Cox Communications, one of the largest ISPs in the United States, is refusing to hand over financial details in a prominent piracy case. The provider is being sued by two music publishers for allegedly failing to disconnect 200,000 repeat copyright infringers. The rightsholders are requesting detailed financial information to show that the company profits from its inaction.

Every month copyright holders and anti-piracy groups send hundreds of thousands of takedown notices to Internet providers.

These notifications are often forwarded to individual account holders, to alert them that their connection is being used to share copyrighted works without permission.

Cox Communications is one of the ISPs that forwards these notices. The ISP also implemented a strict set of rules of its own accord to ensure that its customers understand the severity of the allegations.

According to some copyright holders, however, Cox’s efforts are falling short. Last December BMG Rights Management and Round Hill Music sued the ISP because it fails to terminate the accounts of repeat infringers.

The companies, which control the publishing rights to songs by Katy Perry, The Beatles and David Bowie among others, claim that Cox has given up its DMCA safe harbor protections due to this inaction.

The case is a critical test for the repeat infringer clause of the DMCA and the safe harbor protections ISPs enjoy. In recent weeks both parties have started the discovery process to gather as many details as they can for the upcoming trial.

Cox, for example, is looking into the ownership of the 1,000 works for which they received seven million DMCA takedown notices. In addition, the ISP also wants an expert opinion on the source code of the Rightscorp’s crawler that was used to spot the alleged infringements.

For their part, BMG Rights Management and Round Hill Music have asked for details on Cox’s policy towards repeat copyright infringers and extensive details on the company’s financials. The ISP believes the latter request is too broad and as a result is refusing to produce the requested documents.

In a response the music companies have filed a motion asking the federal court to force the ISP to comply (pdf). Among other things, they argue that the financial details are needed to calculate damages and show that Cox has a financial motive to keep persistent pirates on board.

“The financial information that Cox refused to produce is directly relevant to Cox’s strong motivation for ignoring rampant infringement on its network because ignoring this infringement results in a financial benefit to Cox,” they argue.

“Moreover, Cox’s financial motivation for refusing to take meaningful actions against its repeat infringing customers is important to both the knowledge element of contributory infringement and the financial benefit element of vicarious liability,” the music groups add.

In its response Cox states that the rightsholders’ demands are too broad (pdf) since the documents requested include those related to the ISP’s market share, capital expenditures, profits per customer for each service, and so forth. According to Cox most of the information is irrelevant to this case.

“Plaintiffs’ document requests seek virtually every financial record that Cox maintains about its internet Customers and its provision of internet services,” Cox notes.

The ISP says it’s willing to share some financial detail but with a far more limited scope than demanded by the rightsholders.

“To be clear, Cox has been and remains willing to produce high-level, aggregate financial data of the kind that courts permit in cases involving statutory copyright damages, for example corporate tax returns. But Plaintiffs have never offered to entertain even minor limitations to the scope of their discovery requests, making any compromise effectively impossible,” the ISP notes.

The court has yet to decide how many of its financial secrets Cox must reveal but judging from the demands being made from both sides, it’s clear that we can expect more fireworks during the months to come.