Record Labels and RCN Open to Settling Piracy Liability Lawsuit

Under US copyright law, Internet providers must terminate the accounts of repeat infringers “in appropriate circumstances.”

Historically, Internet providers rarely applied such a drastic measure, but under pressure from lawsuits, many ISPs are now acutely aware of their obligations.

Music Companies sued RCN

Internet provider RCN is one of the providers targeted by this legal campaign. Four years ago, the company was sued by several major music industry companies including Arista Records, Sony Music Entertainment, Universal Music, and Warner Records.

The music companies alleged that RCN wasn’t doing enough to stop subscribers from pirating on its network. Instead of terminating the accounts of persistent pirates, the Internet provider looked away, they argued.

The stakes in these liability lawsuits are high. Internet providers face hundreds of millions of dollars in damages claims, while tens of thousands of Internet subscribers are at risk of having their accounts terminated.

Exploring a Potential Settlement

RCN initially responded to the allegations with a counterattack. The company accused the RIAA and its anti-piracy partner of sending ‘false and fraudulent’ DMCA notices, arguing they shouldn’t serve as evidence for disconnections.

This countersuit ultimately failed. In two instances, a New Jersey federal court concluded that RCN failed to show that it was financially hurt by any incorrect or incomplete DMCA notices. As such, the case moved forward.

These cases can lead to a high-profile trial, but it appears that both parties are exploring options to end the matter before it gets that far. Specifically, they are considering a potential settlement.

“More recently, the Parties have communicated directly about the possibility of settlement but are not currently engaged in settlement discussions. The Parties are open to discussing potential settlement avenues with the Court,” they wrote in a status report to the court last week.

The settlement option is serious, both parties reiterated in a court hearing this week. And to help the process, U.S. District Court Judge Robert Hirsch appointed a mediator yesterday.

“Counsel and the parties (including individuals with settlement authority) shall attend mediation sessions as requested by the Mediator,” Judge Hirsch writes.

While we don’t know the positions of both parties, rightsholders have won similar lawsuits in the past which puts the music companies at an advantage. However, with a settlement, RCN is likely to avoid a Cox-style billion-dollar verdict.

Filmmaker Suit ‘Expands’

An eventual settlement won’t end all piracy-related trouble at RCN. The provider is also involved in a similar lawsuit with several movie companies; they recently tried to involve Reddit users in their evidence-gathering efforts.

This lawsuit continues, and a few days ago the plaintiffs filed an amended complaint in which they demand millions of dollars in damages. The complaint also calls for a site-blocking injunction targeting popular pirate site domains such as YTS, The Pirate Bay, and 1337x.

The amended complaint now lists high-profile law firm Foley and Lardner among the plaintiffs’ attorneys and adds new piracy evidence from Facterra. The evidence-gathering company, owned by American Films, was also added to a similar lawsuit against Internet provider WOW.

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A copy of the status update in the lawsuit between the music companies and RCN is available here (pdf). The proposed amended complaint of the filmmakers against RCN can be found here (pdf)