Landmark piracy verdict overturned: Court blocks $1 billion ruling against Cox Communications.

In a significant turn of events, a federal appeals court has overturned a $1 billion piracy verdict against cable Internet service provider Cox Communications. The ruling stems from a 2019 jury decision that found Cox liable for copyright infringement on its cable broadband network. However, the court rejected claims that Cox directly profited from users' copyright infringement, prompting a new damages trial.

Background: The case began with music copyright holders, including Sony, Universal, and Warner, suing Cox for allegedly not doing enough to combat piracy on its network and failing to terminate repeat infringers. The original jury verdict held Cox responsible for infringement of 10,017 copyrighted works.

Court Decision and New Damages Trial: While the appeals court affirmed the jury's finding of "willful contributory infringement," it reversed the vicarious liability verdict, stating that Cox did not directly profit from subscribers' acts of infringement. The court ordered a new damages trial, anticipating a substantially reduced amount to be paid to the copyright holders.

Concerns and Legal Flaws: Cox's appeal gained support from advocacy groups, including the Electronic Frontier Foundation (EFF), which argued that the initial judgment could lead to ISPs disconnecting users based merely on accusations of copyright infringement. The EFF labeled the ruling as legally flawed, emphasizing its potential impact on Internet access.

Lack of Direct Financial Benefit: The court emphasized that, for vicarious liability, a defendant must profit directly from subscribers' copyright infringement. Cox argued that it receives the same monthly fee from subscribers, irrespective of their downloading activities. The court found that continued payments for Internet service, even by repeat infringers, did not constitute a direct financial benefit from copyright infringement.

Contributory Infringement and Culpable Conduct: While the vicarious liability verdict was overturned, the court maintained that there was enough evidence to prove contributory infringement. Cox's lax enforcement and internal communications displaying disregard for laws aimed at curbing online infringement were cited as contributing factors. The court deemed Cox's conduct culpable.

Uncertain Damages: The court acknowledged the uncertainty surrounding the damages Cox might be liable for after the new trial. The initial $1 billion award was described as a "global figure" for all infringements. Statutory damages, not tied to concrete figures like lost profits, leave room for the jury's discretion, making the final amount unpredictable.

What Lies Ahead: With the case remanded, it will return to the US District Court for the Eastern District of Virginia for further proceedings. The outcome of the new damages trial will determine the financial repercussions for Cox Communications in this landmark copyright infringement case.