Record Labels Ask Court to Deny Cox’s Challenge of ‘$1 Billion’ Piracy Verdict

Internet provider Cox Communications wants a do-over of the piracy liability trial, where it was ordered to pay $1 billion in damages to the record label plaintiffs. The ISP previously argued that 'concealed' evidence warrants a new look at the case. According to the music companies, however, Cox is grasping at straws, relying on speculation in the hope of getting a do-over.

Last month, several major record labels sued Internet provider Verizon over its subscribers’ alleged copyright infringements.

The companies alleged that the Internet provider “buried its head in the sand” while knowingly providing its Internet services to a massive community of online pirates.

This is not the first case of this kind. In recent years, several Internet providers were accused of the same. These claims are grounded in the DMCA, which requires ISPs to take reasonable steps to stop persistent pirates on their networks. Failing to implement such a ‘repeat infringer’ policy can have costly consequences.

Cox as ‘Billion Dollar’ Poster Child

Internet provider Cox Communications is familiar with the potential damage by now. In 2019, a Virginia jury held Cox liable for pirating subscribers because it failed to terminate subscriber accounts after repeated accusations, ordering the company to pay $1 billion in damages.

Cox pursued various avenues to appeal the verdict and earlier this year booked a partial victory. The Court of Appeals confirmed that the ISP was liable for contributory infringement in respect of its subscribers’ piracy, but reversed the vicarious copyright infringement finding. A new trial will determine appropriate damages under these new circumstances.

With a billion dollars at stake, Cox is leaving no stone unturned. The company is currently drafting a Supreme Court petition and has also appealed the denial of Rule 60 motions at the Fourth Circuit Court of Appeals, arguing that the music companies concealed evidence and failed to disclose information.

Rehashed Infringements & Reappearing Source Code

Without going too deep into the intricate details of the allegations, Cox argues that the record labels’ piracy tracking company MarkMonitor recreated evidence. Specifically, the music files that were used as the basis of copyright infringement notices between 2012 and 2014 were initially deleted.

In 2016, the music files were redownloaded based on the original hashes. This issue was also raised in the record labels’ lawsuit against Charter, where it was first uncovered. This could have turned the case upside down, but the lawsuit was settled before trial.

According to Cox, this settlement might suggest that more is going on, but when it pointed this out to the court in 2022, requesting ‘relief from judgment’, the court denied its Rule 60 motion.

Cox later learned that the labels had also failed to disclose key portions of MarkMonitor’s source code in a related lawsuit against another ISP, Bright House. This also impacted the Cox case, and the ISP again requested relief from judgment.

According to the ISP, the source code issue could be another smoking gun, as the Bright House lawsuit was also settled at the eleventh hour. The court disagreed, however, and denied the second Rule 60 motion.

Labels: There’s Nothing New

In May, the ISP appealed these Rule 60 denials, asking the court to issue a new trial so the ‘concealed’ evidence could be tested and scrutinized properly. Reopening the case at this stage makes sense, it argued, as the appeal that concluded in February also reopened several key questions.

This week, the record labels responded to Cox’s request, arguing that Cox had a fair trial and that the contested issues not the ‘smoking guns’ they’re made out to be.

“Cox lost this case, in a fairly litigated trial where it had every opportunity to defend itself,” the labels write.

“Cox (and its appellate counsel) clearly regret some of its trial team’s decisions. But Rule 60(b) does not provide a pathway to re-try a case with the benefit of hindsight. The District Court correctly recognized this. This Court should affirm.”

The music companies don’t contest that the music files were redownloaded after the fact. They also confirm that some source code was initially not shared as evidence. But this doesn’t turn the case, they say, as the District Court previously recognized.

Hashes & Source Code

The labels state that they never denied that the hashes were redownloaded and point out that this should have been clear from the testimony. The fact that some files were not available anymore, and could not be redownloaded, is no game changer either.

According to the plaintiffs, it is irrelevant whether the music tracks are originals or copies, since hashes are “more unique than DNA”. This means that the redownloaded files are the same as the deleted originals.

“Because these 2016 files match the infringing files by ‘hash value,’ they are not just copies of those earlier files; they are those files. It makes no difference when they were downloaded,” the labels write.

Cox’s suggestion, that the labels don’t have any evidence that MarkMonitor’s hash value database is sound, is a red herring, not a smoking gun.

“That is a red herring. The ‘soundness of MarkMonitor’s hash value database’ does not turn on when the Hard Drive files were downloaded because, again, as fully explained at trial, files with matching hash values are identical regardless of when downloaded,” the labels write.

In a similar vein, the undisclosed source code is no game changer either. While the labels settled their lawsuit with Bright House after this revelation, Cox has no real evidence to revisit the matter, only speculation.

“Cox offers no real argument that the portion of source code is material or would have likely changed the outcome of this lengthy jury trial,” the labels write.

“Cox merely speculates that the missing portion of code might have the potential to ‘reveal a fault in MarkMonitor’s process of constructing a database of allegedly infringing hash values’. Cox is grasping at straws.”

It is now up to the court to decide whether Cox will get a new trial or not. Whatever the outcome, this case is far from closed. In a few days, the ISP is expected to file its Supreme Court petition, which will undoubtedly receive support and opposition from several other companies and organizations.

Evidence issues aside, the ISP strongly believes that the current verdict is dangerous, as it puts innocent people at risk of losing their Internet access, based on unadjudicated claims from rightsholders.

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A copy of the music companies’ reply brief, filed at the Fourth Circuit Court of Appeals, is available here (pdf)

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