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When a Virginia jury ordered internet provider Cox to pay $1 billion in damages for failing to take appropriate actions against pirating subscribers, shockwaves rippled through the ISP industry.

The verdict, in favor of major record labels including Sony and Universal, was a catalyst for many other ‘repeat infringer’ lawsuits. This resulted in yet more multi-million dollar claims and awards, with many still in the pipeline today.

Meanwhile, Cox did all it could to fight the verdict. This resulted in some small wins, including a recent ruling that the billion-dollar damages calculation needs a re-evaluation. The liability ruling stands, however.

In a final attempt to find the law on its side, last year Cox petitioned the U.S. Supreme Court. In essence, it argued that an ISP shouldn’t be held liable simply because it knew that its subscribers were downloading and sharing pirated content. Cox also challenged the assertion that mere knowledge of subscriber piracy constitutes ‘willful’ copyright infringement.

The U.S. Solicitor General backed Cox’s request, and in June the Supreme Court allowed the ISP’s case to proceed. At the same time, the Supreme Court denied a cross-petition from the record labels, who sought to strengthen the existing verdict.

Cox Files Supreme Court Brief

Cox submitted its brief to the Supreme Court last Friday, asking it to overturn the lower court’s ruling. The ISP presents two questions that have broad implications for ISPs, millions of their subscribers, rightsholders, and potentially other online services.

The first question relates to contributory infringement. Specifically, whether an ISP can be held liable for “materially contributing” to copyright infringement if it fails to terminate accounts of allegedly pirating subscribers.

In its brief, Cox argues that the Fourth Circuit wrongly concluded that it was liable. The ISP notes that contributory copyright infringement requires proof that the company engaged in ‘affirmative conduct’ that facilitated the misconduct. Failure to terminate accounts of allegedly pirating subscribers is not sufficient proof.

“In short, Cox did not engage in a single affirmative act with the purpose of furthering infringement—and gained nothing from users’ infringing conduct. Cox simply provided communications infrastructure to the public on uniform terms,” Cox writes.

The ISP adds that terminating Internet access is a draconian measure with potentially devastating consequences. This duty shouldn’t be imposed by the court but by Congress.

“Only Congress is empowered to create a duty to terminate internet service that carries such profound implications for members of the public and the nation’s economy,” Cox argues in its brief.

Only Congress

The second question relates to whether Cox’s actions were willful, which is relevant to damages which ultimately led to the $1 billion verdict.

Here, Cox argues that willfulness requires proof that the defendant knew its own conduct (not terminating repeat infringers) was illegal. According to Cox, there is no evidence that this is the case, pointing to an anti-infringement program it developed to counter piracy on its network.

Mass Terminations & Internet Police

The full brief presents a wide array of arguments. According to Cox, it’s clear that the lower court’s ruling should be reversed. If not, millions of Americans risk losing Internet access over unvetted third-party claims.

“If allowed to stand, the Fourth Circuit’s one-two punch will yield mass evictions from the internet. ISPs confronting steep penalties will have no choice but to terminate the connections of homes, barracks, hospitals, and hotels, upon bare accusation,” Cox writes.

According to Cox, the ramifications go further than just copyright infringement. Liability could spread to other types of misconduct, requiring ISPs to take action to avoid being held responsible. That would effectively turn these companies into the internet police.

“Under the Fourth Circuit’s reasoning, once an aggrieved party sends an ISP a notice asserting any manner of customer wrongdoing, the ISP is a willful accomplice for every subsequent customer misdeed,” Cox notes.

“That notion turns internet providers into internet police and jeopardizes internet access for millions of users.”

Cox’s Supreme Court brief is just the opening salvo, and the record labels will undoubtedly present a different interpretation of both the facts and the law. Their brief is due on October 15 and will offer a different perspective on the lower court’s ruling. After that, the Supreme Court will hear oral arguments from both sides.

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A copy of Cox Communications’ brief to the Supreme Court is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.