RCN, a large Internet service provider, and a number of major record labels are in the midst of negotiating a settlement to their high-stakes piracy liability litigation.

A mediator was appointed last week to help the big record companies and internet service provider RCN resolve their pirate liability issue. Arista Records, Sony Music Entertainment, Universal Music, and Warner Records, together with other big labels in the music industry, filed a lawsuit against RCN four years ago.

In their complaint, the record labels claimed that RCN had not done enough as an ISP to prevent its customers from engaging in illegal file sharing. According to the labels, the corporation ignored repeat offenders rather than suspend or delete their accounts.

RCN’s initial response was a counterattack; the company claimed that the RIAA and its anti-piracy partners had sent “false and fraudulent” DMCA complaints and that these notices should not be used as grounds for disconnection.

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However, a federal judge in New Jersey ruled against RCN in two separate cases after it failed to demonstrate financial harm from incorrect or incomplete DMCA notices. The case brought by the record companies so went on.

Both sides are looking at ways to resolve these liability lawsuits out of court to avoid a high-profile trial, despite the high stakes involved (RCN could be sued for hundreds of millions of dollars in damages, and tens of thousands of internet subscribers might have their service cut off).

There has been recent direct communication between the Parties regarding the prospect of settlement, but no settlement discussions are currently taking place. Last Monday, the two sides wrote to the court saying, “The Parties are open to discussing potential settlement avenues with the Court.”

A mediator has been appointed by U.S. District Judge Robert Hirsch, who ordered this week that “Counsel and the parties (including individuals with settlement authority) shall attend mediation sessions as requested by the Mediator.”

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The provider is also involved in a similar litigation with multiple movie studios, in which a new law firm and more evidence sources have joined the fray, so a settlement in this lawsuit will not solve RCN’s piracy-related difficulties.


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