Cox found liable in piracy dispute with music publisher

NEW YORK (Reuters) - A U.S. jury on Thursday ordered Internet service provider Cox Communications to pay $25 million for copyright infringement in a dispute with music publisher BMG Rights Management.

The jury in Alexandria, Virginia also said Cox’s infringement was willful.

The decision, which came after a two-week trial, could have a broader impact on how Internet companies conduct their business as BMG pursued an unusual strategy of taking on an Internet service provider instead of the alleged copyright infringers themselves.

Cox spokesman Todd Smith said the company was reviewing its legal options, including the possibility of an appeal. “We are unhappy with the decision,” he said.

A representative for BMG could not immediately be reached.

BMG sued privately held Cox in November 2014, claiming the company was liable for infringement related to its customers’ unauthorized uploading or downloading of 1,398 of BMG’s songs using the BitTorrent file-sharing system.

BMG, which relies on a company called Rightscorp Inc to identify alleged infringers and alert Cox to their activities, said in its complaint that Cox knew about and profited from its customers’ violations between 2012 and 2014.

A central claim to BMG’s lawsuit was that Cox refused to cut off service to repeat infringers, which Internet providers must do under federal law to qualify for immunity from copyright infringement claims. This allowed Cox to reap large profits at the expense of copyright owners, BMG alleged.

Cox denied BMG’s claims. It said BMG, a unit of German media group Bertelsmann, could not prove that its customers directly infringed because Rightscorp’s system identifies only Internet addresses, not specific infringers.

On Thursday, the jury found that while Cox’s customers used its service to infringe BMG’s copyrights, Cox itself contributed to those violations.

Another company, Round Hill Music, was also a plaintiff in the case, but U.S. District Judge Liam O’Grady recently ruled that it did not have exclusive rights in any of the copyrights and did not have standing.

The case is BMG Rights Management LLC and Round Hill Music LP v. Cox Enterprises Inc et al, in the U.S. District Court for the Eastern District of Virginia, No. 14-cv-1611.

Reporting by Andrew Chung; Editing by Alexia Garamfalvi and Meredith Mazzilli