The music labels are still suing the internet companies. That's a warning for the AI industry.

• Big AI companies like Open AI face lawsuits from content owners such as The New York Times.
• Cox Communications won an appeal to overturn a $1 billion verdict for failing to curb piracy.
• The current legal battles over intellectual property and generative AI could last decades.

The AI boom has been accompanied by AI lawsuits filed by content owners like The New York Times against big AI companies like Open AI. Which has led a lot of people to think about the parallels between the current moment and the Napster era, when digital disruption ran smack into the court system.

So, if you’re thinking about that kind of thing right now, here’s a story to chew on, via Reuters:

Feb 20 - 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 Music Entertainment, Warner Music Group and Universal Music Group.

The ins and outs of the case are pretty interesting: A jury has already found Cox guilty of letting people use its broadband to steal songs, and right now, the dispute is over how much Cox will have to pay the labels in compensation. 

But the crazy thing here is the timeline. This ruling came down this week — on Monday, Feb 20, 2024, and stems from a 2019 verdict about a case originally filed in 2018. 

That is: This is a present-tense case about digital piracy — something the tech and media companies spent a lot of time debating back in the 2000s and the early 2010s. That was when we had lawsuits like Metallica vs Napster, or MGM vs Grokster, or Arista vs. Lime Group. And when Congress proposed laws like PIPA and SOPA, and when music labels and Hollywood studios were trying to get broadband companies to help them stop illegal downloads.

And I thought most of that was basically settled at this point. The content companies won their suits against “file-sharing” companies like Napster and its successors, but anti-piracy laws never moved forward, and we had an equilibrium: In the US, you couldn’t legally make money running a business dedicated to avoiding copyright rules. But you also couldn’t get in trouble for simply providing internet access to people who used that access to steal things.

Turns out, things are not so settled, and the music labels are still arguing — successfully, apparently, — that broadband companies can be held liable for bad behavior enabled by their broadband.

All of which is a reminder that the current legal fights about intellectual property and generative AI could last a very, very long time.

What that means is another question: Will the overhang of liability prevent the OpenAIs of the world from moving as fast as they’d like?

Or is it a signal to move fast, break things, and not worry about a legal reckoning that could come decades from now — i.e., when entire industries will already have been reshaped?