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Appeals Court Decision is Good News for Authors

Safe Harbor laws - the authors guild

Safe Harbor laws - the authors guild

Ensuring that DMCA safe harbors protect rightsholders as well as internet providers is essential for authors in their fight against online piracy. After a decades-long pattern of courts stripping away all protections for copyright holders in DMCA safe harbors, leaving them only the whac-a-mole notice-and-takedown system, a recent Court of Appeals decision takes an important (and long overdue) step to hopefully reverse that trend. The Fourth Circuit’s decision in BMG Rights Management (US) LLC v. Cox Communications, Inc. requires internet service providers to have and enforce reasonable repeat-infringer policies. While that might not seem surprising since it is one of the requirements in the statute for safe harbor eligibility, prior cases have rendered other eligibility requirements meaningless—allowing internet services to profit from user infringement with no repercussions.

A “Thirteen-Strike” Repeat-Infringer Policy Is Not Reasonable

The present case arose out of BMG Rights Management and Rightscorp Inc.’s efforts to compel Cox Communications to terminate subscribers engaged in high-volume infringement (by using BitTorrent peer-to-peer file sharing). In 2011, Rightscorp sent Cox numerous notices concerning infringement by Cox users, in response to which Cox issued warnings to its users, followed by a temporary account termination for non-compliance. This created just the sort of whac-a-mole ordeal for rightsholders which the Guild has protested in the past, and which we suggested be replaced with a notice-and-stay-down approach.

Importantly, Cox did not automatically terminate any users for repeated infringement. At the time, Cox had a “thirteen-strike policy” in place—which meant that only after a thirteenth suspension, would Cox even consider terminating an infringing user’s account. This, as Judge Motz notes in her opinion, was in addition to several other limitations in Cox’s repeat-infringer policy, such as restrictions on the number of notices it processed from any copyright holder in one day, counting only one notice per subscriber per day toward response escalation, and resetting a user’s “thirteen-strike counter every six months.” Cox used its policy to block all takedown notices from Rightscorp. And, when BMG and Rightscorp sued for contributory infringement, Cox asserted the safe harbor defense under DMCA Section 512(a).

Neither the District Court, where the case originated, nor the Fourth Circuit Court of Appeals were convinced by Cox’s argument that its “thirteen-strike policy” was reasonable. Judge Motz’s opinion astutely observes that “[a]n ISP cannot claim the protections of the DMCA safe harbor provisions merely by terminating customers as a symbolic gesture before indiscriminately reactivating them within a short timeframe.” Judge Motz recognized the profit motive behind Cox’s inadequate policy in her decision, quoting a comment by a Cox manager instructing an employee not to terminate a repeat infringer’s account: “The customer pays us $400/month….[E]very terminated Customer becomes lost revenue.”

Courts, unfortunately, have tended to interpret the DMCA—especially, its safe harbor provisions—in ways that have made it virtually impossible for authors and creators to make any meaningful use of the DMCA against infringers. As we stated in our comments in response to the Copyright Office concerning the impact and effectiveness of the DMCA, “The safe harbors, rendered toothless by the courts, have allowed businesses to design sites that invite pirated content posted by third-party users.”

The Fourth Circuit decision addresses—and indeed satisfies—many of our concerns about interpretations of the DMCA that impose only a de minimis burden on ISPs and web platforms to police their networks for piracy, creating an online environment where piracy is flourishing to the detriment of creative industries like publishing, film, and music. As of last year, piracy had cost the publishing industry $315 million in lost sales. The damage is exaggerated for authors, for whom each lost sale translates to lost income.

Requiring ISPs to permanently terminate users that repeatedly engage in infringement is a sensible approach in keeping with congressional intent behind the DMCA. And the Fourth Circuit has held, in no uncertain terms, that companies that allow user-posted content must do more to qualify for the safe harbor. While the binding effects of this decision are limited to the Fourth Circuit, we hope that sister jurisdictions will consider its reasoning and import on similar cases within their purview.