Update on ISP Liability in the United States for Subscriber Infringements

Update on ISP Liability in the United States for Subscriber Infringements

Rightscorp, a Los Angeles-based provider of copyright monetization and data services, monitors the global Peer‐to‐Peer (P2P) file sharing networks to seek out and find illegally downloaded digital media on ISP networks.

US Law makes piracy illegal, and nobody is legally entitled to participate in piracy with impunity – not even Internet Service Providers (ISPs). Furthermore, the holders of Intellectual Property rights can today hold a third party – including ISPs – accountable.

Beginning is 2011, Rightscorp sent daily notices of infringement to Cox Communication. Rightscorp sent Cox detailed information regarding Cox subscribers who were repeatedly distributing BMG’s copyrighted music. Rightscorp repeatedly requested that Cox use Rightscorp’s free service to help reduce repeat infringement on the Cox network. By 2014, BMG saw three years of continuing illegal distribution of its copyrighted music by Cox subscribers and saw no evidence that Cox was terminating service to repeat infringers as required to maintain Cox’s Safe Harbor. In November 2014, BMG sued Cox for copyright infringement. In August 2016, Judge Liam O’Grady entered $25 million final judgment against Cox Communications in favor of BMG Rights Management in the Eastern District of Virginia.

This third party liability in IP rights infringement goes back a number of years in US case law, and was brought to the forefront in the 1996 case Fonovisa Inc. v. Cherry Auction, Inc. In that case, Cherry Auction operated an outdoor market in Fresno, California, with vendors paying a fee in exchange for booth space. Cherry Auction repeatedly leased space to vendors who sold counterfeit recordings. Fonovisa Records, an American Spanish language record label, repeatedly warned – and eventually successfully sued – Cherry Auction. The case advanced important concepts of secondary copyright infringement at the appellate level.

The implications of this body of law became clear to Internet service providers who saw that their facilities were being used to illegally trade copyright-protected materials. Faced with the prospect of third party liability, ISPs subsequently went to Congress to seek a shield from liability. They hit the jackpot, with the four Digital Millennium Copyright Act ‘safe harbors’. These provide protection from third party liability for: transmitting (transitory digital network communications); caching; storing (information residing on systems or networks at the direction of users); and linking (information location tools).

However, these safe harbors are not unconditional. Before an ISP can take advantage of any of the four safe harbors, it must meet two conditions: first it must refrain from inhibiting Standard Technical Measures – the means by which copyright owners may identify or protect copyrighted works – meaning that ISPs can’t thwart efforts to police copyrights.

ISPs must also adopt a Repeat Infringer Policy; a policy that terminates, in appropriate circumstances, subscribers who are repeat infringers, inform their subscribers and account holders of this policy and reasonably implement this policy.

Why does this matter? Because peer-to-peer piracy represents 20% of all North American upload traffic. This includes the infringement of movies, video games, software and books. Today, Rightscorp, a Los Angeles-based copyright monetization company, uses software that monitors the global Peer‐to‐Peer (P2P) file sharing networks to seek out and find illegally downloaded digital media.

Rightscorp is currently tracking thousands of subscribers, who it says are flagrantly and repeatedly distributing its clients’ copyrights, despite multiple notifications to the ISPs of these infringements. These downloads do not only take the form of single songs, but also of complete movies, entire albums and full discographies containing hundreds of files. This continues despite the law, and despite the ISPs’ own policies.

On behalf of digital media copyright owners, and working in conjunction with major ISPs, Rightscorp automatically sends out copyright infringement and demand notices to ISPs whose users have illegally downloaded digital media. The violators remit payment to Rightscorp for the copyright infringement and Rightscorp makes payment to the copyright owners.

Many infringers who do not pay are disconnected by their ISPs. Rightscorp’s technology system monitors the global P2P file sharing networks and sends emails to ISPs using the notice format which is specified in the Digital Millennium Copyright Act (a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO), criminalizing production and dissemination of technology, devices, or services intended to circumvent measures, commonly known as digital rights management or DRM, that control access to copyrighted works) with the date, time, song title and other specific technology identifiers to confirm the infringement by the ISP’s customer. Rightscorp uses this format because ISPs are used to dealing with it. Notices sent by Rightscorp are not required to be in any particular form, since their purpose is simply to place the ISPs on actual notice of the piracy occurring on their networks.

Under US Federal Copyright Law, once the ISP has actual knowledge of copyright infringements that take place using its network, it has specific duties in relation to the enforcement of the rights of the owners of the material in question (if the ISP desires the protections of the ‘safe harbors’). Every ISP is required by law to enforce a policy that provides, in appropriate circumstances, for termination of internet service to subscribers who become repeat infringers. Many ISPs have “terms of use” that include strongly worded policies that threaten termination of service for subscribers that use the network for illegal activity such as copyright infringement.

Some ISPs elect not to enforce those policies in any meaningful way, presumably because they want to avoid the financial impact of terminating subscribers (especially those with expensive high-capacity service of the type required by high-volume P2P infringers). These ISPs have essentially elected to take the gamble that no copyright holder will hold them accountable (or that the costs of being held accountable will be less than the profits they have reaped in return for supplying the “pipes” for piracy). Other ISPs take the opportunity to use the Rightscorp service as a component in their repeat infringer policies.

By passing along Rightscorp’s notice, and thus notifying its subscriber of an infringement, the ISP is advising the customer that based on current laws, the user who receives a notice is liable for up to $150,000 in damages.

By clicking on the link supplied, the customer is able to send a payment to Rightscorp. The company then passes on a percentage to the copyright owner. The particular instance of copyright infringement can thus be settled between them and the copyright owner quickly and affordably.

Rightscorp’s aim is to encourage rights holders to hold ISPs accountable for repeat infringement of their content by seeking termination of repeat infringers.