In the latest development of the BMG v. Cox case, Judge Liam O'Grady is seeking to wreck the DMCA's safe harbors by insisting that Cox shell out eight million to BMG in legal fees, claiming that the use of these safe harbors as a defense was "objectively unreasonable."
Guest post by Mike Masnick of Techdirt
We've been covering the BMG v. Cox case since the beginning, and a bad decision just got made even worse -- and more dangerous. If you've been following the case, you know that it's on appeal right now (and a whole bunch of amici have weighed in), but in the meantime, the judge in the district court, Judge Liam O'Grady, has doubled down on his opportunity to chop up and mock the DMCA's safe harbors by telling Cox it must pay $8 million to BMG in legal fees because its using the DMCA safe harbors as a defense was found to be "objectively unreasonable."
That's crazy, for a variety of reasons, but we'll get there. From the very beginning, this case was a joke, and it's unfortunate that the court didn't realize that early on. The case was filed back in 2014, and we pointed out that it was really BMG (and another publisher, Round Hill Music) acting as a proxy for copyright trolling operation Rightscorp, testing out the wacky legal theory that the DMCA requires that ISPs kick repeat infringers entirely off the internet. No one has ever interpreted the DMCA in this manner. Yes, 512(i) requires a repeat infringer policy, but it had always been widely recognized that that referred to services that hosted content, not network providers (e.g., YouTube is required to have a repeat infringer policy that kicks users off YouTube if they keep posting infringing works, but your ISP shouldn't kick you off the internet for the same thing.)
If that interpretation of the law was legit, you'd think that someone would have tried it in court before -- especially with all the whining from the MPAA and RIAA about how ISPs weren't doing enough to stop piracy. So this was a real stretch as a legal theory.
But, somewhat amazingly -- even after the legal proceedings demonstrated that the lawsuit was really about copyright trolling and exposed some heinously bad behavior by copyright troll Rightscorp -- the case went against Cox and in favor of BMG (Round Hill Music was kicked out of the case early on).
O'Grady made it pretty clear in the case that he's not a big fan of this internet thing, and doesn't see why it's a big deal if someone were to get kicked off the internet. At one point in the proceedings, Public Knowledge and EFF sought to file an amicus brief. Admittedly, many district court judges aren't fans of amicus briefs (they're more usually seen at appellate courts), but O'Grady was so dismissive of this one that it was fairly incredible:
I read the brief. It adds absolutely nothing helpful at all. It is a combination of describing the horrors that one endures from losing the Internet for any length of time. Frankly, it sounded like my son complaining when I took his electronics away when he watched YouTube videos instead of doing homework. And it's completely hysterical.
So, yeah. Judge O'Grady then said that Cox wasn't protected by the DMCA at all, which made it easy for the jury to find in favor of BMG and award it $25 million from Cox. Part of the problem was that there was some sketchy behavior by Cox (including some really dumb emails by staff who don't understand the law, but look damning), but none of it should have directly impacted the legal issues, but that behavior clearly influenced O'Grady.
And, now, because of that, O'Grady has awarded legal fees, by arguing that Cox relying on the very same DMCA safe harbors that everyone else relies on and where Cox was the only major ISP that would kick off any user for infringement, was somehow "objectively unreasonable." Think about that for a second. Let's repeat it: Cox's policy was the only one at a major ISP that kicked people off the network for repeat infringement. And every network provider regularly relies on the DMCA safe harbor to protect them from liability. And yet, Judge Liam O'Grady's opinion says that it was "objectively unreasonable." Oddly, O'Grady's opinion here is again entirely focused on the bad behavior by some Cox employees, and not the overall question of whether or not the safe harbor actually works the way O'Grady (and Rightscorp and basically no one else) seems to think it works. Rather than explaining why it's "objectively unreasonable" for Cox to rely on the DMCA's safe harbors, O'Grady basically says that the reliance was unreasonable... because of the bad behavior. That's conflating two separate things. Sanction them for bad behavior if you must, but don't let that cloud the actual legal issue.
The objective reasonableness of a party's position is an important factor in deciding whether to award fees.... In a hard-fought litigation battle such as this one, discovery disputes and fierce briefing are to be expected, and they should not be held too harshly against either party. Nonetheless, there are a few instances in which Cox's advocacy crossed the line of objective reasonableness. In particular, both Cox's attempts to obscure its practice of reinstating infringing customers, and its subsequent assertions of a deeply flawed DMCA defense evince a meritless litigation position that Cox vigorously defended.
.... Although Cox's DMCA defense cannot be categorized as frivolous or in bad faith, the Court found that "[t]he record conclusively establishes that before the fall of 2012, Cox did not implement its repeat infringer policy. Instead, Cox publicly purported to comply with its policy, while privately disparaging and intentionally circumventing the requirements."... The evidence supporting this conclusion was overwhelming, and it included "smoking gun" email conversations.... The most memorable of these contained Cox's own abuse manager stating: "F . . . the dmca!!!"... Therefore, although Cox's defensive arguments may have been reasonable as an abstract legal theory, when viewed in light of the actual facts of the case, they evince an objectively unreasonable litigation position that was nonetheless vigorously defended.
It's clear that O'Grady is hung up on the bad behavior and statements by Cox employees. And, again, what they were saying was really bad. But the real question is whether or not it actually violated the DMCA. And Cox argued, quite reasonably, that it did not. The DMCA doesn't actually require what O'Grady and BMG insist it does, and no other ISP even goes as far as Cox did (bad behavior or not). So because you have some clueless Cox employees, who were spouting off internally about how much they hate the DMCA (an opinion shared by many) and because they implemented their repeat infringer policy in a way that O'Grady felt wasn't reasonable, suddenly arguing that the safe harbors still should apply (because they should!) is "objectively unreasonable"? That's dangerous.
Again, the earlier parts of the case are already on appeal, so hopefully this will all get wiped out and this order won't matter in the long run either. But if it does stand, it's yet another serious problem that's come out of this particular case.