Executive Director Brandon Butler Provides Details & Takeaways from the Ruling 

The Supreme Court’s 9-0 decision in Cox Communications, Inc. v. Sony Music Entertainment is not only good law, but it’s also good policy. Cox sets clear and reasonable rules for contributory copyright liability (when a party is liable for another party’s infringement outside of employment or a similar special relationship). The ruling follows naturally from Supreme Court precedent and will enable creativity, innovation, and free expression on and off the internet. This briefing breaks down the case background, the ruling, and the key takeaways for technologists and policymakers.

The Case

Sony Music Entertainment and other major music copyright owners sued Cox Communications, an Internet service provider (ISP), alleging secondary copyright liability for the infringing activities of its subscribers. Sony contended that Cox was contributorily liable because it continued to provide Internet access to subscribers whose IP addresses were repeatedly associated with copyright infringement notices. A jury found Cox liable, awarding $1 billion in statutory damages, and while the Fourth Circuit reversed some of the jury’s findings, it affirmed the contributory liability judgment based on Cox’s knowledge of the infringement. The Supreme Court granted cert to review the scope of contributory liability.

The Ruling

The Supreme Court’s rule is clear and concise, with three main parts. First, rejecting Cox’s push to punish mere knowledge of user infringement, the Court makes clear that contributory liability requires intent to facilitate infringing uses: 

“The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement.” (slip op. at 7) 

Second, intent can be shown in just two ways:

“The intent required for contributory liability can be shown only if [1] the party induced the infringement or [2] the provided service is tailored to that infringement.” (Id.) 

Third, inducement and tailoring are defined: 

“A provider induces infringement if it actively encourages infringement through specific acts,” and, 

“A service is tailored to infringement if it is ‘not capable of ‘substantial’ or ‘commercially significant’ noninfringing uses.’”  

Each form of contributory infringement is grounded in Supreme Court precedent: inducement liability comes from MGM v. Grokster (the 2005 case about file sharing), and ‘tailoring’ liability from Sony v. Universal (the 1984 ruling about the VCR). The court reaches further back, though, to note that the 1911 case of Kalem Co. v. Harper Brothers also held that “‘mere indifferent supposition or knowledge on the part of the seller’ that the buyer will use the product unlawfully is ‘not enough’ to make the seller liable for the buyer’s conduct.” Cox slip op. at 8.

The Takeaways

Freedom to innovate. The people and companies who build technology products and services, from internet connectivity to artificial intelligence, need clear rules of the road to continue driving American innovation forward. Before Cox, they faced unpredictable and potentially ruinous liability—a $1billion verdict in this case. The Cox opinion gives technologists clear guidance and protection: if you have no intention to infringe, you are free to invent. 

Liability where it belongs. Cox puts liability for copyright infringement where it belongs: on the infringer, not lawful, neutral service providers. Copying is how digital technology and the internet work; no digital or internet company can be sure every use by every customer will be non-infringing. Justice Thomas ruled, “This Court has repeatedly made clear that mere knowledge that a service will be used to infringe is insufficient to establish the required intent to infringe.” 

Freedom to create and communicate. Cox helps protect the public from surveillance and censorship. If technology providers were liable for merely foreseeable infringement by their users, they would have strong incentives to monitor and control their users. Every creative tool, every communication technology would have to use expensive filters and other mechanisms to try to block potential infringement. Only the biggest companies could afford this compliance cost, and the public would suffer doubly: they would have fewer providers to choose from, and their remaining options would be throttled and surveilled. 

Meaningful safe harbors. The safe harbors provided by § 512 of the DMCA continue to provide meaningful protections for internet service providers. Compliance with the DMCA shields an ISP from direct as well as secondary liability, and can preempt potentially costly discovery on factual questions about inducement or tailoring. As such, the DMCA can further deter bad faith “trolling” lawsuits that seek to extract settlements by threatening costly litigation and high statutory damages.Enforceable rights. Cox leaves copyright holders with meaningful, enforceable rights against direct infringers, vicarious infringers (those who benefit from the infringement of employees or others they supervise or control), and those who intentionally contribute to infringement. What rightsholders cannot do is conscript others to enforce rights on their behalf or sue innocent parties because it’s easier than suing guilty ones.