady denied that motion and rebuffed the ISP’s claim that the damages were “excessive”, but conceded that the number of works used to calculate the total award (10,017) was “premature”, and that this figure would be reviewed.

Cox was granted 60 days to submit an updated list of works.

On August 3, Cox filed a response, which you can read here. In it, the company states that the court asked it to “prepare a list of overlapping works”, whereby “overlapping” means “sound recordings and musical compositions [which] count as only one work eligible for a damages award”.

Cox argues that it has identified 2,272 works that are included on both the list of Sound Recordings (PX1) and the list of Musical Compositions (PX-2) in the suit. It suggests this makes these works “presumptively derivative under the Court’s order”.

Cox says these works should be struck from the list of 10,017, unless the labels can “produce sufficient evidence to demonstrate which, if any, pairings or groupings should remain separate works”.

Cox proceeds to state that it cross-checked those “2,272 overlapping works against Plaintiffs’ copyright registrations” and has confirmed that “2,220 are, in fact, derivative”, therefore rendering them ineligible for statutory damages.

“Plaintiffs cannot object to this methodology, for Plaintiffs have endorsed it themselves,” adds Cox’s claim.

MBW understands the record labels subsequently filed its objection to Cox’s analysis earlier this month, but this opposition is sealed and therefore unobtainable.

In addition to those 2,220 works that Cox alleges are derivative, the filing states that “For another 150 titles that appear more than once on one or both of PX-1 and PX-2 – for example, the title ‘Angel,’ which appears four times on PX-1 and three times on PX-2 – overlapping pairs can be confirmed using information from the corresponding registration certificates”.

“The total number of derivative works at issue is thus 2,370.”

The filing further states that 67 works must be removed from the suit because, it alleges, that in separate lawsuit with a different US-based ISP, Charter Communications, Warner Records said it “cannot establish ownership over them”.

Lastly, Cox suggests that one additional musical composition, Shine, should be removed because it was included twice.

“Removing the 2,370 derivative works, the 67 works Plaintiffs dropped from the Charter litigation, and one duplicative work – a total of 2,438 works – results in a final number of works tally of 7,579. At $99,830.29 per work, that translates to a total damages award of $756,613,767.91.”

Concludes Cox’s filing: “The analysis set forth herein is straightforward, consisting entirely of manual comparisons of PX-1, PX-2, and the registration certificates for the works in suit.”

Back in January, when Cox lodged its motion to challenge the December 2019 verdict, the company argued that “The $1 billion award is a miscarriage of justice; it is shockingly excessive and unlawfully punitive, and should be remitted or result in a new trial.”

Cox added: “The award of $1 billion appears to be the largest award of statutory copyright damages in history. This is not by a matter of degree. It is the largest such award by a factor of eight.

“It is the largest such award for secondary copyright infringement by a factor of 40. It is the largest jury verdict in the history of this District by a factor of more than 30.

“It is by any measure a shocking verdict, wholly divorced from any possible injury to Plaintiffs, any benefit to Cox, or any conceivable deterrent purpose.”

The company also argued that the $1bn damages verdict “exceeds the aggregate dollar amount of every statutory damages award rendered in the years 2009-2016 by more than four hundred million dollars”.Music Business Worldwide