By Blake Brittain
(Reuters) -Cox Communications, the cable television and internet service provider, convinced a U.S. appeals court to throw out a $1 billion jury verdict in favor of several major record labels that had accused it of failing to curb user piracy, setting the stage for a new trial on the matter.
The 4th U.S. Circuit Court of Appeals in Richmond, Virginia, ruled on Tuesday that the amount of damages was not justified and that a federal district court should hold a new trial to determine the appropriate amount.
A Virginia jury in 2019 found Cox, the largest unit of privately-owned Cox Enterprises, liable for its customers' violations of over 10,000 copyrights belonging to labels including Sony (NYSE:SONY) Music Entertainment, Warner Music Group and Universal Music Group (AS:UMG).
The labels' attorney Matt Oppenheim said that the appeals court "affirmed the jury’s verdict that Cox is a willful infringer," and that "the evidence of Cox's complete disregard for copyright law and copyright owners has not changed."
"A second jury will get to hear that same compelling evidence, and we fully expect it will render a significant verdict," Oppenheim said.
A spokesperson for Cox said that the company was pleased with the decision to set aside the verdict but disagreed with the ruling that it still infringed.
"Providing homes and businesses with the broadband service that so many depend on in their daily lives should not be a violation of copyright law," the spokesperson said.
More than 50 labels teamed up to sue Cox in 2018, in what was seen as a test of the obligations of internet service providers (ISPs) to thwart piracy.
The labels accused Cox of failing to address thousands of infringement notices, cut off access for repeat infringers, or take reasonable measures to deter pirates.
Atlanta-based Cox had told the 4th Circuit that upholding the verdict would force ISPs to boot households or businesses based on "isolated and potentially inaccurate allegations," or require intrusive oversight of customers' internet usage.
Other ISPs, including Charter Communications (NASDAQ:CHTR), Frontier Communications (OTC:FTRCQ) and Astound Broadband, formerly RCN, have also been sued by the record labels. The labels have since resolved their lawsuits against Charter and its subsidiary Bright House Networks.