A $25 million dollar verdict against Cox Communications for willful contributory copyright infringement based on the actions of its end-users has reportedly caused an uptick in copyright notices containing similar claims.  

The Digital Millennium Copyright Act (“DMCA”) provides a means for ISPs to avoid such liability for their end-users infringing actions.  As explained below, the court found that Cox failed to take the necessary actions to avail itself of such protection.  The case and recent uptick emphasizes the need for ISPs to follow carefully developed DMCA based procedures for handling copyright infringement notices based on the actions of their end-users.

Background.  The DMCA creates a “safe harbor” that Internet service providers (“ISPs”) can use to protect themselves from liability for copyright infringement by their subscribers.  The DMCA provides “safe harbor” protection if the ISP registers an agent with the Copyright office to receive infringement claims and then takes certain actions upon receipt of the claims.  Among other things, in order to fall within the safe harbor, ISPs must adopt and reasonably implement a repeat infringer policy.  Under this policy, an ISP must take action against subscribers who repeatedly infringe copyrights by downloading, uploading, or sharing copyrighted works online.  Various companies’ police the Internet on behalf of copyright holders looking for infringing uses of copyrighted works including illegal downloads of music or videos.  The companies then match the IP Address to an ISP and send an appropriate notice to the ISP.

The Cox Decision.  In the Cox decision, the federal district court judge initially found that Cox Communications did not properly shield itself from liability under the DMCA.  The court determined that Cox did not “reasonably implement” its repeat infringer policy because it did not terminate accounts of repeat infringers as required by its own policy.  (For more on that decision, see our update coverage here.)  Following the judge’s decision that Cox was not entitled to the safe harbor protection, the jury found Cox liable to the copyright holders for $25 million dollars.  This was a significant victory for the music publisher, BMG, who sued Cox for infringement, and BMG’s third party agent, Rightscorp who monitored the copyrighted works on the internet for BMG.   

 Avoiding Liability.  Since the decision, ISPs have reported an uptick of notices from companies representing copyright holders claiming that the ISP may be “willfully infringing” a client’s copyright because of the failure to properly act against the end user.  This uptick in notices, including a claim of “willful infringement,” may be spurred by the decision and verdict in the Cox case. 

The Cox case demonstrates the potential harm ISPs face by failing to properly establish and implement a policy for handling copyright infringement notices regarding their end-users’ conduct consistent with the DMCA.  The DMCA provides a roadmap for ISPs to follow and thus rely on the safe harbor provisions to avoid liability—it’s up to the ISP to follow it. 

If you have questions about repeat infringer policies or DMCA compliance in general, please contact Jake Baldwin or Madeleine Goldfarb at (312) 372-3930 or jbaldwin@cinnamonmueller.com or mgoldfarb@cinnamonmueller.com or Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com.   

Judge Sets Aside Cox Set-Top Box Verdict 

            A Federal Court Judge in Oklahoma has set aside a $6.31 million dollar jury verdict against Cox Communications in a class action lawsuit based on claims that Cox violated anti-trust law by allegedly tying “Premium Cable” to its rental of set-top boxes.  The lawsuit alleged that Cox had substantial economic power in the market for “Premium Cable” and abused that power by forcing customers to lease a set-top box as a condition of purchasing its Premium Cable service.  A federal jury found against Cox in late October and awarded the plaintiff class the $6.31 million dollar verdict, which would have been trebled under anti-trust law resulting in an $18.93 million award.

However, on November 12, 2015, the judge in the case, in response to motions filed by Cox, set aside the verdict and ruled in favor of Cox.  The judge found that the plaintiffs had failed to offer sufficient evidence on two elements needed to support their claim, and, thus, the resulting verdict could not be supported.  First, the plaintiffs failed to offer evidence to show that Cox had acted in a manner which would prevent any other manufacturer from selling set-top boxes at retail and, thus, no evidence that Cox had foreclosed competition.  The fact that a set-top box could not be purchased within the market, through no fault of Cox, did not equate to an exploitation of the market or a stifling of competition.  Moreover, there was no evidence to show that any action by Cox led to a foreclosure of commerce.  Second, the plaintiffs failed to establish another element, namely that they were injured by the alleged tying arrangement.  The plaintiffs were required to show that the claimed injury arose from the alleged competition-reducing aspect of Cox’s behavior, and, because there was no evidence that a competing entity wished to sell set-top boxes at retail, the plaintiffs could not establish any harm caused by the alleged tying activity.

            The plaintiffs have appealed the decision to the United States Court of Appeals for the 10^th Circuit and Cox has cross-appealed.  A definitive briefing schedule has not yet been issued, and it is uncertain when the matter might be resolved on appeal. If you have questions about the proceeding, please contact Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com

FCC Continues Expansion of Accessibility of User Interfaces 

            Late last year, the FCC adopted an Order implementing rules that require cable operators and other MVPDs to provide certain consumer notices and documentation about accessibility features of navigation devices.  The rules are not yet effective, but given the extensive new compliance obligations, now is the time for MVPDs to begin taking steps to understand and prepare for compliance with the rules.

            Background.  The Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”) mandates, among other things, the accessibility of user interfaces on digital apparatus and navigation devices used to view video programming.  The FCC has issued rules implementing the CVAA over the last several years, including a 2013 Order requiring MVPDs that offer navigation devices to offer devices that include features allowing for audible descriptions of on-screen menu functions and easy access to closed-captioning capabilities – so-called “talking guides.”  The FCC also issued video description rules, which require audio descriptions of visual information presented on-screen over a secondary audio programming channel, and emergency information video description rules, which require that MVPDs pass through audio translations of on-screen emergency information presented in on-screen crawls during non-news programming screen.  Our updates on those rules are available here, here, and here.  Accessibility has been and remains is a key part of FCC Chairman Wheeler’s agenda for his final year in office.

            The latest User Interface Order adopts rules requiring manufacturers of navigation devices to include functions allowing visually-impaired users to access and use on-screen text menus and other “visual indicators” and requiring MVPDs to provide consumer notifications about accessibility features in the navigation devices they provide and to designate a contact for addressing questions about the availability of, and instructions for using, accessible equipment.  In addition, the rules impose documentation and training obligations on MVPDs.

            Customer notices.  The new rules require MVPDs that provide navigation devices to notify consumers that devices with accessibility features are available to visually impaired users at their request.  Specifically:

• Consumer inquiries.  When providing information about equipment options in response to customer inquiries about service, accessibility, or other issues, MVPDs must “clearly and conspicuously” inform consumers about the availability of accessible navigation devices.

• Contact person.  MVPDs must designate a contact person, office, or entity to handle questions about accessible navigation devices. The contact must be able to take requests for accessible devices and separate solutions and to answer questions about the availability of accessible equipment, including directing consumers to a place where they can locate information about how to activate and use accessibility features.

• Website notices.  MVPDs must also provide notice on their websites about the availability of accessible navigation devices, prominently displaying information about the devices and separate solutions on their websites so that it’s available to all current and potential customers.  The website notice must publicize the availability of accessible devices and separate solutions and explain the process for requesting accessible equipment and the contact for making those requests.  The website information must be provided in a format that is accessible to people with disabilities.

Documentation and Training.  In addition, MVPDs must, “if achievable,” ensure access to information and documentation, including user guides, bills, installation guides for devices installed by customers, and product support communications, regarding both the product generally and its specific accessibility features.  Further, MVPDs must also take “other achievable steps as necessary,” including:

• Providing a description of accessibility and compatibility features of the product on request, including in alternate formats at no additional charge.
• Providing end-user product documentation in alternate formats on request at no additional charge.
• Ensuring usable customer support and technical support at no additional charge.

Contact information for obtaining the information above must also be provided. 

In internal training programs, MVPDs must consider (1) accessibility requirements of individuals with disabilities, (2) means of communicating with individuals with disabilities, and (3) solutions for accessibility and compatibility.

In the context of these rules, “achievable” means that an action is achievable “with reasonable effort or expense.”  The FCC will determine, on a case-by-case basis, whether a step was achievable or not.  For this reason, documentation about any determination of achievability will be important in the event a complaint is filed.

Obtaining Required Information and Documentation.  The new rules also apply to manufacturers of navigation devices, and these manufacturers are required to provide information and documentation about their devices.  MVPDs will need to obtain the required information and documentation from the manufacturers.

Effective Dates.  The customer notice rules take effect 30 days after the Order is published in the Federal Register.  We will issue additional updates on the effective date of the customer notice rules, which we anticipate will be published in the near term.

The documentation and training rules will take effect after approval by the Office of Management and Budget and announcement of an effective date in the Federal Register.   We will issue additional updates on the effective date of the documentation and training rules, which may take a few additional months.

If you have questions about the new user interface rules or accessibility compliance in general, please contact Jake Baldwin or Scott Friedman at (312) 372-3930 or jbaldwin@cinnamonmueller.comsfriedman@cinnamonmueller.com or Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com.