U.S. Appeals Court Overturns $1 Billion Cox Communications Infringement Verdict, Orders ‘A New Trial on Damages’

Years after a jury ordered Cox Communications to pay the major labels $1 billion for alleged vicarious and contributory copyright infringement, the verdict has been partially overturned on appeal – with a new, damages-centered trial on the way.

This latest twist in the marathon courtroom confrontation came to light today in a decision from the U.S. Court of Appeals for the Fourth Circuit. We’ve covered the decidedly high-stakes legal battle from the get-go – including when a jury just days before Christmas in 2019 found Cox liable for a cool $1 billion.

That sizable penalty was handed down over the internet service provider’s purported failure to effectively address the alleged piracy of its subscribers. According to the initial suit – one of several the majors have filed against internet companies – said alleged piracy, dating back to 2013 and 2014, centered on 10,017 improperly accessed works.

(The exact number of allegedly infringed works, the accuracy of infringement notices, and adjacent topics have proven contentious points throughout the appeals process, producing more than a few twists and turns in the dispute.)

Now, as mentioned at the outset, the noted appellate court has overturned part of the years-old verdict, finding that Cox isn’t liable for vicarious infringement.

“We have reversed the vicarious liability verdict because Cox did not directly profit from its subscribers’ infringement,” Judge Allison Rushing wrote, indicating also that “under the correct legal standard, no reasonable jury could find that Cox received a direct financial benefit from its subscribers’ infringement.”

And it’s because of this “legally erroneous finding” – besides its potential impact on the massive statutory damages verdict settled upon by the jury – that the appellate court opted to “remand for a new trial on damages.”

Nevertheless, the court upheld the jury’s contributory infringement verdict against Cox. This element of the decision didn’t factor for the ISP’s new argument that past infringement notices “failed to establish its knowledge that the same subscriber was substantially certain to infringe again.” Per Judge Rushing, as “Cox did not press this argument in the district court, it is forfeited for appeal.”

“The evidence was sufficient to support a finding that Cox materially contributed to copyright infringement occurring on its network and that its conduct was culpable,” reads one relevant portion of the text. “Therefore we may not disturb the jury’s verdict finding Cox liable for contributory copyright infringement.”

Lastly, the appellate court also dove into Cox’s aforesaid argument that certain overlapping works (on the compositional and recording sides as well as in terms of tracks grouped in albums) should be omitted when calculating damages.

We’ve covered this subject in detail as well; in brief, the district court previously found that because Cox hadn’t presented the pertinent information to the jury, it was unable to condense the allegedly infringed works after the fact.

“Because the evidence at trial supported the jury’s verdict,” the appellate court relayed, “we affirm the district court’s denial of judgment as a matter of law. … Nowhere in its briefing does Cox identify evidence it presented to the jury about whether infringed works were contained on albums.”