Filmmakers and ISP WOW! Settle Piracy Liability Lawsuit Before Trial

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The long-running piracy liability lawsuit between filmmakers and internet provider WOW! has ended with a quiet settlement. In late March, a Colorado federal court refused to resolve the ISP's safe harbor defense on summary judgment. Instead of going to trial, both sides walked away. The settlement follows the Supreme Court's Cox decision, which had reshaped secondary liability earlier this year.

In 2021, a group of film production companies including Millennium Media and Voltage Pictures sued internet provider WOW! at a federal court in Colorado, accusing it of turning a blind eye on piracy.

The stakes in this legal battle were incredibly high. After filing their original complaint, the plaintiffs recently expanded their claims to cover roughly 375 films, meaning potential statutory damages could be as high as $56 million.

WOW! previously tried to have the case dismissed, but a federal judge in Colorado rejected that attempt last year. After that, the case moved forward with both sides submitting cross-motions for summary judgment, hoping to get the matter resolved before trial.

DMCA Safe Harbor

The summary judgment requests focused on a single but important question: whether WOW! is protected by the safe harbor provisions of the Digital Millennium Copyright Act.

Under Section 512 of the DMCA, an internet provider can avoid liability for pirating subscribers if it has adopted and reasonably implemented a policy to terminate repeat infringers in appropriate circumstances. This safe harbor is an affirmative defense, which means WOW! must show that it qualifies for this protection.

WOW! argued that it did, pointing to its documented policies and procedures for handling copyright complaints. However, the film companies argued the opposite, claiming WOW! failed to enforce its policy in any meaningful way and did not terminate subscribers who were repeatedly flagged for piracy.

Summary Judgment Denied

In March, Judge Daniel D. Domenico ruled on the competing motions. After reviewing the evidence in the light most favorable to each side in turn, he declined to rule for either party, finding that neither was entitled to win as a matter of law.

“I cannot say that WideOpenWest is entitled to the DMCA safe harbor as a matter of law. Nor can I say, construing the evidence in the light most favorable to WideOpenWest, that the plaintiffs are entitled to judgment as a matter of law that it is not. A reasonable juror could find for either side on a number of material fact issues,” Judge Domenico wrote.

This order was initially shielded from public view, but it was published a few days ago, after both parties informed the court that their legal battle was over.

Settlement Instead of a Verdict

Instead of going to trial, the parties filed a joint stipulation of dismissal, and the court terminated the case on May 28.

The dismissal is with prejudice, which means that the film companies can’t bring these claims against WOW! again. Each side agreed to pay for its own costs and attorneys’ fees. There is no mention of a settlement payment by either side.

Dismissal

Denying summary judgment left the safe harbor question unanswered. However, in light of the Supreme Court’s Cox decision earlier this year, that question matters less than it might seem. Cox had already lost its own safe harbor years earlier, but still won at the Supreme Court on the liability standard itself.

This means that even if WOW! would have ultimately lost its safe harbor, the film companies would still be required, under the new Cox precedent, to show that the Internet provider intended its service to be used for copyright infringement. This intent can be shown in only two ways: the ISP actively induced infringement, or the service it offers has no substantial lawful uses.

The new liability rules have significantly changed the legal playing field for copyright infringement cases and several lawsuits have been settled or voluntarily dismissed after the Cox ruling came out in March.

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A copy of the stipulation of dismissal is available here (pdf). Judge Domenico’s order on the motions for summary judgment can be found here (pdf).