Four Lessons For Adult UGC Sites From BMG v. Cox
RICHMOND, Va. – A recent copyright ruling by the Fourth Circuit Court of Appeals underlines several aspects of the “safe harbor” provisions of the Digital Millennium Copyright Act (DMCA) which are important to understand for those who operate websites which depend on the protection of those limitations of liability.
In the case at issue, BMG Rights Management sued Cox Communications, Inc., seeking to hold Cox contributorily liable for infringements of BMG’s copyrights committed by subscribers to Cox’s internet services.
After the discovery phase, the district court found that Cox had not produced evidence it had implemented a policy which would entitle the ISP to a statutory safe harbor defense and granted BMG summary judgment on that issue.
At trial, the jury found Cox liable for willful contributory infringement and awarded BMG $25 million in statutory damages. Cox then appealed, arguing that the district court had erred in denying it a safe harbor defense, and that the court incorrectly instructed the jury.
While Judge Diana Motz concurred the trial court had given faulty instructions to the jury, the portion of her ruling which is more relevant to operators of user-generated content sites like adult tubes is the fact she upheld the district court’s ruling that Cox is not entitled to statutory safe harbor in the case.
Within Motz’s ruling, there are several lessons worth noting for anyone whose site or platform relies on user-generated content.
Stating a repeat offender policy isn’t enough; you must enforce the policy, as well. To satisfy the requirements of § 512(i)(1)(A) of the DMCA, ISPs like Cox must show they have “adopted and reasonably implemented… a policy that provides for the termination in appropriate circumstances of subscribers… who are repeat infringers.”
To comply with this requirement, Cox established a “thirteen strikes” policy with respect to its subscribers, which is detailed at length in Motz’s ruling, and which failed to impress Motz in terms of both its efficacy and the extent to which it meets the letter and spirit of the safe harbor requirement which it purports to fulfill.
“The effectiveness of Cox’s thirteen-strike policy as a deterrent to copyright infringement has several additional limitations,” Motz wrote. “Cox restricts the number of notices it will process from any copyright holder or agent in one day; any notice received after this limit has been met does not count in Cox’s graduated response escalation. Cox also counts only one notice per subscriber per day. And Cox resets a subscriber’s thirteen-strike counter every six months.”
More to the point, Motz wasn’t persuaded Cox was actively enforcing the policy, even in its fundamentally flawed form.
“Cox formally adopted a repeat infringer ‘policy,’ but, both before and after September 2012, made every effort to avoid reasonably implementing that policy.” Motz wrote. “Indeed, in carrying out its thirteen-strike process, Cox very clearly determined not to terminate subscribers who in fact repeatedly violated the policy.”
The bottom line: If you operate a UGC site, simply declaring you have a policy for dealing with repeat infringers isn’t enough; if you’re ever sued on that point, you’d better be able to show you enforce the policy consistently, as well.
“Repeat infringer” does not mean the same thing as “fully adjudicated repeat infringer.” In its appeal, Cox also argued that just because one of its subscribers had been repeatedly accused of violating a BMG copyright, this didn’t make the subscriber a “repeat infringer” under the DMCA.
Instead, Cox argued, the court should interpret “repeat infringer” to mean someone who had been repeatedly found to be infringing through some sort of litigation. This argument didn’t fly with Motz, either.
“Cox contends that because the repeat infringer provision uses the term ‘infringer’ without modifiers such as ‘alleged’ or ‘claimed’ that appear elsewhere in the DMCA, ‘infringer’ must mean ‘adjudicated infringer,’” Motz wrote. ‘But the DMCA’s use of phrases like ‘alleged infringer’ in other portions of the statute indicates only that the term ‘infringer’ alone must mean something different than ‘alleged infringer,’ otherwise, the word ‘alleged’ would be superfluous.”
Further, Motz noted later in her decision, “Cox does not cite a single case adopting its contrary view that only adjudicated infringers can be “repeat infringers” for purposes of the DMCA.”
In addition to the obvious lesson here (that “repeat infringer” does not mean someone who has been repeatedly adjudicated to be an infringer), this should also make it clear that if you’re going to try to split statutory terminology hairs with a federal judge, you’d be well-served to show her some case law in which your interpretation has been endorsed by another court.
Ignoring take-down notices doesn’t help. One of Cox’s problems in this case stemmed from how it dealt with Rightscorp, the company retained by BMG to send out the publisher’s take-down notices.
In its notices which it requests ISP forward to subscribers who are alleged to be infringers, Rightscorp included a settlement offer. Cox objected to this practice and told Rightscorp it would not forward notices which included such language. Rightscorp continued to send notices with the settlement language included, leading Cox to blacklist Rightscorp, and to cease notifying subscribers of Rightscorp’s complaints. Not only that, Cox itself stopped reading the Rightscorp notices, altogether.
As Motz noted in her ruling, “Cox never considered removing the settlement language itself or using other means to inform its subscribers of the allegedly infringing activity observed by Rightscorp.”
In its appeal, Cox argued that notices it received from Rightscorp after September 2012 – after it had stopped reading and forwarding the notices from Rightscorp – do not “prove actual knowledge of repeat infringement.” Motz wasn’t having any of that argument, either.
“Cox bears the burden of proof on the DMCA safe harbor defense,” Motz wrote. “{T}hus, Cox had to point to evidence showing that it reasonably implemented a repeat infringer policy. The emails show that Cox internally concluded that a subscriber should be terminated after the next strike, but then declined to do so because it did not want to lose revenue. In other words, Cox failed to follow through on its own policy.”
The big takeaway here: Simply not reading take-down notices doesn’t aid your argument that you lacked “actual knowledge” of alleged repeat infringements. Worse still, doing this may well make you look willfully ignorant to the judge hearing the case, should you get sued.
Some conversations are best held face-to-face. While, given the facts of the case, it was unlikely Motz would have ruled in Cox’s favor even if certain Cox-internal emails hadn’t come to light, the contents of those emails certainly didn’t aid Cox’s case.
As she concluded that Cox “very clearly determined not to terminate subscribers who in fact repeatedly violated the policy,” Motz subsequently noted the “words of Cox’s own employees confirm this conclusion.”
In a 2009 email, Motz observed, “the executive managing the Abuse Group, a team tasked with addressing subscribers’ violations of Cox’s policies, explained to his team that ‘if a customer is terminated for DMCA, you are able to reactivate them,’ and that ‘after you reactivate them the DMCA ‘counter’ restarts.’”
The email stated this was to be considered “an unwritten semipolicy.”
In another email, the same executive “explained to another representative: ‘Once the customer has been terminated for DMCA, we have fulfilled the obligation of the DMCA safe harbor and can start over,’” Motz wrote. “He elaborated that this would allow Cox to ‘collect a few extra weeks of payments for their account.’”
What should readers take from this portion of the judge’s ruling? Aside from the obvious danger of interpreting the DMCA’s safe harbor provisions in such a self-interested fashion, it strongly suggests certain conversations about legal compliance are better had in person, rather than leaving a written record documenting the fact your company is creatively seeking out ways to circumvent the requirements of section 512.