Legal battles between copyright holders and Internet providers are not new. In most countries these disputes revolve around site blocking but, in the US, the vocal point lies elsewhere.
Over the past years, several major ISPs have been sued for failing to terminate the accounts of alleged repeat copyright infringers.
These lawsuits are serious business. Late last year, for example, a jury found Cox liable for the infringements of its customers, awarding a billion dollars in damages to several record labels. While the judgment is being appealed, other ISPs are on high alert.
This is also true for Charter Communications, one of the largest Internet providers in the US. The company was sued last year by several major music companies, including Capitol Records, Warner Bros, and Sony Music, which argued that the ISP is liable for pirating subscribers.
Charter Countersues Over ‘False’ DMCA Notices
In March, Charter replied to the record labels’ complaint. In addition to denying many of the allegations, the ISP also went on the offensive. Charter submitted a counterclaim accusing the labels of sending inaccurate, false, deceptive, or even fraudulent DMCA takedown notices.
The claims come after the music companies removed 272 sound recordings and 183 music compositions from their initial complaint. These were dropped after the record labels were ordered to produce further evidence that they indeed owned the rights.
Charter saw this as evidence that the companies, helped by the RIAA, have sent many inaccurate takedown notices in the past. These notices reportedly caused damage to the ISP, which said it incurred costs and reputational damage by forwarding the “false accusations.”
“Charter is injured when it processes inaccurate notices, causing it to forward false accusations to its subscribers, to the extent this creates tension with the impacted subscribers, negatively affects goodwill, and causes reputational harm to Charter,” the counterclaim reads.
The music companies were not impressed by this characterization. They countered the accusations by arguing that they were not knowingly aware of any mistakes or errors. In addition, they said there is no evidence that Charter customers were harmed as no customers were disconnected by the ISP.
Judge Sides With Music Companies
After hearing the arguments from both sides, US District Court Judge R. Brooke Jackson ruled on the matter last week. In a ten-page order, he clearly sides with the music companies.
The Judge ruled that, even if the RIAA and record labels didn’t have a valid complaint for the 455 works, there is no evidence that they knowingly made these wrong claims.
“Even if I assume, as does Charter, that plaintiffs dropped the 455 works because they did not have a valid infringement claim as to them, Charter has not alleged facts plausibly showing that plaintiffs knowingly or materially misrepresented its infringement claims in the original complaint,” Judge Jackson writes.
Charter argued that the music companies had or should have had knowledge of their inaccurate claims but that is not enough. Also, additional evidence concerning the inaccuracies of the RIAA’s anti-piracy partner Marmonitor and the problems with flawed takedown notices, in general, does not suffice.
“The several paragraphs discussing the 2016 Urban Study and the invalid infringement claims allegedly submitted by plaintiffs’ agent MarkMonitor, say nothing about the 455 dropped works.”
While errors are never good, the contested claims are only a small fraction of the total number of DMCA notices. That is not “material,” the court notes. Also, Judge Jackson believes it’s “ironic” that the ISP is complaining that the number of copyright claims, for which it can be held liable, has been reduced.
Finally, Charter’s DMCA abuse claim also fails because the court doesn’t believe that the company or its subscribers suffered any damage as a result of the allegedly inaccurate notices.
“It appears to be undisputed in this lawsuit that although Charter has notified some of its subscribers of some of plaintiffs’ claims of infringement, it has not cancelled any subscriptions or taken other actions to disable subscribers’ access to Charter’s service,” the order reads.
Consumer Protection Claim Fails Too
Based on these and other arguments the court dismisses Charter’s DMCA abuse counterclaim. The ISP also alleged that the ‘false’ notices violated the Colorado Consumer Protection Act. This claim was dismissed on similar grounds.
“[T]he premise that plaintiffs’ dropping the 455 works constituted bad faith conduct that was ‘fraudulent, reckless, willful, knowing, and/or intentional’ does not come close to satisfying the particularity required for allegations of fraud,” Judge Jackson writes.
The dismissal of both counterclaims is a major setback for Charter and a big win for the music companies, who face similar ‘false’ DMCA allegations from other companies.
The lawsuit between the ISP and the record labels is far from over, however. In his order Judge Jackson allows Charter to amend two other counterclaims. These ask for a declaratory judgment that the ISP isn’t liable for contributory and vicarious copyright infringement due to subscribers’ pirating activities.
A copy of Judge R. Brooke Jackson’s order is available here (pdf)
Many thanks to TorrentFreak for the breaking news.