Cox must pay $8M in fees on top of $25M jury verdict for violating DMCA

A federal judge has ordered (PDF) Cox Communications to pay a bruising $8 million in legal fees to BMG Rights Management after the ISP lost a landmark case over Internet piracy.

The legal case began in 2014, when music publishers BMG and Round Hill Music took the long-threatened step of actually suing a major Internet provider for its users’ infringement, saying that Cox didn’t do enough to stop the piracy. BMG and Round Hill were both clients of Rightscorp, an anti-piracy outfit that produces millions of e-mail notices to consumers alleged to have infringed its clients’ copyrights by using BitTorrent software. Rightscorp warns ISPs that if they don’t forward the notices to subscribers, they’re risking a massive lawsuit.

Turns out, in this case, the threat was real. After a year of litigation, the case went to trial in December 2015. Before the trial, the judge had already ruled that Cox unlawfully blew off key provisions of the Digital Millennium Copyright Act and so wasn’t protected by its “safe harbor” against litigation. The jury found against Cox and ordered the cable company to pay $25 million. That result is now on appeal, but in the meantime, US District Judge Liam O’Grady considered various post-trial motions, including one in which BMG requested legal fees.O’Grady chose to award BMG $8.38 million in attorneys’ fees, which is 80 percent of what the company asked for. BMG’s motion for “nontaxable expenses” like travel expenses and expert witness fees, which asked for nearly $3 million, was denied. BMG’s request for court costs such as transcripts, copies, and filing fees was granted, with the judge finally arriving at $146,790.76 after making various deductions.

It’s generally difficult to collect attorneys’ fees in federal civil litigation but somewhat easier in a copyright case.

Smoking Guns

“In a hard-fought litigation such as this one, discovery disputes and fierce briefing are to be expected, and they should not be held too harshly against either party,” wrote O’Grady. “Nonetheless, there are a few instances in which Cox’s advocacy crossed the line of objective reasonableness.”

O’Grady cites Cox’s provision of an “unqualified” witness who didn’t know about the company’s “abuse practices.” Another Cox witness had “selective recollection” when it came to the term “soft termination”—Cox not going far enough to terminate the accounts of repeat infringers—which was important to BMG’s case.

While Cox’s DMCA defense was not “frivolous or in bad faith,” the court found that Cox didn’t implement its repeat-infringer policy until 2012, “intentionally circumventing the DMCA’s requirements.” In the judge’s view, the evidence was “overwhelming” and included “smoking gun” e-mail conversations, including Cox’s own abuse manager saying “F— the dmca!!!” at one point.

“Although Cox’s defensive arguments may have been reasonable as an abstract legal theory, when viewed in light of the actual facts of the case, they evince an objectively unreasonable litigation position that was nonetheless vigorously defended.”The judge also found that Cox’s motivation was willful. “The jury found that Cox knew, or should have known, that its behavior was wrong and continued in spite of that awareness,” wrote O’Grady. “Fees are appropriate in order to deter future violations.”