Cox Appeals Billion Dollar Piracy Verdict Over ‘Concealed Evidence’

Late 2019, Internet provider Cox Communications lost its legal battle against a group of major record labels, including Sony and Universal.

Following a two-week trial, a Virginia jury held Cox liable for its pirating subscribers. The ISP failed to disconnect repeat infringers and was ordered to pay $1 billion in damages.

Cox challenged the verdict through several routes and, earlier this year, booked a partial victory. The Fourth Circuit Court of Appeals confirmed that the ISP was contributorily liable for pirating subscribers, but reversed the vicarious copyright infringement finding. A new trial will determine the appropriate damages amount given these new conclusions.

Meanwhile, Cox has another angle to work at. This week, the company filed its opening brief, appealing the District Court’s denial of its relief from judgement (Rule 60[b]) motion, as well as the court’s conclusion that Cox’s defense wasn’t hampered by the music companies ‘concealment’ of evidence.

Rehashed Infringements?

The alleged misconduct refers to evidence that, according to Cox, was held back intentionally. Specifically, it relates to the piracy tracking system, operated by MarkMonitor, which formed the basis for the lawsuit through hundreds of thousands of copyright infringement notices.

MarkMonitor was hired by the music labels to track the pirated files being shared by Cox subscribers through BitTorrent. To confirm that these files were indeed pirated, they were downloaded and verified using Audible Magic’s fingerprinting technology.

Evidence pertaining to these allegedly pirated files was central to proving direct copyright infringement. During the Cox trial, the music companies presented a hard drive that contained the files, suggesting that those were the original songs that were pirated between 2012 and 2014.

However, based on information that surfaced in the music companies’ lawsuits against Internet providers Charter and Bright House, Cox later learned that this evidence was recreated at a later date, using hash values supplied by record labels.

Cox brought this up at the district court in 2022 and submitted a motion for relief from judgment, requesting a do-over. However, the court denied the request which led to the current appeal after a two-year pause.

Cox Appeals Over ‘Concealed’ Evidence

In its opening motion before the Fourth Circuit Court of Appeals, Cox stresses that the MarkMonitor evidence is of key importance. Any concerns should not be brushed away or hidden.

“Needless to say, the reliability of MarkMonitor’s system was all important, and Cox had every interest in attacking it. But Cox was deprived of the opportunity to scrutinize MarkMonitor’s system fully, something it would learn only after judgment was entered.”

“The truth came out when district courts in cases Plaintiffs brought against other ISPs forced Plaintiffs to turn over evidence Plaintiffs had deliberately concealed from Cox,” the ISP adds.

The district court previously acknowledged that some evidence was not disclosed by MarkMonitor at the time. However, the court believes that the ‘recreated’ evidence doesn’t change anything materially.

According to the court, it doesn’t matter whether the infringing files were verified before or after the fact. The verification process is based on file hashes, which don’t change over time.

Smoking ‘Hashes’ Gun?

Cox clearly believes that something is not right, however, and points to information showing that, while recreating evidence, MarkMonitor allegedly failed to find new music files for some of the provided hash values.

These unconfirmed hashes were discovered in the record labels’ lawsuit against Charter, which first uncovered the recreated evidence. This could have turned the case upside down, but the lawsuit was settled before trial.

“And lo and behold, the Charter evidence ultimately revealed that the 2016 project failed to confirm some of the original entries in the MarkMonitor database,” Cox notes.

“With this laid bare, Plaintiffs in Charter were forced to develop an entirely new approach to proving the system’s reliability and, thus, direct infringement; they hired a gaggle of new experts, then settled before trial could test this new method.”

Cox argues that the unseen evidence would have squarely undermined the reliability of the MarkMonitor notice system and the entire direct copyright infringement claim by extension.

And there’s more. In the record labels’ lawsuit against another ISP, Bright House, the music companies admitted that they failed to disclose key aspects of MarkMonitor’s source code.

It’s unclear what was held back but, since that lawsuit was settled at the eleventh hour, Cox believes that it could be quite important.

“Cox still does not know precisely what this code does. But public documents from Charter and Bright House indicate that the code governs, at least, the process by which MarkMonitor supposedly verified that files it found on peer-to-peer networks matched copyrighted works,” the ISP informs the court.

“The district court in Bright House was determined to get to the bottom of this. It summoned MarkMonitor’s corporate representative to appear in court and explicitly commanded that ‘Plaintiffs’ counsel SHALL NOT coach [him] in advance.’ Plaintiffs settled the day before that appearance.”

All in all, Cox believes that a new trial is warranted, so the evidence can be tested and scrutinized properly. Reopening the case makes more sense now, it argues, as the earlier appeal also reopened several key questions.

“This Court should therefore reverse the denial of Cox’s Rule 60 motions or, at a minimum, vacate the district court’s decision and direct the court to permit Cox its requested discovery, followed by appropriate motion practice. The fairness and integrity of any result in this case depends on it,” Cox concludes.

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A copy of Cox’s ‘page proof’ opening brief, submitted at the Fourth Circuit Court of Appeals, is available here (pdf)

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